Will African Hubs be Eagles or Lions?

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As at March 2018, according to the GSMA, there were over 400 active incubators, accelerators, and co-working spaces (often collectively referred to as innovation hubs) in 93 cities across 42 countries in Africa. In the last two years alone over 100 new hubs have opened across Africa.

The arrival of multinational tech giants such as Google, Facebook and others in the five countries where most of Africa’s early-stage tech startup activities are concentrated (South Africa, Kenya, Nigeria, Egypt and Morocco), seems to be spurring local innovation hubs to revamp their business models and offer fixed-period accelerator programs targeting later stage startups — also known as scaleups. This, presents them with the challenge of integrating with the rest of the continent’s entrepreneurial ecosystem to provide their startup entrepreneurs with access to corporate business opportunities, expert mentorship, team talent, as well as local and international capital.

Some credit Norwegian serial entrepreneur, and chief executive of Meltwater, Jørn Lyseggen, with being a key catalyst for the massive wave of startup incubation and acceleration activities currently sweeping the continent. In 2008, Lyseggen launched Meltwater Entrepreneurial School of Technology (MEST) in Accra, Ghana to help “prove that a new generation of young, successful global software entrepreneurs can originate from Africa”. Today apart from Ghana, MEST has a footprint in Kenya, Nigeria and South Africa and last year welcomed its first Francophone entrepreneurs from Côte d’Ivoire into its Accelerator program.

Two years after MEST launched, the American tech entrepreneur Erik Hersman and his team acted on “a need in Africa to create a nexus point for technologists, investors and tech companies” and launched iHub in Nairobi, Kenya. iHub quickly became one of Africa’s most publicised tech hubs; a poster child for the African tech hub experience. iHub managed to secure notable partnerships with the likes of the World Bank Group’s infoDev program with whom they launched Traction Camp, a six-month Accelerator program that supports digital startups from Ethiopia, Kenya, Rwanda, Tanzania.

In 2011, Nigerian innovation architects Bosun Tijani and Femi Longe launched the Co-Creation Hub (CcHub) in Yaba, Lagos as Nigeria’s first “open living lab and pre-incubation space embracing technologists, social entrepreneurs, government, tech companies, impact investors and hackers”. Last year, CcHub partnered with Google for Entrepreneurs in PitchDrive, a three-week EUR20 million fund-raising tour of London, Amsterdam, Berlin, Zurich and Paris for 14 African tech startups. More recently, CcHub launched the Giving4Good challenge, designed to explore ways in which technology can increase individual philanthropy towards NGOs and CSOs.

When Facebook founder Mark Zuckerberg made his first-ever visit to Sub-Saharan Africa in 2016, he held town hall meetings with entrepreneurs working out of CcHub in Lagos and iHub in Nairobi. Since Zuckerberg’s Africa call, the continent has seen a marked increase in global tech players participating in hub-based innovation programs and within Africa’s entrepreneurial ecosystem at large.

Following Zuckerberg’s visit, Facebook launched NG_HUB in partnership with local innovation hubs in Nigeria to “bring together the Nigerian tech community including developers and startups to enable them collaborate, learn and exchange ideas.” The initiative has roped in CCHub in Lagos, Ventures Platform in Abuja, CoLab in Kaduna, nHub in Jos, and Roar Nigeria in Enugu.

Meanwhile, in 2016, in a bid to stimulate the financial services space, Barclays Africa’s Rise fintech innovation hub in Cape Town, South Africa ran a 13-week mentorship program involving startups from Kenya, South Africa, the USA and Israel aimed at fostering innovation and developing new technology-based solutions to enhance its banking services.

Not to be outdone, Google recently selected startups from Nigeria, Kenya, South Africa, Ghana, Tanzania, Uganda to participate in the first instalment of its African Launchpad Accelerator which will provide free mentorship and guidance to enable them overcome critical scale and growth challenges. Over a three-year period, the program is also set to offer modest, equity-free funding to some of the most promising recruits.

African hubs are aggressively re-evaluating their former “grant maintained” business models and introducing more focused self-financing fixed period (i.e. 3/6/12/24…60 month) accelerator-type service models targeted at supporting scaleups to ensure that they maintain momentum as they pass through the seed stage and on to series A, B and beyond. This process of reassessment on the part of hub operators, and the increasing participation of global tech giants signals that progress is being made towards ecosystem maturation.

For Africa’s innovation hubs to keep adding significant economic value within the ecosystem, they will need to accelerate moving away from their traditional, grant-maintained, self-contained “eagle flying solo” service delivery method of ideation, resourcing, and operations, and embrace a new “lions in a pride” outlook to value creation for their startups and scaleups which by integrating with other local, regional and international entrepreneurial ecosystem players.

Personally, I’m partial to an Angel/Hub/Corporate curated scaleups model.

Written by

Entrepreneur, Writer, Speaker, Mentor, Investor and Advocate on things Technology, Education, Mobile and Africa

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