“Nigeria is Africa’s largest economy and 26th in the world. Its GDP stands at $510 billion with immense growth potential. A stable and peaceful Nigeria will contribute to Africa’s rise and integration into the global economy. On the other hand, an unstable, stagnant and conflict-driven Nigeria will be a threat to regional and global stability.”immense growth potential, global economy, nigeria
This article was originally published in SXSWorld Magazine
Hardly a day goes by without an African tech startup being featured in the mainstream media. CNN regularly updates its special report on the topic; The Guardian covers local debates surrounding emerging ecosystems; The Financial Times tracks Africa’s mobile revolution; Forbes has extended its “Top 10” series to include African female tech founders; Vanity Fair pins its hopes of “continental lift” on entrepreneurs. Blogs, opinion pieces and social media cover the sector in even more granular detail. Judging by VC4Africa’s 2015 report on venture finance, perspectives on African incubation and funding models, and the entrepreneurship program announced by Nigeria’s investor and philanthropist Toni Elumelu, it would seem that the African tech sector is among today’s most dynamic industries.
Amid the buzz, many investors are asking: “Is the hype warranted?”
According to VC4Africa, matchmaker of very-early-stage startups and investors, investments through the platform more than doubled in 2014, rising from $12 million to $26.9 million, while the average investment grew from $130,000 to more than $200,000. Their research shows that 49 percent of ventures start generating revenue in their first year and that 44 percent are successful in securing external investment. More than 75 percent of these are in the technology sector, with agriculture, health, finance and energy startups also represented.
Further along the growth path, a smaller number of startups have recently netted over $300 million from a very diverse set of investors, according to CBInsights.
Recent Investments in African Tech Startups
Adapted from: https://www.cbinsights.com/blog/african-tech-startups
At least eight companies have acquired growth capital in Kenya in 2014, along others in Nigeria, Egypt, Ghana, Tanzania and South Africa and elsewhere.
New early-stage funds and angel networks in or focused on Africa are also on the rise. Among others, three models stand out: London-based NewGenAngels a collaboration between African and European networks (GAIN, EBAN and AAN); Kenya’s Savannah Fund, a partnership between Erik Hersman (iHub, Ushahidi and BRCK founder), i/o Ventures, 500startups and Draper Associates L.P.; and RENEW, linking American and African investors and startups.
Many early stage investors are still learning from their own experiences and adjusting their strategies accordingly. For instance, while most are bullish on Kenya’s tech scene, 88mph, an African seed fund has put further investments in Kenya on hold, while pursuing opportunities in Nigeria’s booming tech sector.
African entrepreneurship ecosystems have also benefited from a large number of technology incubators, accelerators and coworking spaces, connected through networks such as AfriLabs and backed by private sources, such as MEST in Ghana, and public-interest projects, such as infoDev’s mLabs and mHubs.
According to VC4Africa, the increase of capital is driven by three key trends: growing interest in startups from the African diaspora, the rise of local angel investors, and an increase in cross-border investments.
All of these instigate a positive change beyond investment returns; they set in motion a chain of opportunities in emerging and frontier economies. As Stella Kariuki, founder of Zege Technologies, once told me: “I want to be the change I want to see. [. . .] We build solutions that could be global but also solve African challenges practically.” Many of the startups serve consumers at the Base of the Pyramid — the three billion people globally who live on less than US$2.50 per day, a market that is still largely underserved when it comes to basic services such as energy, education, health and banking.
It seems clear that investors and startups in Africa are getting to know each other better and are making more and better matches possible. This is an important step in reducing “the missing middle”: the absence of financing beyond the earliest stages of a company’s growth. As enterprises enter national or regional markets, their capital requirements increase exponentially. Without private and public sources of investment, these requirements stifle all but the independently wealthy entrepreneurs and those with established business networks. A diverse resource base for early-stage firms democratizes the opportunity for growth-oriented entrepreneurs and increases the overall potential of the local creative class.
So is now a good time to invest in African technology startups? The answer is yes, as long as investment decisions are made with care, patience, and in partnership with local investment communities.
