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Zelalem Dagne calls the African Diaspora Marketplace competition “the best thing that ever happened.”
Dagne’s Global Tracking concept was one of 14 winners selected from more than 700 business plans entered into the 2010 competition offering grants to U.S.-based entrepreneurs of the African diaspora.
His company and others were awarded matching grants of $100,000 each, with the winning business entries spanning seven countries.
The United States Agency for International Development and the Western Union Company have now launched African Diaspora Marketplace II. The competition encourages sustainable economic growth and employment by supporting those with innovative and high-impact ideas for start-up and established businesses in Africa.
Before winning the grant, Dagne had already spent hundreds of thousands of dollars on his winning business concept, but the funds have helped the company in terms of moving forward with the project and outsourcing supplies, he said. Now, Global Tracking, which uses wireless technology to locate or account for various business vehicles, is looking to expand its operations to other countries.
“The timing was probably the worst time to look for any funding considering the financial time we went through,” Dagne said of the economic recession affecting the United States and other countries.
Despite the impact of the poor economy, a lack of funding for entrepreneurs seeking ventures on the continent is not a new struggle.
The second ADM initiative is now in its final round. ADM II received nearly 500 applicants. 44 finalists are invited to the African Diaspora Marketplace event to be held at George Washington University to present their venture in-person to judges and other potential funders and participate in networking events and business-development workshops. Up to 19 winners of the competition will be awarded a grant of up to $50,000 and a technical assistance package valued at $10,000-20,000. Grants focus on high priority, high-impact sectors in Africa, including agribusiness, renewable energy, and information and communication technology.
“It is still quite difficult for small companies and start-ups to get investors, especially when (the business) is to happen in a far off place like east Africa,” said Raymond Rugemalira, whose Uza Mazao also won a 2010 grant. “(ADM) helped us to launch and we’re hoping that once we get a track record, we can attract other investors because we’ve proven ourselves.”
Many times financing is most available for companies already working and turning a profit. African Diaspora Marketplace II is open to new businesses seeking to prove a new idea as an effective business plan or established businesses seeking to prove new concepts. The competition helps companies further refine their ideas and be more forward thinking.
The potential impact of ADM goes beyond participating businesses, reaching back to spur economic growth in the countries they service, Dagne said, adding that he has seen an increase in competitors since launching his business.
“It prompts others to jump on the bandwagon,” he said. “It’s a serious competition, but there is also enough market for everyone.”
“If you look at just the ADM I winners, what has been the economic impact of just that handful of companies who were the ADM I winners, as far as job creation, economic turnover… I would have to imagine it’s fairly notable,” said Alden Zecha, whose Sproxil, Inc. was a winner in 2010.
He called the ADM model a multiplier effect, with every dollar spent through the program generating multiple dollars in the African economy.
This year’s competition will lead to more ideas and greater impact as the competition continues to grow. “There’s a lot of potential. There’s a lot of motivation, but it’s not going to be easy.”
Members of the community are invited to attend the Marketplace event, to be held on June 22nd from 9:30 a.m. to 6 p.m. at George Washington University’s Marvin Center in Washington D.C. Concurrent workshops featuring business development and entrepreneurship will be open to the public free of charge. The award ceremony will be held in coordination with Western Union and USAID on June 23rd from 10:30 a.m. to 1 p.m., and requires registration. Please visit www.diasporamarketplace.org to register, for more information on the African Diaspora Marketplace, and for other valuable resources.
For more information on the competition, follow us on Twitter at @DiasporaMarket and connect on LinkedIn with the group “African Diaspora Marketplace”.