The Managing Director of ARM Labs Lagos Techstars Accelerator, Oyin Solebo, has stated that investors are now placing a greater emphasis on the unit economics of startups when considering funding opportunities. This shift in focus was disclosed during an interview held in Lagos on the Demo Day of the Accelerator program.
Solebo emphasized that unit economics play a crucial role in determining a startup’s viability, encompassing various factors such as profit margins, customer acquisition costs, and customer lifetime value. This approach aims to evaluate the sustainability and scalability of a business model, highlighting the importance of building durable enterprises.
The completion of the 13-week Accelerator program by 12 startups has equipped them with essential skills to pursue further investments. Notably, there has been a noticeable trend towards debt financing over equity, with Solebo advising startups to assess their revenue streams carefully before pursuing debt funding to meet conservative repayment expectations.
The Demo Day showcased startups including 24Seven, BeautyHut, Eight Medical, GetEquity, Jump n Pass, One Plan, PBR Life Sciences, PressOne Africa, Rana Energy, Surge Africa, Swoove, and Veend, which had received pre-seed funding as part of the program’s commitment to investing $1.4 million in African startups.
The startups benefitted from mentorship sessions with industry experts, gaining valuable insights and guidance for their growth strategies. The event provided a platform for these emerging companies to pitch their ideas to potential local and international investors, furthering their journey towards success in the African tech ecosystem.
