Fintechs, SMEs and Digitization in Africa – Ghana leads the charge

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Three leading Ghanaian fintechs; Hubtel, ExpressPay and IT Consortium joined forces to build Ghana government’s portal https://www.ghana.gov.gha digital services and payment platform for Small Medium Enterprises (SMEs), Startups and citizens to access government services at the click of a button. Despite being competitors, these tech ventures saw the need to collaborate as a unified front for the Ghana government to entrust them with the building of a national asset in a revenue sharing arrangement between them and the government, enabling a conducive environment for the delivery of essential government services to consumers and businesses. This represents a constructive case study on the Public Private Partnership (PPP) needed to accelerate the digitization agenda in Africa with Ghana setting the pace. The portal currently processes payments for government services offered by the Passport Office, Ministry of Foreign Affairs & Regional Integration, Lands Commission, Food and Drugs Authority, National Service Secretariat, National Information Technology Authority, Registrar General’s Department, and National Schools Inspectorate Authority. The Ghana.gov platform also serves the digitization and revenue-collection needs of other Ministries, Departments and Agencies (MDAs) and Metropolitan, Municipal and District Assemblies (MMDAs).

As of mid July, 2021, about 624,000 users have logged in to pay for 37 government services, comprising taxes, levies, royalties and stamp duties, directly into Ghana Revenue Authority (GRA) accounts.
Ghana’s Vice President, His Excellency Dr. Mahamudu Bawumia who launched the portal on 14th July 2021, opined that “Transactions will be recorded instantly avoiding any bribery and corruption regarding the quoted service.” According to Dr. Bawumia, “It is estimated that about 10 to 15 percent of revenue is lost through inefficiencies, theft or other accounting schemes. Going digital means, we can improve our revenue collection by an estimated $526 million annually.” Ghana will also derive expense savings of more than $7 million a year from the digitization mechanism, according to government projections. The Minister of Finance, Ken Ofori-Atta has recommended national awards for the three-tech firm at the launch saying, “if I had any power, I am sure the Order of the Volta will be conferred on each of them”.

A digitized government creates an enabling environment for a digitized private sector, research, academia, civil society, and citizens. Ghana, host of the African Continental Free Trade Area (AfCFTA) Secretariat, is leading this charge by awarding the national identification project to an African company, Margins Group. Margin was started in 1990 by Ghanaian entrepreneur, Moses Baiden and has been in the forefront of identity management. IT Consortium one of the innovative home-grown firms that built the Ghana.gov portal and recently celebrated its 20th anniversary, was founded by Ebow Annamuah Mensah and was later joined by Joojo Esua-Mensah, Ato Yawson, Franklin Eleblu and Romeo Bugyei, who is now the CEO. Hubtel, which was founded by Alex Bram, Ernest Apenteng and Leslie Gyimah in 2005 (and were later joined by Kwadwo Seinti as CTO), is a leading Fintech and e-Commerce platform. The company started as SMSGH selling Short Messaging System (SMS) for corporate communication. In 2012, Hubtel was listed by Forbes as one of the leading startups in Africa. That same year, ExpressPay was started by Curtis Vanderpuije, Kodjo Hesse, Kwei Hesse and William Tetteh as an eCommerce marketplace and a payment gateway provider in Ghana.

Last month, Hubtel partnered with MTN Ghana to help accelerate digitization of the informal sector through the provision of digital tools such as a year of free connectivity, access to Hubtel e-commerce smartphone, etc via the MTN Business SME campaign launched under the theme ‘MTN Business, Your Partner for Growth’. This constructive collaboration between South African telecom giant MTN and Hubtel, a leading fintech firm with operations in Kenya and South Africa, is a remarkable example of Africa’s growing intra-Africa trade, collaboration on innovation and digitation of businesses, worth replicating in other African countries. The African Guaranty Fund (AGF) has woken up to the fact that “SMEs are the Coca Cola and Nestle of tomorrow” so they have given lending facilities to Equity Bank and Rawbank to on-lend to the SMEs for their growth and digitization. At a special edition of the MTN Business Executive Breakfast Series, hosted on July 8, 2021 as part of events headlining the company’s 25th anniversary, I made the case that an Africa-wide integration of digital strategies by governments is critical for the Africa Continental Free Trade Area (AfCFTA) to work. Governments do not only need to digitize but they must simultaneously integrate these approaches to ensure interoperability, transparency and inclusivity.