Maja Andjelkovic co-leads the Digital Entrepreneurship Program at infoDev, a global program in the World Bank Group that supports growth-oriented entrepreneurship in emerging and frontier markets in the tech, climate and agribusiness sectors. Maja is interested in the potential of entrepreneurship to contribute to economic, environmental and social development. She has spent over 13 years connecting these fields, including as product manager in a web startup. She is a PhD student at The University of Oxford’s Internet Institute.
infoDev / the World Bank Group is organizing two sessions at Startup Village at SXSW Interactive 2015; one on the dilemmas and questions surrounding investing in tech startups in emerging markets, and the other on scaling up and accelerating technology innovation in Africa.
Angel investors interested in forming or growing their own local networks can benefit from practical advice and templates in a guide for angel investor groups published by the World Bank’s infoDev program and the Kauffman Foundation.
Sean Ding, Angela Bekkers and Jeremy Bauman contributed to the article.
This is a pilot issue for Digital Content Africa, which will launch
shortly as a fortnightly e-letter that will cover all forms of digital
content and services but with a particular focus on film and music.
The Top Story in this pilot issue looks at how one of Nigeria’s newest
online platforms has sought to carve itself out a niche in what might
otherwise become a rather crowded market.
Leaving aside the online platforms that deal mostly in pirated content,
there are only really two large online platform contenders in Nigeria:
iROKO and Afrinolly. iROKO is still largely focused on the diaspora but
Afrinolly has an Android platform that has attracted a significant user
base in Nigeria.
Dobox.tv launched in March 2013 and has very quietly been building up both
its users and its content. It has an attractive interface with various of
its content topic areas tagged with the Box title: for example, the Magic
Box genre gives users access to what it describes as “quality Nollywood
So what are these? It gives as an example Tunde Kelani’s MAAMi (see video
clip interview: [http://www.youtube.com/watch?v=y_wZrQGM67Q] )but it also
carries Lekki Wives, Aina, Misfit, Turning Point, Amina, and First Cause.
On 25 October this year, it did a simultaneous online premiere with the
cinema release of Confusion Na Wa. It also has a music channel called
Music Box that plays non-stop Nigerian music videos. Live Box offers live
transmissions of TV stations, including Nigeria’s TVC which has just added
an entertainment channel. Using iBox, customers can upload their own
For payment, the customer opens a wallet when he or she joins and to get
content, they need to keep the wallet topped up with cash:”We are
connected to all major gateways in Nigeria including Visa and Mastercard,
Quick Teller and the Verve card. We are not yet connected to Paga.” Its
DRM system means that customers can download and have what is effectively
a “rental period” before the content becomes inaccessible. It has software
that will adjust to the size of the connection the customer is using.
The major mobile platform for content remains Blackberry and Dobox.tv
estimates that there are perhaps 3 million users who actually make use of
it as a data device. After that, it’s all iPhone or Samsung among
smartphone users. It believes that Nigerians are using a lot of tablets
and these are more Samsung than Apple. In terms of access, Dobox.tv has
desktop apps for Windows and Mac as well as mobile apps for Blackberry,
Android and iOS.
Dobox.tv is available as an app on the MTN platform in Nigeria and
although it is cagy about releasing user numbers, there appear to be
around 50,000 users, 51% of whom are from Nigeria itself.
According to Dobx.tv’s Head, Business Development. Bimbo Koku it will be
the entertainment hub for the growing Nigerian online audience who want to
watch content “on the go” and who love interacting and networking with
friends as they can stream or rent movies read reviews, create and share
music video playlists.”
Source: Smart Monkey TV: http://www.smartmonkeytv.comTags: Cinema of Nigeria, smartphone, blackberry, nigeria, Technology_Internet
[This Day]The Ministry of Communications Technology in partnership with Huawei, a technology solutions provider, on Monday in Lagos flagged off a training programme on Information and Communications Technology (ICT) basic knowledge for 1000 Nigerian female students. The ministry also launched the SmartWoman Nigeria initiative in collaboration with US based social enterprise ChangeCorp and WIMBIZ same day in Lagos. The launch of the gender initiatives was expected to help empower Nigerian women and girls in ICT.
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[Daily Trust]Kaduna -Sixteen-year-old Maryam Nuhu Ibrahim graduated from Zamani College in Kaduna in June this year. Prior to her graduation, she participated in an International Science Competition popularly known as Quanta competition.
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