Cofundie – The New Ghanaian Crowdfunding Platform

The new crowdfunding platform Cofundie has been dominating Ghanaian news of late and even found its ways to international publications. You might be asking yourself why, after all there are many online crowdfunding platforms already.

However, this company not only offers its users the opportunity to invest in its crowdfunding campaigns, it also specialises in providing people with affordable housing. The company prides itself on being eco-friendly due to its use of low-cost and/or recycled materials.

Humanitarian Factors That Inspired the Creation of Cofundie

There are numerous reasons why the startup company was created. Chukwuemeka Ndukwe, co-founder and chief executive officer (CEO) of Cofundie, states that his idea was born out of his observations of Africa’s private real estate industry. Ndukwe noticed that most of the real estate financing on the continent was directed towards luxury and commercial projects, which left a big gap in the industry, which overlooked the housing sector. The housing deficit in Africa is the staggering amount of 56 million units, 25 of which are in West Africa alone.

Ndukwe also adds that the problem would only worsen with time and he cites The World Bank’s prediction that the population of Africa is going to double by 2050 (up to 4.85 billion people). Thus, the deficit might reach the unprecedented 100 million units, which would create a housing crisis of unseen proportions.

Cofundie is attempting to address the deficit by offering its investors to fund housing projects, which would create not only the necessary units, but it would also do it cheaply. The reason for this is the company’s dedication to using affordable materials for construction such as earth bricks, used shipping containers, rammed earth and polystyrene panels. By using these materials, the company would spend less money on the creation of housing units, and it would also build them faster. Nevertheless, the units would be eco-friendly, which might bring a specific type of investor who is concerned about the environment and only invests in such projects.

Market Factors That Inspired the Creation of Cofundie

Judging by Ndukwe’s words, his company is concerned about the current housing situation, so it offers a rather libertarian solution to the problem – crowdfunding campaigns in partnership with local councils. Apart from its humanitarian message, Ndukwe also acknowledges his startup’s investment opportunities as a reason for creating it.

As previously said, most financing in Africa goes towards luxury and commercial projects, and the investment opportunities are only open to those who can afford to spend a large amount of money. Another gap in the real estate market proves to be beneficial to the startup company, which addresses this issue and resolves it by allowing its customers to invest low sums, thereby presenting a low-risk investment. This is possible due to the company’s business model, which divides construction projects into individual slots that can be bought.

How Does the Startup Operate

Ndukwe makes it clear to potential investors that the company offers the security they desire. He promises that he slots for sell are backed by real physical properties, and he also reveals that the investors’ data is safe with them as it doesn’t get outsourced to any third parties.

Ndukwe then describes the process through which a housing project must go through before it becomes an investment deal on their website. He states that in order for a project to end up on their website, it first goes through extensive background checks of the potential developers. Then, naturally, the company also reviews deals with the available contractors. Finally, the developers and deals, which are green lit enter the final stage of the process that is the review of the investment committee. Ndukwe says that they have an acceptable rate lower than 5%.

Projects in Progress

The startup company has already started crowdfunding its first 20-units of affordable housing. They have chosen Appolonia City – a new fast-developing community in the Greater Accra area, which aims to offer Ghanaians the chance to get away from the hustle and bustle of the capital with its abundance of parks and other recreational activities. Appolonia City attracts many investors, who realise the opportunity of investing in the development of new suburban communities. It’s no wonder that Appolonia City became the biggest urban developer in Ghana.

Apparently, this is also the reason why Cofundie decided to begin operation by funding these 20-units. According to Ndukwe, they have already gathered 20% of the required amount. He promises that when this project is realised, it would offer “the cheapest beds in Accra” due to their unconventional building materials.

Cofundie is also set to launch in Nigeria some time in 2021.