From Seed to Scale: How Seedstars is Cultivating the Next Generation of Entrepreneurs in Emerging Markets

Seedstars is on a mission to impact people's lives in emerging markets by supporting entrepreneurs with knowledge, community, and capital. Established in 2013, the organization has become a global leader in nurturing entrepreneurial ecosystems in these regions. It offers tailored interventions and financing solutions for small and growing businesses, partners with emerging venture capital funds, and co-invests in portfolio companies. Seedstars' operations span across Seedstars Programs, Development Sector Services, Seedstars Advisory, Seedstars Talents (Academies), and Seedstars Capital (Funds), emphasizing its role in driving entrepreneurship and innovation. With that, why don’t you join me in learning more about Seedstars with its Managing Director of Seedstars Programs, Harry Federspiel.

Could you give us a brief background about yourself and your career thus far?

My career in entrepreneurship and innovation began over a decade ago, initially engaging with early-stage startups and deepening my expertise in management strategy through studies in Vienna and Shanghai. Post-graduation, I co-established an innovation consulting firm, helping organizations establish entrepreneurship programs. Joining Seedstars over 3 years ago, I've led efforts to enhance our impact measurement and intervention quality, doubling business outcomes across emerging markets. We've successfully executed over 100 programs, significantly boosting revenue, financing, and job creation for the enterprises involved.

How did you first get involved with Seedstars? What is it all about and what makes it unique from other venture builders?

Reflecting on my journey to Seedstars, it was the organization's mission to significantly impact emerging markets that resonated deeply with me. Seedstars stands out not just for its investment in startups but for creating a vibrant ecosystem where entrepreneurs are equipped with the knowledge, network, and capital to tackle global challenges. Our goal is ambitious: catalyze $1 billion in impact funding by 2030. But through cultivating a culture of entrepreneurship within the organization, we’re all collectively able to work together towards making our goal a reality.

What sets Seedstars apart is our comprehensive approach. Beyond merely providing funding, we foster a community deeply committed to addressing pressing global challenges. Through our programs, startups flourish, becoming agents of change within their communities and driving both job creation and economic development. This integration of purpose, impactful action, and a supportive community defines Seedstars' unique position in the venture-building space.

How does Seedstars approach investing and managing programs in different emerging and frontier markets?

At Seedstars, our approach to investing and running programs is deeply holistic, aiming to create a positive impact across multiple dimensions. We address Sustainable Development Goals (SDGs) through targeted programs, provide capital to promising entrepreneurs via Seedstars Capital, and tackle the critical issue of human capital through the Seedstars Academy. This multifaceted strategy ensures we're not just supporting startups financially but are also fostering sustainable ecosystems that contribute to both social and economic development.

In the past decade, this approach has translated into running over 100 programs across 97 countries, directly impacting over 5,500 entrepreneurs. Through Seedstars Capital, with around $100m across various funds and additional commitments, we've deployed capital across 35+ countries, supporting over 100 companies and driving significant follow-on financing, while the Seedstars Academy cultivates the next generation of talent. By integrating these efforts, Seedstars stands at the forefront of empowering entrepreneurs and communities in the Global South, making a tangible difference in the world's emerging markets.

Does the team tailor their strategies to specific regions or sectors?

Our strategy is meticulously tailored to the unique needs of each region and sector we operate in, spanning Sub-Saharan Africa, Middle East and North Africa, Latin America, and Asia-Pacific. Our Entrepreneur Support Solutions are designed with a sharp focus on addressing specific SDGs, such as Climate Action, Gender Equality, Decent Work, Economic Growth, and Quality Education. This targeted approach ensures that we're not only fostering entrepreneurship but also contributing to the broader agenda of sustainable development.

On the investment front, our aim is to identify and support businesses that offer innovative solutions capable of spurring economic growth, creating jobs, and enhancing the quality of life for people in their communities. By aligning our capital and resources with ventures that have a meaningful impact, we strive to drive positive change and foster vibrant, sustainable economies across these diverse regions.

What are some of the biggest challenges startups face in these markets, and how can Seedstars help them overcome them?

Startups in emerging markets face a diverse set of challenges, from accessing capital to navigating complex regulatory environments. Recognizing this, Seedstars doesn't offer one-size-fits-all solutions. Instead, we craft our programs to meet the unique needs of each startup, assembling cohorts that enable effective peer learning and mentorship. Our approach is hands-on and grounded in real-world challenges, with a strong emphasis on experimentation as a learning tool.

