From the Farm to Africa’s Mega-city:
Why This Investor is Placing a Bet on Africa Tech
There are 132 people living in Summerville. Little girls from this quaint cow town in Northeastern Oregon don’t go into tech. They don’t follow their sense of adventure to Wall Street. And certainly don’t move to Lagos, Nigeria, to find and fund the world’s next billion-dollar startups.
But this one did and has never looked back.
“You’ll never find a husband,” my mom said.
“It’s too dangerous,” my friends pleaded.
“You’ll never make money,” my professors, mentors and bosses protested.
From the sleepy farms of Oregon to the corner offices in Manhattan, a mindset persists: Africa is dangerous, lonely and the birthplace of social and economic ail.
The progressive few who recognize a shimmer of potential still write it off as handout-dependent and decades away from meaningful economic promise.
And, I think they are wrong.
Five years in and I’m one of the investors on the leading edge of finding, funding and growing emerging technologies, which are solving daily problems of the six hundred million connected African consumers.
There are myriad reasons why I’m bullish on Africa. Here are the big three.
As Jeremy Johnson, founder of Andela, Africa’s most elite software engineering and developer training program remarks, “ Brilliance and aptitude is evenly distributed throughout the planet…” Africa has a burgeoning, underutilized, tech-savvy workforce that is being sought by the world’s most notable companies. In 2016 alone, IBM, SAP, Facebook and Mastercard kicked off engineering initiatives on the continent. The virtuous cycle of training, deployment, cost-saving realization and success is perpetuating participation by technology companies, investors, universities and entrepreneurial youth. The outcome? Better equipped, more voluminous and affordable workforce.
Improving startup ecosystem
The promise of Africa no longer rests exclusively on headline-grabbing stories of 2010. Of course, mobile penetration, payments technology advances and off-grid solar are meaningful indicators of Africa’s promise. But Africa’s near-certain vault to become a global technology hub will be driven by a startup ecosystem finally conducive to conceiving, building, incubating, marketing and selling the technologies that will change the world.
Support infrastructure from investors, governments and private institutions — paired with spirits of entrepreneurialism and enabling technologies — are kick-starting massive ecosystem improvements. Investor and entrepreneurial thought leader Nicolas Colin called out the follow ingredients to a startup ecosystem’s success. The expanding presence of each of these captures my belief in potential on the continent.
- Capital: by definition, no new business can be launched without money and relevant infrastructure (which consist of capital tied up in tangible assets).
- Know-how: you need engineers, developers, designers, salespeople: all those whose skills are necessary for launching and growing innovative businesses.
- Rebellion: an entrepreneur always challenges the status quo. If they wanted to play by the book, they would innovate within big, established companies, where they would be better paid and would have access to more resources.
Let me be controversial for a moment. Africa will soon produce more billion dollar startups than any other market on the planet over the same time period.
Simply, there are too few other regions with addressable markets in the high-hundreds of millions that have been a) so woefully underserved, are b) healthily agnostic to existing brands and c) maintain a hunger to adopt technology and services like their global peers.
As McKinsey reports,
“…Africa is still urbanizing and much of the economic benefit lies ahead. Productivity in cities is three times as high as in rural areas and, over the next decade, an additional 187 million Africans will live in cities […] This urban expansion is contributing to rapid growth in consumption by households and businesses. Household consumption grew at a 4.2% compound annual rate between 2010 and 2015 — faster than the continent’s GDP growth rate — to reach $1.3 trillion in 2015. We project Africa’s consumers will spend $2 trillion by 2025.”
As luck would have it, my mom, friends and former bosses and mentors were partially right: Africa is not making this billion dollar exit easy.
Market immaturities require a level of local participation, contextual knowledge, networking and persistence unmatched in technology hubs around the world. Grooming investable founders is a labor of love — as is the ongoing education and reinforcement of startup principles around product, market and revenue validation.
But the dream of unicorns is alive and well.
And it sure beats milking cows.
This article originally appeared for the Global Entrepreneurship Network GEW Series. Lexi Novitske of Singularity Investments in Nigeria is one of the GEW Ambassadors for Women and Investors.