The ARH Framework — Methodology

Africa Rating Hub (ARH) provides an independent and structured framework to evaluate Seed to Growth-stage african startups based on verifiable data, standardized criteria and investor-aligned analysis.

The objective of the ARH methodology is to reduce information asymmetry between startups and investors by producing consistent, comparable and decision-oriented evaluations.

The ARH framework is designed specifically for:

• African startups in the following sectors: Fintech, Logistics & Mobility, Agri tech, Health tech and Climate & Energy. Additional sectors will be incorporated progressively.

• Seed to Growth-stage

• Startups with measurable traction and available data

ARH focuses on Early-stage to Growth-stage african startups with sufficient data and growth, excluding pre-seed startups due to limited data and SMEs due to lack of scalable growth.

Our framework produces two distinct but interconnected scores for every startup:

• The ARH Performance Score: Measures the intrinsic strength and growth potential of the business across 7 specialized pillars.

• The Data Trust Score (DTS): A proprietary integrity metric. It evaluates the Completeness, Verifiability, and Consistency of the documents provided. This may include financial data, traction metrics, internal documents or any other supporting document. A high-performance score with a low DTS is flagged as high risk.

Each startup is evaluated across seven core pillars covering both performance and risk dimensions:  

I. Legal & Structural Compliance 

We verify the startup's "Right to Operate."

• Key Focus: Legal existence, sector-specific licenses, governance documentation, data protection compliance, and the robustness of the contractual framework.

II. Team & Execution capacity

Execution is analyzed as a measurable track record, not just a bio.

• Key Focus: Executive Team Experience & Complementarity, execution history, Local Context Mastering (navigating African market specificities), governance readiness, and KPI delivery proof.

III. Market & Traction

We quantify product-market fit using real-time growth metrics.

• Key Focus: TAM/SAM/SOM clarity, competitive intensity, customer acquisition cost (CAC), lifetime value (LTV), customer growth, retention rate and revenue growth. We adjust these metrics for local inflation and currency risks.

IV. Business Model Viability

Evaluating the engine of value creation.

• Key Focus: revenue & Operating Costs, Average Revenue Per User (ARPU), Unit economics (contribution margins), burn rate management, runway duration, and customer concentration risks.

V. Financial Health Sustainability

A deep dive into the balance sheet, the Profit & Loss Statements and cash flow.

• Key Focus: Equity ratios, debt-to-equity, interest coverage, cash conversion cycles, and capex intensity. We adjust these metrics for local inflation and currency risks.

VI. Impact, Resilience & ESG

Measuring sustainability and systemic contribution.

• Key Focus: Systemic problem solving (SDG alignment), revenue diversification, business continuity planning (BCP), and equitable HR policies.

VII. Risk Profile

Overall risk exposure and critical vulnerabilities.

• Key Focus: Provides a consolidated view of the key risks identified across all pillars, highlighting the startup’s overall risk exposure.

Each pillar contributes to the overall analytical assessment through internally calibrated weightings reflecting its relative impact on startup sustainability, execution capacity and structural risk exposure.

To preserve methodological integrity and analytical consistency, certain scoring mechanics and calibration models remain proprietary.

To ensure a high Data Trust Score (DTS), startups must provide official and verifiable documentation across all pillars.

1. Legal & Structural Compliance

• Registration/Governance: Articles of Association and Incorporation Certificate.

• Ownership: Updated Cap Table and Founders’ Agreement.

• Licenses: Sector-specific operational permits (Fintech, Health, etc.).

• External Relations: Standard contracts (clients, employees, partners...)

• Protection: Privacy Policy and Terms of Service (ToS).

2. Team & Execution Capacity

• Leadership: Executive CVs, Professional LinkedIn profiles or Key Employee contracts. 

• Organization: Functional Org Chart, Hiring plan or roadmap

• Validation: KPI dashboard, performance reports or technical certifications.

3. Market & Traction

• Market Insight: Pitch deck (including TAM / SAM / SOM analysis)

• Revenue: Profit and Loss Statements (P&L) or internal sales reports.

• Growth: User/customer analytics dashboard.

• Validation: Signed commercial contracts or Memorandums of Understanding (MOUs) with key partners.

4. Business Model Viability

• Economics: Unit economics breakdown (CAC, LTV, Gross Margins).

• Planning: 12-month Financial Projections and Burn Rate Report.

5. Financial Health Sustainability

• Statements: Balance Sheets, P&L, and Cash Flow statements (Last 2-3 years).

• Verification: Official Bank and/or Mobile Money Statements (Last 6 months).

• Taxation: Tax Compliance Certificate or proof of filing.

6. Impact, Resilience & ESG

• Impact metrics report or SDG alignment data.

• Business Continuity Plan (BCP) and Risk Mitigation register.

• Employee handbook or equitable hiring policy.

In addition to the required supporting documents, applicants may submit supplementary evidence deemed relevant to substantiate their application

Submission Standards:

• Format: Digital copies.

• Integrity: All documents must be dated, and legally valid.

• Confidentiality: All data is handled under strict Non-Disclosure Agreements (NDA).

• Data Intake: Submission of structured data via the ARH Secure Portal.

• Evidence Audit: Verification of bank statements, tax filings, cap tables, dashboard exports and any other supporting documents submitted.

• Analyst Synthesis: Qualitative adjustment by our sector experts.

• Report Delivery within 3 to 7 business days.

All claims pertaining to the ARH reports are subject to a 3-day submission window starting from the date of delivery. Such claims must be sent solely to audit@africaratinghub.com and must include supporting arguments or evidence. ARH reserves the right to decline any submissions received thereafter or lacking sufficient proof.

ARH operates as an independent evaluation framework.

• No financial interest in evaluated startups

• No influence from external parties

• Standardized methodology applied to all cases

All outputs reflect an analytical judgment based solely on available data and defined criteria.

The ARH framework produces two types of outputs:

1. Pre-Fundraising Diagnostic Report (valid for 03 months)
   → Identifies gaps and areas for improvement

2. Official Rating Report (valid for 06 months)
   → Provides a structured, investor-oriented evaluation

ARH evaluations:

• are based on data available at the time of analysis

• do not constitute investment advice

• are not a substitute for full due diligence