We understand that venture capital might not suit every startup, so we explore a variety of financing solutions tailored to the specific needs of each venture. This includes innovative models like social impact incentives and mezzanine financing to ensure that startups not only survive but thrive. Our programs are designed to foster meaningful connections, providing entrepreneurs with access to mentors, peers, and potential investors who can help refine their business models and strategies. This bespoke support system is pivotal in helping startups overcome the multifaceted hurdles they face in emerging markets.

Can you share a story about a particularly impactful startup or entrepreneur you've encountered through Seedstars? How did Seedstars people support its growth and impact?

Sure, one example is MamaMoni and its founder  Nkem Okocha. She was taking part in our Women Entrepreneurship for Africa Acceleration and Growth Program (WE4A). The problem she is trying to solve with her team is that 40% of women in Nigeria are financially excluded, and unable to access essential financial services. The rate is even higher among impoverished women in rural and urban slum communities, who often lack collateral or credit history. Such financial barriers severely impact their ability to start or sustain small businesses, perpetuating cycles of poverty, reduced household income, increased domestic violence, and limited education opportunities for their children.

Her solution is providing micro-business loans to underserved women in rural and urban areas of Nigeria, bypassing restrictions of the formal credit system. Alongside these fast, straightforward loans, the program offers digital skills financial literacy, and business training via their Shesabi app, and offline training for those without smartphones. As a result of the WE4A program we did, MamaMoni launched a female-only agent network, creating employment for 350 women across Nigeria. They have also received three awards and secured €250,000 in grant funding from the Netherlands Government to scale their Agent Network.

The program is also in the process of obtaining a super agent license from the Central Bank of Nigeria. In just four months the agent network MamaMoni built processed transactions worth $2,173,000. This initiative employed previously unemployed women and will be expanded to include 2,000 female agents using the grant funding.

One more example showing the impact of our work In Asia can be seen in the success of MyRobin, an Indonesian startup aimed at transforming the blue-collar job market. Addressing the plight of 50 million blue-collar workers, often marginalized in formal employment, MyRobin's platform connects these workers with corporations, ensuring formal employment opportunities and access to benefits. Through Seedstars' investment and the Growth Track program, we've helped MyRobin refine its growth strategies and expand its reach. This collaboration led to MyRobin's strategic partnership with BetterPlace, marking a major step in its mission to improve the livelihoods of blue-collar workers across Southeast Asia. In the first eight months of 2023 alone, workers on the MyRobin platform earned a total of USD 40M, showcasing the transformative power of targeted support and investment in driving sustainable economic growth and enhancing worker welfare.

I think the stories of both MamaMoni and MyRobin are great examples of the type of impact Seedstars aims to create across different continents, from empowering Nigerian women to access financial services and create jobs, to revolutionizing employment for blue-collar workers in Indonesia.

What are the plans Seedstars has for 2024?

In 2024, Seedstars is set on pushing boundaries and fostering innovation, as we strive to challenge the status quo and continually reinvent our approach to match the dynamism of the global landscape. Our focus is on delivering a suite of services designed to empower our clients, which include bi- and multilateral organizations, governments, and private-sector foundations. We're enhancing our impact through capacity-building services and technical assistance tailored for small and growing businesses, addressing the unique financing needs of the 'missing middle' companies with innovative and patient capital instruments beyond traditional venture capital. Additionally, we're dedicated to refining our methodologies for measuring and managing the impact of our interventions and investments, ensuring we can quantify our contributions to sustainable development effectively.

A key initiative for the coming year is the development of entrepreneurship ecosystems through our proprietary Seedstars Index, a comprehensive tool aimed at helping our clients advance their ecosystems to attract more talent, create job opportunities, and improve community livelihoods. This endeavor reflects our commitment to not just business growth but also to the broader goal of fostering thriving, self-sustaining communities. At the heart of our evolution as a business is our people—the passionate community of entrepreneurs and changemakers we work with, who inspire us to keep innovating and expanding our impact worldwide.

Harry Federspiel is the Managing Director of Seedstars Programs. Harry is responsible for leading the local team, forging strategic partnerships, securing business opportunities, and ensuring successful program execution. He is an imperative figure in allowing Seedstars to realize its mission and vision, and eventually, its success. As seen in Harry, he is very much passionate about creating change and catalyzing growth and success in the startup ecosystem.