Africa Startup: Micro-ECommerce Boomerang

AUGUST 11, 2018

Continuously updated with new inputs and trends For Better or Worse Emergent Technologies Changing Africa!

Are these efforts going to increase the use of Information Communication Technologies and develop broadband penetration in Africa?

Will technology increase the divide or help … Continue reading

Entrepreneurial Education, Digital and Knowledge Economy in Africa

In Africa, the creation of Techubs is a great challenge in itself given that they have to be established outside or on the marge of the traditional educational schools and universities. In the Western world, academic institutions served as the incubators and the nest for the emergence and the development of high tech companies, startups and even just platforms and applications such as the ones used for grocery and food and beverage to be home delivered.

The first hurdle for the Tech Hub is effectively to confront the dominant position of existing academic institutions as the actual hub of the knowledge base and as space for knowledge production. Tech Hub have the opportunity to establish new parameters in the formation of new educational environments and to open new areas of research and development based on the technical innovation that can tackle the areas where Africa needs to catch-up for the purpose to reach a level of response and the provision of solutions to daring social and economic backwardness. are challenging the dominance of traditional universities as sites of knowledge production.

These new form of Tech hubs can have the capacity and the resources to orient the learning process toward the development of interdisciplinary projects along heterarchical and boundary-spanning programs to be at the forefront in the conception and implementation of more efficiently generate innovative solutions that African economies and regions are actually facing as critical societal challenges.

As traditional universities grasp with resource constraints, insufficient industrial participation, and the limitations imposed by the institutional regulation of disciplinary knowledge, Tech Hubs and Centers have the possibility to lead the way in generating new knowledge and innovative solutions in terms of economic and social value by creating new jobs, stimulating the ecosystem for entrepreneurship and improving the quality of life through technology.

One of the current area for such interactions can be conducted through the establishment of a digital economy that will encompass and facilitate communication and networking between foreign trade officials and international financial institutions and their relations with African centers of economic decisions. The sector where such innovation can take place will be the building of entities that can have access to reliable data and closer management of flows and their cyclical changes. The corresponding data can facilitate decision-making like any sectorial intervention without calling into question the commitments made to the rest of Africa and the world including African countries and regional integrated partnerships with cultural and commercial exchange treaties.

The Reality of Digital Network and Startup / Tech Hubs in Africa

During the first quarter of 2020, Africa has 522 million internet users representing 11.5% and was ranked third in the global tally. The first one wa Asia that accounts for more than half of the global internet users. Data gathered by Learnbonds indicates that during the first quarter of 2020, the Asian continent accounted for 2.3 billion users representing about 50.3% of the global users. From the same data, Europe has the second-highest number of internet users at 15.9% which represents 727 million users.

With 453 million users, Latin America and the Caribbean region comes fourth. The region accounts for 10.1% of the worldwide internet users. In fifth place is North America with 327 million users, which represents 7.8% followed by the Middle East at 175 million users (3.9%). Oceania and the Australian region account for the least global internet user globally at 29 million which represents 0.6%.

The rise of Africa is a confirmation of a trend that compared to all regions, the strongest growth has been reported in Africa, where the percentage of people using the Internet increased from 2.1 per cent in 2005 to 24.4 per cent in 2018, according to ITU data. … The theme, “Boosting Africa’s Digital Economy,” recognizes the key role of digital technologies in the modern economy. May 27, 2019

Africa Needs to Think Big and Think Fresh

According to certain indicators, Africa is hosting only 11% of the world’s Internet subscribers and only 35.2% of the African population are accessing the Internet and mainly trough the mobile phone.

In response, efforts were made by the African governments to increase the development of fiber optique as network. Taking the example on the American, European, Indian and Chinese markets, African regulators are trying to implement policies “that encourage network sharing and access to ducts, thus facilitating the roll out of networks and reducing deployment costs. This trend is actually happening in Kenya, Nigeria, Ghana, Tunisia and Nigeria.

However, some people in Africa have been abandoned along the way in recent years as technology and robotisation have reduced the wages of some communities “of workers, says Christine Lagarde, the director general of the IMF.

On the other hand, the Director of ITU’s Telecommunication Development Bureau, Doreen Bogdan-Martin said: “Africa cannot afford to think small or act slowly, and at the current rate of progress, hundreds of millions of African children will still be denied the opportunity to realize their potential. Without more rapid digital transformation, Africa will not succeed in creating the huge number of new jobs needed to match its population growth.”

