Today’s rapid pace of technological advancement, with the rise of technologies like AI, machine learning, blockchain, and IoT, has the potential to transform every aspect of our lives. And the fast-growing global startup scene is at the forefront of this change, making our lives better, faster, and more efficient.
But it’s the innovative young startups from emerging markets that have the potential to create the biggest impact. As of 2018, 85% of the world’s population lives in emerging market countries, which represent 59% of the GDP. With such a huge digital consumer market, these startups will have a major hand in shaping and growing the post-Covid economy.
Yet, funding and opportunities are still given disproportionately to startups based in established markets. In fact, prior to COVID-19, there was a finance gap of $5 trillion between small and medium-sized businesses from emerging vs established markets.
In order to solve the world’s biggest problems, we don’t need solutions that are one size fits all. We need local innovation that will help solve local challenges and spur change.
The question is, how can we shift the scales and help startups from emerging markets get the opportunities they need to thrive?
Enter Seedstars. The Swiss-based private company is on a mission to impact people’s lives in emerging markets through technology and entrepreneurship. They’ve developed a number of accelerators, growth programs, tech hubs, and investment opportunities for high-growth companies from Latin America, Africa, the Middle East, Eastern Europe, and Central and South Asia.
The annual Seedstars World Competition is the moment that brings together the top startups from across their global network together for the chance to win an investment of $500k. Started in 2013, with the help of their partners the Canton of VAUD, HEG-FR: The School Of Management Fribourg, Mada, and Presence Switzerland, Seedstars World has since become the largest startup competition in emerging markets, spanning across 90 countries. And this year they’re teaming up with TNW to bring it to an even wider audience.
We spoke with the five finalists to find out what they believe will be the most important areas to focus on when shaping the post-Covid world.
Understanding data collection
Discussions around the ethics of data collection and data privacy have been widespread across the internet. But it needs to be about more than just making sense of data; we must also ensure collection procedures match with existing technology.
Luis Santiago, CEO of Venezuela-based PEGASI believes we would have been better equipped to handle this pandemic if healthcare information wasn’t collected in, “unstructured and analogical formats.”
PEGASI makes healthcare information accessible, clear, and useful for patients, physicians, and service providers in the developing world. Their aim is to build:
For Santiago, becoming a finalist in Seedstars’ competition will help significantly. “These are typically very tough industries and regions in which to gain traction and attract the attention of investors. Having a partner that directs the spotlight in a way in which we stand the chance to create a positive change is an extremely valuable asset for us.”
Decreasing wealth inequality
Another issue that the pandemic has shined a light on? The ever-growing wealth inequality gap. While the wealthy were not heavily impacted (some even benefited), so many others struggled to meet their living expenses.
This problem is one that Uzbek startup IMAN hopes to fix: “Our vision is to use the power of technology to connect investors with borrowers at the point of sale using the principles of Islamic finance,” says CFO and founder Mark Zubov.
This way, any retail investor on the planet can grow his or her wealth in an ethical way while easing access to honest and transparent financing for consumers in frontier markets.
With IMAN’s incorporation of P2P lending, the startup is able to create investment products that manage to be both more accessible for investors and more affordable for borrowers, contributing to a more equitable financial system.
Though access to capital is always an obstacle, Zubov says, “Events like the Seedstars World Competition give opportunities to startups from anywhere in the world to pitch their projects, network with fellow entrepreneurs, and learn from mentors that are the best in what they do.”
Moving to a more digital world
If there’s one thing the past year has shown us, it’s that most services can be provided digitally. This is definitely true for the financial services industry. Unfortunately, there are plenty of institutions that were simply not prepared to go digital or only scratched the surface of a digital transformation, heavily impacting their businesses.
The financial industry doesn’t have to be this way though, which is why decentralized finance-based transactions dominated the realm and are now challenging the entire future of the industry.
Malaysia’s Finology is a startup that enables seamless access to financial products via their technology and digital distribution channels. As the financial services industry moves forward digitally, it’s important for startups like Finology to get themselves in front of the public: “Where there is attention, there are opportunities,” says co-founder Jared Lim, “and any such opportunities can be just the propellant to change the trajectory of a company for good.”
Of course, Lim believes there’s still hope for the industry:
FSIs can still remain relevant if they leverage their advantages as the incumbents while also updating their IT infrastructure and processes to be more digitally friendly.
Finology is pushing this, as it enables seamless access to financial products everywhere using end-to-end digital broking technology.
“A resilient economy is better able to support households and businesses in a crisis,” says Ladda’s Olaseinde. Unfortunately, some emerging markets lacked supportive operating environments. This is true for Nigeria, where there is a high dependence on commodity exports.
One key in building resiliency as a startup is staying sustainable. Olaseinde says Ladda tries “to keep costs under control to sustain a good cash flow position and strong buffers.”
Ladda provides cheap, convenient access to investment opportunities for retail investors in Nigeria. Founder Oluwatosin Olaseinde knows the startup struggle:
Startups in emerging markets still face huge funding gaps compared to their peers in advanced markets.
But he noted that the Seedstars World Competition, “provides direct and indirect funding opportunities,” to all competitors.
Recognizing current limitations
“This pandemic came as a wake-up call to all who use that quote, ‘E-commerce is the future,’” says Kais Khadhraoui, CEO and founder of Fulfillment Bridge. “To them, we say it was the future, but 20 years ago.”
Yes, the pandemic has led to an increase in online business, but that doesn’t mean e-commerce is perfect. The current infrastructure has some major limitations and disadvantages, especially in emerging markets like Africa and the Middle East, regions that have been slow to adapt to internet commerce.
That’s where a startup like Tunisia’s Fulfillment Bridge comes in. This cloud-based global e-commerce logistics platform offers warehousing in four continents, fulfillment, shipping, return management, and more.
Khadhraoui says the past year has helped the startup shape both its vision and mission. As they redefine e-commerce with a focus in Africa and the Middle East, Fulfillment Bridge hopes to, “build the infrastructure to promote e-commerce transactions from, to, and within the region.” As Khadhraoui says,
Everyone is in a marathon to adopt the e-commerce infrastructure. This means understanding legislation, logistics, payment, and user education for this new normal.
Eager to find out who will be this year’s Global Winner?
Register here to watch the live public broadcast on 20 May 2021 at 2 pm CEST.
Along with the Grand Finale of the pitch competition, awards will also be given to the best startups in the categories of EdTech, ICT accessibility, women empowerment, climate change, and childhood development. And don’t miss out on the expert panel discussions about how tech can transform access to education in emerging markets!