The Bank of Ghana (BoG) through the Ghana Interbank Payments and Settlement Systems (GhIPSS) introduced the Universal Quick Response (QR) Code payment solution last year to simplify merchant payments and reduce the use of cash. The QR Code has been made available to banks and payment service providers, as well as SMEs to enhance business transactions. As an additional step, the BoG has also initiated processes for a pilot central bank digital currency to further move the Ghanaian economy towards a cash-lite environment. According to Dr. Maxwell Opoku-Afari, First Deputy Governor of the Bank, “We anticipate that the Bank’s Central Bank Digital Currency (CBDC) project which would be piloted from this September in a sandbox environment would further advance financial inclusion, promote the efficiency and stability of the payment system, and foster competition in the financial sector.” He continued, “Digital Currency is part of the central bank acknowledging the need for digital payment and digital delivery of financial services, this is formally to get into that space and be able to provide a platform on which we can add more value to digital transactions”. Emphasizing that ” mobile money transactions are not backed by cash and hence limits the value addition,” Dr. Opoku-Afari asserted that the central bank’s digital currency is fiat money, that it is cash on its own so that financial institutions like banks and fintechs will be able to create value addition on the digital cash. He however said “Cryptocurrency is not yet legal in Ghana and not regulated by the central bank. That technology is very laudable, and we have setup a team that is studying it”. Adding that the Central Bank’s approval for the use of the digital currency by Ghanaians will be determined by how successful the piloting of the CBDC goes. Many African economies have expressed their desire to issue electronic versions of their respective national fiat currencies. However, apart from Nigeria, which announced the launching of its digital currency, due to debut on October 1, 2021, in response to Ghana’s , no other African country has taken demonstrable steps toward piloting a CBDC. In essence, Ghana is leading the path for digitization on the continent and until the rest of the continent is digitized and fully integrated, Ghana’s leadership may be in vain – hopefully not.

Are Mobile Operators the next Fintech Startups?

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Africa’s leading Mobile Network Operators (MNOs), MTN, Vodacom and Safaricom, have recently made bold plans to venture into the increasingly dynamic world of fintech. On 23rd June 2021, Safaricom launched its super app, which creates an ecosystem of mini apps from the network operator as well as third party apps that feed off the super app. A month prior to this development, Safaricom, the leading MNO in Kenya announced plans to release an Application Protocol Interface (API) for the super app to enable third-party app developers to build more products and services on top of the super app. This means the super app is going to be an app store that consolidates the reach of Safaricom.

In May, MTN also announced plans to become a tech platform to rival the likes of Apple and WeChat as part of their Ambition 2025 which is currently being implemented. MTN, Africa’s leading telecom operator, is developing its Ayoba messaging platform into a super app that would include its Mobile Money (MoMo) application and video and music streaming services, largely inspired by the international success of WeChat, a powerful multi-purpose messaging, social media and digital wallet app. In April, Vodacom CEO sat down with CNN to discuss plans for building a super app in South Africa in partnership with Alipay. The new service will be integrated with Vodapay to create a financial services super app that will let users pay utility bills, transfer money and get connected with online merchants and suppliers. Although the partnership with Alipay was announced last year during the pandemic to bring the much-needed digital services to consumers under lockdown, it has taken almost a year for them to bring the service to life. This suggests that becoming a fintech startup is easier said than done.

In March, Liquid Telecom with operations in different African countries rebranded to Liquid Intelligent Technologies to show that it is now a one-stop-shop technology group. Very soon, the company would also launch a super app to allow consumers to access all its services through one platform. Although Orange, another MNO with operations in 18 African countries has not announced a super app, the company’s launching of Orange Bank Africa last year, in addition to their already existing Orange Money service, seems to play into the super app narrative. Airtel Africa has also not announced a super app although they had stella performances last year in the MoMo and data business.

Super apps act as a single point of entry for multiple consumer functions. The model emerged in Asia and allows a user to access a range of services — banking, ride-hailing, communication, hiring, trades, people, etc — all from within one app. Back in 2019, Cellulant from Kenya, a leading African fintech firm, also announced plans to launch a super app called Tingg. Super apps are trending not only in Africa. There is a global race to create the next super app that would rival the likes of WeChat, which has a billion users and now estimated to offer more than one million mini programs created by third parties. The other main player is Ant Group’s Alipay, which also has more than one billion users and offers 120,000 mini apps by third parties.

