Imagine being at work and having the electricity go out on a daily basis—sometimes for short periods, sometimes for long. Imagine trying to transport goods across a city or country without a reliable private or postal delivery service. Imagine trying to serve your customers, teach a class or simply keep in touch with those you need to when there isn’t reliable cell service or access to the Internet. And imagine trying to build a workforce for your company when basic access to quality and affordable education, housing and transportation is limited. This is the story of Africa that many of us in the Western world hear on a regular basis—the story of a continent full of problems, in need of a solution.
But then imagine a rapidly growing logistics company in Lagos, Nigeria that is effectively transporting and delivering products to Nigerian citizens thanks to a breakthrough approach that leverages a network of motorbikes and increasing consumer access to mobile apps. Imagine a classroom in rural Kenya that can access the latest digital content both online and offline thanks to a rugged, portable WiFi hotspot device. Imagine making major strides towards stopping the prevalence of counterfeit medicine thanks to a Ghanaian company that makes it easy for consumers to use mobile technology to verify that their prescriptions are safe. And finally, imagine a growing force of world-class coders based in sub-Saharan Africa serving as outsourced talent for some of the globe’s top technology companies while they train for a growing tech economy in places like Kenya, South Africa and Nigeria.
This is the story of Africa that we – my husband, Steve Case, and I, along with members of our executive team at the Case Foundation – experienced as we travelled across the continent this past July to observe the burgeoning entrepreneurial ecosystems in Kenya, Ghana and Nigeria—and it is a story that needs to be shared with the world. Between startup crawls, pitch competitions and intimate roundtables with entrepreneurs, investors and other key players in the ecosystem, we were amazed to observe firsthand the incredible potential for enterprises that represent solutions for not just Africa, but for the world—new companies that are targeting some of the thorniest issues that can play a role in future prosperity of the continent and its people. It was clear, as we observed many times on the trip, that Africa is not a problem to solve, rather, it is an opportunity to seize, thanks to several key trends:
- Entrepreneurs are solving problems not just for the privileged few, but for the many that are all-too-often last to be served through technology and innovation. Beginning with our time in Kenya, we witnessed tremendous promise for building sustainable, scalable businesses that are solving some of the most challenging and intractable problems facing society today. Take for example, BRCK* providing Internet access (and access to important educational content) in some of the hardest to reach areas of East Africa; or M-KOPA democratizing access to light (via solar) for those who need it the most, but often can’t afford it; or Sanergy tackling the dual challenge of access to sanitation and removal of the waste—we met dozens of enterprises that are running at problems affecting the lives of those in the most marginalized communities. And that wasn’t unique to Kenya. In Accra, we spent time touring the facility of Dignity/DTRT (Do the Right Thing) Apparel—an organization that was born out of a joint venture with Salma Salifan, a Ghanaian woman who began a business sewing uniforms out of her home, and a group of investors who saw the potential for building a sustainable apparel and textile company. Formed in late 2013, the company now provides more than 1,500 Ghanaians, many of them lacking even the most basic education, with meaningful employment in its Accra facility. In Accra, we also met Selorm Brantee from the mPedigree Network, which was created in 2009, to improve access to reliable, verified pharmaceuticals for treatment of everything from malaria to cancer. mPedigree is a mobile platform that allows patients and providers to utilize an authentication code to assure that the medicines being sold are verified. And in Lagos, our pitch competition winner was WeCyclers, a start-up that helps low-income communities exchange their recyclable waste for cash and other rewards.
- Women have a visible presence in the startup ecosystem. Here in the U.S. there has been a growing outcry around the lack of diversity amongst high-growth entrepreneurial enterprises, including the significant under-representation of women. So we were thrilled to see a healthy representation of female entrepreneurs and investors at the many tables we sat around, as well as in our pitch competitions. In fact, all three of our pitch competition winners happened to have female founders. This is not to say that the Nairobi, Accra and Lagos ecosystems don’t have more work to do in terms of ensuring more diverse representation at the table—for example, women were notably absent from a gathering of leaders in eCommerce, one of Nigeria’s most promising entrepreneurial sectors. But thanks to women like Yasmin Belo-Osagie of She Leads Africa, an organization focused on giving talented female entrepreneurs access to networks and resources, there is a clear recognition that, as President Obama said in his speech at the Global Entrepreneurship Summit, that Africa cannot complete its growth story without a “full team in play.”