Building a solid digital economy will require a focus in key areas, such as: digital infrastructure, digital literacy and skills, digital financial services, digital platforms, and digital entrepreneurship and innovation, says Ms Bogdan-Martin.

“Can we attain the goal of universal and affordable access to broadband for all Africans by 2030? Not without a paradigm shift,” says Ms Bogdan-Martin. “Africa’s digital transformation is going to need all hands on deck. We need to work together more effectively; engage old and new partners more effectively; innovate more effectively.”

“We need a coordinated effort to push forward the digital transformation of Africa through shared vision, policies and measures to support pan-African digital integration,” says Ms Bogdan-Martin. “Digital transformation will provide the springboard for a leap into the African Century. Africa’s youth are ready and waiting to make that leap. We must not let them down.”

Startup and Tech Trends in Africa

In a challenge to Uber’s (Dara Khosrowshahi) dominance in South Africa, Estonia-based ride-hailing app Bolt (Markus Villig) to double its service there after having raised more than $200 million from investors since its launch in 2013. Reuters

More start up funding, tech hubs

Since 2016, there has been an uptick in start-up investments across Africa, with one estimate putting it at $366.8 million. Increasingly, investors are showing more faith in African start-ups, especially in countries like Nigeria, South Africa, and Kenya. Nigeria attracted more funding than anywhere else across the continent, boosting its tech ecosystem and witnessing the opening of tech hubs by Google, Facebook, and others. Start-ups like payments service firm Flutterwave raised $10 million and Andela, which trains and pairs coders with global companies, raised $40 million.

After infoDev launched its mLabs in Kenya, Senegal, and South Africa in 2011, they introduced incubation programs that successfully supported the creation of over 100 start-ups that raised close to $15 million in investments and grant funding, and developed over 500 digital products or services.

As these ecosystems and start-ups have matured, more needs to be done to improve the marketability of these companies to global and local investors.This year, our team launched XL Africa, a pan-African acceleration program for growth start-ups seeking Series A funding, between $250,000 and $1.5 million.

XL Africa received over 900 applications for 20 spots. Some of these start-ups, like Sendy and CoinAfrique, are mLab program alumni.Sendy uses motorcycle delivery to compete with Kenya’s inefficient postal system and expensive private courier companies. Sendy had first joined mLab East Africa at the early stages of customer discovery and product validation, and through its support, the company has grown considerably. With a network of over 300 drivers, their app enables individuals and businesses to connect with drivers to request on-demand courier services, while also providing GPS-enabled tracking, transparent pricing, and insurance.

Sendy now facilitates over 11,000 deliveries each month, and is a prime example of an innovative company ready to compete with larger players across the region.Unlike many acceleration programs, XL Africa does not take an equity stake in the companies, but a key value proposition is the exposure to global and local investors. To ensure a quality pipeline, the XL Africa selection process was investor-driven.

We worked closely with the IFC’s Startup Catalyst team along with other investors from Goodwell Investments, Knife Capital, Nest Africa, Silvertree Capital, Singularity Investments, TLcom Capital, and 4Di Capital. These investors consciously selected companies, such as Sendy, that could most benefit from XL Africa’s specialized curriculum in the hopes of attracting additional investment.

The average size of the deals struck in Africa by startups also increased year-on-year at every stage of investment, with Series A funding, for example, increasing to around $3.7m. Series A refers to a company’s first significant round of venture capital financing. At the same time, the number of tech hubs in Africa has risen to 310, with 173 accelerators and incubators recorded in 2016, according to the World Bank.

There were 117 in the previous ye For Startups : High Priority Should be given in Assembling Founding Team

While it is true that an entrepreneur need to be very discipline hence the 24 steps in Disciplined Entrepreneurship taught by Prof Bill Aulet is needed, I cannot hide my eureka moment when I become more and more convinced after conforming : the number one skill that an aspiring founder must prioritize is FOUNDING TEAM ASSEMBLY – choosing co founders, splitting equity, recruiting advisors, managing a board.

This is articulated by Thomas R. Eisenmann, Rob Howe and Beth Altringer in “What Does an Aspiring Founder Need to Know?“Interestingly, Prof Matt Marx of MIT Sloan elaborated carefully in his class “Dilemmas in Founding New Ventures (a full semester in 80 minutes)”. In it he gave examples from Smartix, Segway, Wily Technology, Zipcar.com could have conducted better during the founding team assembly stage. He outlined some observations that Skills and Networks of the founders must be complementing each other, but Objective must be similar among the founders. Skills is easily observed. Networks is also rather easy if you probe. However, the raison d’être of co-founder is not observable.