Africa Eats quite often touts the fast growing revenues of the bizi. But are they profitable?
Profitabilty is not commonly a question asked of early-stage fast-growing companies. Over in the corner of venture capital funding tech-based startups, profits are often an afterthought. But the bizi are not tech-based and the reason past updates have not discussed profits is that the bizi are far more often than not, running profitably.
“More often” as in the worst year on record, 2019, just four were not profitable. Only one was unprofitable in 2020. Three in 2021. Just two in 2022. And of those, just one consistent unprofitable company that nonetheless grew from $40,000 in revenues in 2017 up to $142,000 in 2022.
Even more exciting is looking at the profit margins of the portfolio. As a whole, including the companies that lost money, aggregate profit margins (i.e. aggregate profits divided by aggregate revenues) have almost doubled from 9.2% back in 2017 to 18.1% in 2022, with the 2021 dip due to a large amount of theft from one bizi.
The theft aside, profit margins have grown year after year, despite (or because of) the growth of the bizi over that six year span.