Technology innovation has been peaking high on the African continent with some of the world’s best startups and full-fledged companies being birthed there. The boom could be attributed to the fact that technology evens out the playing field of the previously western dominated products with huge capital backing. Additionally, the products do not thrive in the African market because they are not specifically developed with them in mind. A few of the tech giants have closed operations because of the westernized solutions for African problems.
This has left a big gap that can only be filled by Africans for Africans in a market they best understand and relate to. Creativity and the natural entrepreneurial spirit also play a vital role.
Popular technology startups/companies
Some of the thriving technology startups/companies founded by Africans or originated on the African continent
Some of these companies e.g. Interswitch had up to $1Bn valuation and about $200m capital investment in 2019, Opay raised $170M and Andela $100M all in 2019.
Despite the success of some companies, some have seen their downfall and slow exit out of the African market.
In April 2019, Jumia- launched on the New York stock exchange as the first African e-commerce startup with a skying start of $14.50 up to $49.77 but later fell to $2.5 and hasn’t recovered since. Because of going public, several allegations on fraud surfaced. Its Africanness also came into question as most of its founders and beneficiaries are not from or even based on the continent yet it is being marketed as an African startup. Almost all its developers are stationed in Europe together with other top executive positions. This highlights the cross-cutting concern on the African ownership of these ventures. This among other things lead to its downfall. Read more about this here.
Andela also recently made waves on its way out, at least from its initial business model that involved rigorous training of software engineers and outsourcing them on projects with big tech companies. There were some alleged reports of exploitation and unfair remuneration. On the positive side, the company increased the credibility of software engineering in the African market that was previously an abstract career. Read more about it here.
On the other hand, companies that design their products around the market together with people active in the different communities as opposed to importing western solutions are currently thriving, of course with a few challenges.
Solutions to some of these challenges?
- The biggest solution is to get Africans to invest in our own ventures. Most of the challenges originate from influence from western companies in the process of acquiring funding and market establishment. This interference has been a big deterrent to longevity and growth from a startup to a large company. There is endless wealth on the continent despite what the media portrays, however, the wealthy invest in real estate and other traditional businesses mostly non-technological. If a portion of this funding was to back some of the promising startups, some of the bottlenecks would be eliminated and the involvement of western influence would be limited to team contribution but not executive decision. This protects the long term vision towards the African direction that it sought out to achieve. It also mitigates bias related to seeking popular western funding that has led to partnerships formed only as a way out of bias but not necessarily need and vision for the startup.
- Also for foreigners/ multinationals venturing out on the African continent, It is important to design the product with the market in mind, preferably with the African professionals already experienced locally. This is often overlooked with the perception that western solutions will appeal to Africans but alas, faced with a rude awakening, ask the multiple multinational companies or startups that have exited the market. The African market is a growing one and also it is very challenging because of the many cultures and backgrounds and varying economic sentiments. This makes it hard to have a universally appealing product that people want to pay for. Read more here about why multinationals have failed on the African continent.
- Incentivizing internet access as only a small percentage of the population have access to affordable internet. Technology products rely on usage number and increased internet access does accelerate scalability across the countries.
This is a booming space and the next Facebook is no doubt, going to be on and from the continent. Position yourself to be part of the wave when it hits.