One of our most read posts is Cost Of App Development
The post provides some insight to a question that is clearly asked to Google by many South Africans.
To attach a cost to building something that exists in the digital space is often difficult to understand. We as humans more easily understand and accept our car service which was for parts and labour. But when that labour/time is applied to something digital that you can’t really touch or see, it is more difficult to understand pricing.
Behind the scenes, when developing an app, it’s the same as building or servicing a vehicle.
Components are being put together to form a whole and a functioning unit that solves a problem for a specific purpose.
When you have an idea for an app, you will receive a quotation for it from a number of app development companies in South Africa. The estimate may be for a MVP app, a cross-platform commercial app, or a native commercial app.
You may then need to decide to apply for funding or app finance. If you want to go try and get funding, you can have a look at this recent article by Venture Burn. But be warned that it is an administrative challenge to comply with all the requirements these funding organisations have.
Your second and much easier option would be to apply for mobile app financing. You can have a look at Lula Lend.
But often times we have been able to provide a mobile app estimate that is so pleasing to the pocket, that our clients were able to self fund the app. Rather than paying high interest on finance or giving away equity in their idea to venture capitalists.
Exploring Funding and Financing Options in South Africa
Securing funding for app development in South Africa can be a challenging but rewarding process. Understanding the various options available can greatly increase your chances of success. Here are some key funding and financing methods to consider:
Government Grants and Support
1. Technology Innovation Agency (TIA): TIA offers support for technology-driven projects, including mobile app development. They provide both financial and non-financial assistance, focusing on innovation and commercialization.
2. Department of Trade and Industry (DTI) Grants: The DTI offers various grant schemes that can be leveraged for app development, particularly for projects that contribute to economic growth and job creation.
Private Funding Options
1. Venture Capitalists (VCs): While giving away a portion of your equity, partnering with a VC can provide substantial funding and valuable business expertise. Research VCs in South Africa that have a history of investing in tech and app development.
2. Angel Investors: These are typically high-net-worth individuals looking to invest in promising startups. Networking in tech and business events can open opportunities to meet angel investors.
Crowdfunding
1. Online Platforms: Websites like Kickstarter, Indiegogo, and local platforms such as Thundafund allow you to present your app idea to the public and raise funds through small contributions from a large number of people.
Bank Loans
1. Traditional Bank Loans: Some banks offer loans specifically for tech startups and app development. These loans usually require a solid business plan and credit history.
Alternative Financing
1. Peer-to-Peer Lending: Platforms like RainFin enable you to obtain loans directly from individuals, bypassing traditional banking systems. This can be a flexible option, though interest rates may vary.
2. Bootstrapping: This involves using your own savings or revenue from the business to fund the app’s development. It’s a riskier option but ensures you retain full control over your project.
Making the Right Choice
When considering these options, assess the feasibility and implications of each. Government grants, for instance, are often non-dilutive, meaning you don’t have to give up equity, but they might have stringent requirements. VCs and angel investors, while providing significant funds, will likely want a share of your company.
It’s also important to have a clear and detailed business plan when seeking funding. This should include market analysis, a clear monetization strategy, and projected financials. A strong plan not only increases your chances of securing funding but also helps you in strategically planning the development and growth of your app.
We invite you to talk to us about your solution. Let’s see what we can do for you.