Dar es Salaam. Tanzania’s innovation ecosystem has long been stifled by one recurring hurdle: access to capital. While government strategies and donor-backed programmes continue to nurture startups, the biggest bottleneck remains financing.
In this space, angel investing is beginning to emerge as a game-changer for Tanzanian startups, offering not just funding, but also mentorship and networks that can make the difference between failure and survival for budding innovators.
Angel investors are typically high-net-worth individuals who provide early-stage capital to startups in exchange for equity. Unlike banks, which require collateral, or venture capitalists who prefer already-scaled firms, angels take on risk at the infancy of businesses.
In Tanzania, this model is still nascent, but recent developments signal a shift. At the centre of this movement is the Serengeti Business Angels Network (SBAN), which has since 2021 been connecting local and diaspora investors with early-stage ventures.
SBAN yesterday announced fresh investments in Borderless and Ghala, two startups tackling structural challenges in Africa’s economy.
Borderless seeks to unlock diaspora capital with over 40 million Africans abroad remitting about $100 billion annually, while Ghala uses WhatsApp-powered AI to digitise the informal economy that employs nearly 90 percent of Tanzania’s workforce and contributes over 60 percent of GDP.
“Both companies tackle deep-rooted inefficiencies- from how diaspora wealth is deployed to how small businesses access digital markets and reflect the kind of transformative innovation we aim to support,” said, SBAN’s co-founder, Mr Francis Omorojie.
For startups, the benefit goes beyond cash. One of the investors at the Harambee Night that SBAN organised, Ms Esther Maina, stressed that angel investing provides skills and exposure most founders cannot otherwise afford.
“Typical startups do not have the amount of money to pay for a very experienced marketer. With angel investing, they get access to capital and very talented people to help them grow their businesses,” she explained.
The Harambee Night, attended by diplomats, corporates, and innovators, was not only about pitching. It was about building an ecosystem.
An investment manager with Launch Africa Ventures, Mr Michael Mutie, said such platforms were vital: “We need more of this for the ecosystem in Tanzania.
A space that brings together investors and founders allows us to collectively find ways to provide support.”
One of the winners, co-founder of Mrembo Naturals, Ms Moureen Mollel, said angel networks are giving manufacturers and non-tech firms a long-overdue spotlight.
“For years the focus has been on tech startups. Now, manufacturers in cosmetics like us are considered. With this kind of investments through angel investors, we can see growth because here we meet financiers and mentors,” she noted.
International investors agree. A Swedish investor with interests in Tanzania, Mr Torbjorn Jacobsson, argued that supporting small businesses should be a long-term national priority.
“Small businesses are the future for Tanzania. In Europe, they employ most people. Developing the small business environment and giving them the opportunity to grow is what will build Tanzania for the future,” he said.
The Tanzanian government has shown willingness to nurture the ecosystem. Through the National Startup Policy, unveiled in 2022, authorities pledged to provide regulatory support, incubation centres, and to ease tax and registration procedures for early-stage companies.
Institutions such as the Tanzania Commission for Science and Technology (COSTECH) and the ICT Commission have supported incubation hubs like Buni and DTBi.
Meanwhile, the SME Development Policy continues to recognise the need for financing solutions tailored to small businesses, though access to affordable credit remains a gap.
For Tanzania’s youth, who make up over 60 percent of the population, angel investing offers a route out of unemployment.
According to the National Bureau of Statistics, at least 800,000 young people enter the job market annually, yet the formal sector generates less than 100,000 new jobs per year. Startups, if scaled with proper support, could absorb some of this pressure.
The SBAN initiative also demonstrates how private sector solutions can complement government efforts. By mobilising diaspora capital through platforms like Borderless and digitising informal trade via Ghala, Tanzania is positioning itself to harness sectors long overlooked by traditional finance.
Yet the model still faces challenges. Few Tanzanians are aware of angel investing, and the risk appetite among local investors is relatively low compared to global peers.
As Maina put it, “We want to make people not run their businesses in isolation, but instead connect them with ideas, advice, and partners to grow.”
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