VC4Africa member Eric Mutta secures US$ 328,000 in funding for accounting tool MiniShop

Congratulations to VC4Africa member Eric Mutta: his company Problem Solved Ltd received US$ 328,000 to further develop his IT accounting package Minishop! The 29 year old entrepreneur Eric Mutta pitched Minishop at DEMO Africa 2012 after winning Apps4Africa and has now won the second round of the SME Finance Innovation Challenge Fund Competition organized by Tanzania’s Financial Sector Deepening Trust (FSDT). Minishop is an electronic record-keeping solution for SMEs, which makes it easier to manage a business and access finance. We had a chance to catch up with Eric and talk about his great new achievement.

Could you take us along some of the milestones you secured to date?

“I started in 1995 when my dad purchased an old PC for us to play video games on – Prince of Persia! In boarding school I wanted to be a hacker, after watching that classic movie “Hackers”, so in 1997 I started programming at age 14.

I lost the whole “break into banks and steal money” motives and began advanced programming at around 2001 while studying in the UK. When I returned to Tanzania in 2006, I worked a little and then quit to found my company Problem Solved Ltd in 2008.

When I ran out of money in late 2009, I had to go back to work until mid 2011. Then I quit my job again towards end of 2011, and then in 2012 I won $15,000 as part of Apps4Africa! After investing these winnings I have now received $328,000 from the Financial Sector Deepening Trust to go bigger, faster, further!”

What will you invest this money in?

“I’m going to hire a small team of up to 7 people, buy laptops to bundle with my accounting package Minishop, and write a lot more code around supporting systems – payment collection and more. I still need to raise more funding to hire another engineer who, like me, has been writing code for 15 years – but they don’t come cheap! I invested $27 to build Minishop, so I guess the shoestring budget will do for now.”

What would be your recommendations to other entrepreneurs both in and outside the VC4Africa community?

“Three things:

First: Tech pays. Big time! At some point in 2009 my father told me to my face that he regretted his first born son focusing on tech! My company was running out of money and going nowhere. But I stuck to it, because I believed in it. And my father is all smiles now!”

Second: Think biggest. It is no longer enough to think big. You have to go one step further than that. Have a big bold vision and aim to build companies that will last for centuries. The greatest engineering challenge of them all!

Third: Stay in Africa. In 2007-2009 I wanted to leave to go Sillicon Valley in the US. With the power supply problems, Tanzania was not a nice place to be as an engineer. But I made an explicit decision to stay for one simple reason: since everyone else is leaving, they are also leaving all the opportunities for me to exploit!”

The SME Finance Innovation Challenge Fund Eric won is a risk-sharing mechanism. By financing up to half of the cost of developing new services, Tanzania’s Financial Sector Deepening Trust (FSDT) seeks to encourage ideas that might otherwise be too risky to attract commercial operators, but are still worth undertaking. FSDT looks to support projects testing innovative concepts, technologies and business models. FSDT has run two rounds of this challenge since June 2011.

Any last tips for fellow entrepreneurs?

“Raising money in Africa is very difficult but there is a lot more money here than you might initially think. Like the saying goes, first no one wants to give you money, then EVERYONE wants to give you money. Investors in Africa are not dressed in the traditional VC clothes. If you do something amazing, you be surprised how favorable the terms can be. How can people ask for liquidation preference when they have no idea what that is? The “newness” of the investment climate means you can take control much more than you ever could in Sillon Valley!”

For more information about Minishop and Eric Mutta see Eric’s VC4Africa profile. For more information on Tanzania’s Financial Sector Deepening Trust see the FSDT website.