Tanzania’s FUNGUO Innovation Programme has expanded its total catalytic funding to startups and small businesses to TZS 6.5 billion (approximately $2.65m), signalling a deeper commitment to nurturing the country’s emerging innovation landscape.
The latest investment tranche targets 13 early-stage companies, bringing the total number of ventures supported by the programme to 74. The move aims to bridge a critical funding gap for local entrepreneurs, helping them scale solutions and attract follow-on investment.
FUNGUO, which means “unlock” in Swahili, is implemented by the United Nations Development Programme (UNDP) in Tanzania with primary funding from the European Union (EU), alongside contributions from the UK’s Foreign, Commonwealth & Development Office (FCDO) and the Government of Finland. Its core model focuses on providing early-stage, de-risking capital to innovators, particularly those led by women and young people.
For founders like Geophrey Tenganamba, co-founder and CEO of agritech startup MazaoHub, this type of support is crucial for survival. His company, which combines AI-powered soil analysis with a network of physical farmer support centres, recently closed an oversubscribed $2m pre-seed round. He credits FUNGUO’s initial, smaller cheque with making it possible.
“Before we got any other funding, we would not have a soil kit without the UNDP,” Tenganamba said. “They gave us $50,000 through the FUNGUO programme to pilot the design of our soil kit. That money played a catalytic role which enabled us to get where we are today.”
More than just capital
FUNGUO’s strategy extends beyond direct investment. It operates as an ecosystem builder, tackling what it identifies as systemic barriers to innovation and business growth in Tanzania.
Alongside the funding announcement, the UNDP, in collaboration with Deloitte East Africa, launched a new landscape study titled, “Catalysts for Growth: A Landscape Study of Entrepreneur Support Organizations in Tanzania,” to map the resources available to founders. The programme also supports initiatives like the #YouthIgnite fellowship for student founders and the #Greencatalyst Initiative, which focuses on innovation in the forestry value chain.
The approach has garnered support from both the Tanzanian government and international partners, who see a thriving startup scene as key to the country’s economic future.
“The government can create an enabling environment where innovators and entrepreneurs can thrive. That is our commitment,” said Dr. Blandina Kilama, Deputy Executive Secretary for Trade and Innovation at the National Planning Commission. She pointed to new Crowdfunding Guidelines as a recent example of policy designed to “make starting and scaling a business in Tanzania simpler, faster, and less expensive.”
A strategic gateway
For its European backers, FUNGUO is a key component of a broader strategy to foster private sector-led growth in the region.
“The European Union firmly believes that sustainable development comes from the ingenuity and initiative of entrepreneurs,” said Marc Stalmans, Head of Cooperation for the EU Delegation to Tanzania. “Under the Global Gateway [the EU’s strategy for infrastructure investments], we are investing in the people and ideas that are shaping Tanzania’s economic transformation.”
This sentiment was echoed by other partners, who view the programme as a vehicle for creating a more resilient and inclusive economy.
“Supporting innovation and entrepreneurship is key to building a stronger, more resilient Tanzanian economy,” noted Anna Wilson, Development Director at the British High Commission. Sanna-Liisa Taivalmaa, Head of Cooperation at the Embassy of Finland, highlighted the focus on empowering “women and youth entrepreneurs who are shaping the future of Tanzania’s innovation.”
As FUNGUO deploys its latest round of capital, the focus will be on whether its catalytic model can consistently help startups like MazaoHub cross the early-stage valley of death and attract the commercial capital needed to build a self-sustaining tech ecosystem in East Africa’s largest country.
FUNGUO: BY THE NUMBERS
- Total Catalytic Funding: TZS 6.5 billion (~$2.65m)
- Total Startups Supported: 74
- Latest Cohort Size: 13
- Key Backers: European Union (EU), UNDP, UK (FCDO), Government of Finland