- Homegrown and global talent pools are increasing. As I observed during our time in Kenya, there are a number of talented, highly educated individuals from around the globe who are increasingly recognizing the opportunity to build businesses that positively impact the lives of many and play a role in the growing movement of Africa as an investment opportunity. That goes for African talent too. We met dozens of entrepreneurs who had grown up in Africa, and who then left the continent to further their education at prestigious institutions abroad—often remaining to work at leading global companies like Google, Intel, McKinsey and others. Sensing the opportunity to be a part of a huge sea change in their home countries, they have come back to build businesses and be a part of organizations that are propelling this new story of Africa.
In addition, just as we’ve seen in the U.S., entrepreneurs are hard at work in disrupting the educational system to give people access to new opportunities and improve the pool of talent available to companies in Africa and around the globe. There is Andela*, which is providing training and mentorship to some of Africa’s brightest young people, with the goal of developing a new generation of world-class coding talent for companies around the world. We were inspired by the current class of impressive fellows that we met at Andela’s offices in Lagos, and are excited to hear that the company has opened a new center in Kenya. We also had the opportunity to spend time with innovators who are envisioning a new future for Nigeria’s education system, including: Lekki Peninsula Schools, which is developing a new model for providing high-quality education to low income families; and PrepClass, which is focused on leveraging online platforms to provide personalized learning for students and families.
- The all-important spinoff effect is happening. One of the early indicators of a promising entrepreneurial ecosystem is the spinoff effect—a new generation of companies that are born thanks to the success of a previous company. We have seen this with AOL and the development of the Washington, D.C., ecosystem over time. In Lagos, this has begun to happen in the eCommerce sector thanks to the success of companies like Jumia, the top online retail store in the country.
Another example is ACE (Africa Courier Express) created in 2013 by two former Jumia executives, Ercin Eskin and Tunde Kehinde who saw an opportunity to leverage their experience of pioneering eCommerce in Nigeria to address one of the country’s most vexing challenges—transporting goods from point A to point B. Historically, delivery of consumer goods has been hamstrung by unreliable and inefficient delivery options (including the lack of an official postal service in the country). ACE was created to provide fast, reliable and affordable delivery services, accessible via a mobile app. ACE uses a network largely comprised of motorbikes to deliver goods around Lagos and in four other cities in Nigeria to a customer base that has grown to more than a quarter of a million. ACE plays an important role in eCommerce, providing customers with easy and convenient access to everything from the latest fashion trends, to much-needed pharmaceuticals to home delivery of fast food. With us at ACE that day was the owner of a fast food fried chicken chain who told us that ACE has enabled his business to grow and scale. So not only is ACE providing more convenience and choice for consumers who often can’t get convenient access to desired goods, but it is helping to lift up the entire ecosystem of businesses in the cities where they operate.
No doubt these are the stories that have attracted a growing number of investors to Africa. And thanks to pioneering investors like the Africa Angels Network, EchoVC and others we are beginning to see a real ecosystem emerge where access to capital is becoming somewhat less of a barrier (but still very much a real one).
However, we can’t ignore the fact that there are still tremendous challenges and barriers that could prevent these cities from taking a place among the world’s top ecosystems for entrepreneurs. Cultural norms don’t encourage an environment that accepts and embraces failure—a value that is crucial for entrepreneurs. Local governments don’t yet understand or appreciate the role that young companies play in driving innovation and ultimately creating jobs. And significant investments in infrastructure—from reliable roads to consistent power sources—are needed for companies to thrive. Yet, despite of all of these challenges, and perhaps because of them, entrepreneurs in Africa are building significant new businesses that present huge opportunity for investors around the globe.
On our last night in Nigeria we hosted a large round-table dinner with investors—the first movers of money in a place many still fear. The investors around our table were, for the most part, true believers what the World Economic Forum stated in its 2013 report: “Sub-Saharan Africa continues its transformative journey from a developing continent to a hub of global growth.” We shared highlights of what we had heard in our many days on the ground and in meeting with hundreds of entrepreneurs. We expressed our own intention of expanding our investments in Africa. We then had a wonderful conversation on the hope and the promise of Africa, on the inspiration that entrepreneurs infused us with as we travelled across the continent and on the great need for the world to awaken to the promise of Africa. Just as the conversation reached a crescendo and enthusiasm flowed for the potential in Africa, the lights went out. Yet another power outage. So we closed out our conversation in the dark, reminded that while there is much hope and enthusiasm for much of what we witnessed, the reality is that life on the ground in many of these places is still very hard. But undaunted, these entrepreneurs will continue to run to the problem, to meet the challenges and build brilliant solutions for the future.
Disclosure: The author and her husband have personal investments in Andela and BRCK.
Source: Jean Case, Ventures Africa