While the cost of building a house can be overwhelming to afford, particularly at a time when many African countries are struggling with means to cushion the effects of homelessness within their respective shores, Cofundie, a Ghanaian startup has risen to make this a thing of the past.
The significance of this humble step by Cofundie can only be appreciated understanding the current situation, that is capable of toppling over many African countries.
According to the world homelessness statistics, housing shortage is the main cause of homelessness in Africa. In Ghana, Cofundie home-base, about 39% of its urban population, accounting for roughly 5.5 million people, lives in slums, a situation that closely mirrors the realities of other African countries.
For instance, an estimated 24.4 million people are homeless in Africa’s most populous nation, Nigeria, with its consequences linked to rapid urbanisation poverty and Boko-Haram actions in recent years.
Formed in MEST, Cofundie is a Ghanaian startup connecting people to jointly build houses for sale or lease.
The startup aggregates funds from participating peers by way of crowdfunding, investing raised capital into the construction of units of proposed houses.
The startup’s vision and traction go forward to attest that the practice (otherwise called crowdfunding) of funding a project or venture by raising small amounts of money from a large number of people, typically via the internet, has continued to be well received amongst people across the globe.
More notably, crowdfunding has recorded an increasing level of participation from countries as the U.S., Canada, Singapore, and few African countries like Ghana, Egypt, Rwanda and Nigeria.
As a form of alternative finance, in 2015, alone, over US$34 billion was raised worldwide by crowdfunding.
Leveraging the channel, the Ghanaian startup has embarked on its first project, crowdfunding for a first phase of a 20-unit housing project in collaboration with Ghana’s largest urban developer, Appolonia City.
Founded less than 2 years ago, the startup was formed in August 2019 at the Meltwater Entrepreneurial School of Technology (MEST) in Accra.
Going by the vision of the organisation, the startup aims to solve Africa’s housing crisis by increasing investment in affordable housing built using cost-effective and time-saving techniques and materials such as earth bricks, rammed earth, used shipping containers and polystyrene panels.
What you should know:
- Crowdfunders share in the profits after homes are sold or rented out.
- The Startup takes five percent of all funds raised and 10 per cent of the profits from buildings funded through the platform as revenues.
- Cofundie is in the process of raising a seed round and planning to launch in Nigeria by mid-2021 as a result of demand from developers and potential investors in Nigeria.
- In addition to the project, the startup is working with one of its developers to bring 100 unit of one, two and three beds to market, built using polystyrene panels.
- These homes cost between US$21,000 and US$45,000, 20 per cent less than comparable units built using traditional materials.
- The startup is currently armed with US$100,000 in pre-seed funding from MEST to address housing deficit, and has gone ahead to create a platform for crowdsourcing funds from interested and willing-to-participate public.
With an ambition to build affordable homes, and crowdsource funds from peers, will Cofundie scale as a platform, especially bearing in mind its take-off ecosystem, Africa?
The startup, and its growing peer funding community, as well as its investors, must begin to ask questions in order to critically analyse fundamental challenges with possible chances of hampering the growth of real estate (Cofundie domain) in Africa.