A Guide to Financing Your Startup in Ethiopia

An innovative idea, a validated business model, a qualified team, and a seamless execution plan are important ingredients to launching a new business. But without the right amount of finance to fuel operations, a great idea will just be that – a great idea.

Acquiring finance is one of the most important tasks in a startup’s journey. There are multiple sources to finance a startup like founders’ savings, friends & families, loans from financial institutions, angel investors, and venture capital firms. In addition, startups can raise investment from startup support programs like incubation-acceleration firms and grants or competitions.

Shega’s ongoing research on the Ethiopian startup investment landscape indicates that more than 40 startups have raised funding in 2021 so far. This is already is higher than last year’s total number of funding and proof of the country’s growing startup ecosystem. However many startups still face challenges finding investors for their business.

In this piece, we take a look at various sources that can fund your startup in Ethiopia.

Angel Investors

Angels are individuals that invest money in early-stage startups. Angels are called angels because of the high-risk pre-seed or seed investments they make. These individuals usually invest in return for equity ownership.

Angel Investors have been an active source of finance for Ethiopian startups. Many startups like Deliver Addis and Ride were backed by Angels at their early stage. You may run into Ethiopian Angels on startup and innovation summits, networking events, and even LinkedIn, so make sure you are always pitch ready.

Angel Networks

An angel network is a collection of individual angel investors who comes together to invest in startups collectively or individually. Angel networks or angel groups help individual angel investors find promising startups easily. In addition, angels also get helpful insight from fellow angels in the network to make better investment decisions.

Below is a list of angel networks that are active in Ethiopia.

Addis Ababa Angels (AAA)

AAA is Ethiopia’s first angel network established by local investors. Local angels Shem Asfaw, Henok Assefa, Addis Alemayehou, Adam Abate, Yosef Kibur, Amaha Bekele and Levi Girma are the 6 members of the AAA.

The network focuses on early-stage startups that are both pre & post-revenue. It invests in scalable, tech and tech-enabled businesses. The angels highly encourage a startup to be composed of more than 2 people and team members to have complementary skills.

The AAA has made two official investments since its establishment in 2019. The network has invested in Across Express in 2020 and Eshi Express in June of 2021.

RENEW – Impact Angel Network

RENEW is an Investment adviser that operates teams in Ethiopia and other East African countries. RENEW primarily invests in Small and Medium Enterprises (SMEs) but have previously backed a tech startup in Ethiopia.

RENEW manages an angel network called Impact Angel Network (IAN). RENEW IAN has invested in Deliver Addis in three rounds since 2017. RENEW IAN also invests in SME’s with social impact and has invested in dozens of Ethiopian companies including East African Emergency Services (Tebita) and dVentus Technologies.

Investment, Holding and Venture Capital Firms

Betam Group Holdings

Betam is a family-owned investment and holdings company. It invests in early-stage African startups. Betam has previously invested in Orbit Health, an Ethiopian health-tech startup, and ZayRide a ride-hailing service provider based in Ethiopia.

Kazana Group

Kazana Group is a privately owned holding company. The group is owned by Addis Alemayhou CEO of 251 Communications and also a member of the AAA.

Kazana holds a portfolio of 13 companies. Avetol, Sira App, Jemla App, and Bana Music are some of the companies under Kazana.

The Baobab Network

The Baobab Network is a tech-accelerator that backs early-stage technology start-ups in Africa. The network provides startups with $25,000 seed funding. In addition, it offers a tailor-made accelerator program and gives startups access to a network of partners and investors.

Baobab has invested in two Ethiopian startups, Be Blocky in 2019. Following that it invested in a construction technologies company ConDigital in 2020.

Novastar Ventures

Novastar Ventures is a venture fund manager that allocates funds to support innovative and disruptive businesses in East & West Africa. It manages more than $200M across two venture funds.

When investing Novastar looks for innovative business models, a strategy that balances profit & social impact, and quality of founders. Novastar Ventures has previously invested in GreenPath, an Ethiopian Innovative Agriculture firm.

Startup Support Programs


iceaddis is a startup support organization that was established in 2011. iceaddis runs an incubation program, acceleration program, and consulting service to support Ethiopian startups.

iceaddis focuses on high potential, high-impact tech, and tech-enabled companies. iceaddis takes 10% equity from the startups in its incubation programs.

iceaddis’s acceleration program Bloom has invested in 2 startups. The hub plans to grow into a startup accelerator fund in the coming years.

xHub Addis

xHub Addis is a social business incubator and co-working space initiated by Center for African Leadership Studies(CALs) in 2014. It supports innovative, affordable, and scalable solutions.

Since its establishment xHub has run multiple incubation programs in partnership with various organizations such as; The British Council, The Mastercard Foundation, and Jobs Creation Commission. xHub takes 7% equity from all startups in its programs.

In 2021 through the Mastercard funded incubation program xHub awarded 3000$ each for 20 startups. It is also running a digital incubation program ‘AHUN‘ targeting technology startups and awards $ 5000 upon completion.


blueMoon is an Agri-Tech focused startup incubator established in 2017. In the past years blueMoon has incubated 87 startups and supported over 300 entrepreneurs.

blueMoon runs its incubator program twice a year, with a winter/summer batch system.

It has invested close to $ 70,000 in blueMoon incubated startups. In exchange for the investment blueMoon takes 10% equity from the companies.

In addition to providing seed investment to its startups, blueMoon has a startup-investor matchmaking platform called Lions Den. Lions Den is a nationally televised program where blueMoon incubated startups pitch their businesses to Lions (Potential investors) in search of funding and strategic partnerships.

Reach for Change

Reach for Change (RFC) is an international non-profit founded in Sweden. RFC Ethiopia was founded in 2015. The company works to enable high potential social ventures scale-up. It does this through capacity-building programs, network connections, and funding.

Since 2015 RFC has supported 219 enterprises and invested close to $ 800,000 on the enterprises in its programs.

Orbit Innovation Hub(OIH)

Orbit Innovation Hub is a new addition to the Ethiopian startup support ecosystem. It is an initiative by the founders of Orbit Health in partnership with The Mastercard Foundation. Orbit Health is a digital health platform.

The hub provides an incubation, acceleration and capacity building programs to help tech-startups develop and accelerate their business ideas. OIH is inclined to supporting health-tech startups. OIH provides coaching, mentorship, industry linkage and seed funding to the startups in its programs.

Competitions and Grants

Innovation competitions and challenges have also been a major source of funding for Ethiopian startups. Such competitions are held at a national, continental and even international level to promote innovation and technology.

These competitions call innovators and startup founders to compete against other innovative businesses. Winners will be selected based on specific merits such as a valid business model, scalability, economic feasibility and innovativeness of their business. Some programs focus on specific areas such as green-tech, health-tech and fin-tech while others target multiple sectors.

In the past years, Ethiopian startups have participated in competition such as Chigign Tobiya, Africa Innovation Week, Africa Fintech Summit, Startup Ethiopia, Startupper of the year by Total, iCog Lab’s SolveIt, Seedstars World Competition, Entrepreneurship World Cup, and Green Innovation Agritech Slam to win grants.

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