WeChat, owned by Tencent, the most valuable publicly-traded company in China, began making inroads in Africa in 2013 via South Africa’s Nasper, an early strategic investor in WeChat’s parent company. WeChat’s foray into Africa failed, with the company quietly exiting in 2017. Given that WeChat’s partnership with Nasper did not guarantee success, time would tell whether Alipay’s partnership with Vodacom would be successful. In 1994, Naspers, Koos Bekker and other partners launched MTN, which is currently Africa’s largest MNO. Major MNOs are all eager to become nimble fintech startups to compete with the agile young tech ventures, which begs the question, can old dogs learn new tricks? The answer could be yes because the MNOs have led the innovation in MoMo dating back to 2007, when Safaricom ushered in M-Pesa, a pioneering MoMo app into the Kenyan market, leading to a remarkable digital payment and mobile banking revolution across the entire African continent.

Today, all major MNOs have MoMo operations, which has become their new cash cow to the detriment of the banks. In some markets such as East Africa, the MNOs, including Safaricom, are operating “banking services” directly competing with traditional banks. In Nigeria, this has not been the case until the 3rd quarter of 2020, when the Central Bank of Nigeria (CBN) issued final approval to Glo, 9Mobile and Unified Payment subsidiaries to operate as Payment Service Banks (PSBs). In parts of West Africa, the banks, including Fidelity Ghana and Ecobank Ghana, managed to lobby the regulators to “force” the MNOs to work with them to deliver those banking type services. Back in East Africa, the question has been asked, “Is M-PESA transforming into a bank” with the launch of its super app? This question has led regulators and public policy makers in some countries to require the MNOs to separate their MoMo operations (classified as fintech) from their mainstream voice business. In some markets, the companies are also required to make some ownership of their fintech ventures available to the public through listing on the local stock exchange, just as they are mandated to list their voice businesses. In Kenya, there is a bill before parliament requiring the separation of M-PESA from Safaricom as a standalone fintech business.

The MoMo operations of the MNOs made the most significant returns under the pandemic because majority of transactions were done through their networks. Nigeria recorded $428B worth of e-transactions in 2020, 42% higher than in 2019. In Ghana, MoMo transactions outstripped cheques by $40B in the first quarter of 2021. This sent shock waves to the Ghanaian banking sector such that the banks are now forging collaborations as they fear for their future. In other news, Ghana is edging towards a state-backed digital currency to mitigate against the volatility of unregulated digital currencies, such as bitcoin (BTC). The value of M-Pesa transactions in Kenya grew by 32.9% year-on-year to $82B in 2020, whilst the volume of M-Pesa transactions grew by 14.9%, to 5.12 billion transactions. Orange’s MoMo service also saw an 18.9% increase in active users to total 19.6M customers by the end of June 2020. In Kenya, MoMo payment rate represents 87% of the country’s GDP; in Ghana the figure is 82%. These are the highest ratios in the world after China where mobile transfers represent 125% of GDP (this includes person-to-person transactions not included in GDP calculations).

On the contrary, South Africa where Vodacom and MTN reside, have not seen that much success with mobile money mainly because that country has a solidly entrenched banking system, with 70% of adults having a transaction account. Earlier attempts by both operators to introduce MoMo in South Africa failed but in February 2020, MTN relaunched its MoMo service with UBank and in December 2020, with the mobile telecom giant claiming 2 million new customers. Vodacom’s new Alipay app is their second attempt to carve out a fintech niche in South Africa, whilst Discovery Bank and Tyme Bank have launched exclusive digital offerings without the telcos. Things are clearly playing out quite differently in Southern Africa. Given that the MNOs are in a fist fight with the banks with regards to fintech, would the banks also seek to become innovative mobile startups now that the MNOs are becoming fintech startups?

Big Tech in African Fintech

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I ended my May 2021 essay with the hypothesis “…leading fintechs might turn around and start acquiring the banks” and, sure enough, on the 12th of May 2021, the Competition Authority of Kenya in a gazette notice approved the acquisition of 84.89% stake in Century Microfinance Bank by Branch International Limited – a leading global fintech with operations in Kenya. One of the signs of a maturing ecosystem is home grown ventures mature into unicorns, gazelles and zebras, increased mergers and acquisitions and the entry of global tech giants hungry for a piece of the action – the subject of this essay and the final in this series to end the second quarter.

Whilst the Branch acquisition was unexpected, it was unsurprising when Twitter announced on 14th April 2021 that they are setting up their Africa HQ in Ghana. On the very same day Amazon announced an investment of $280M in their new 70,000 square meter office complex in Cape Town as their African HQ. Even though Amazon has been in SA since Amazon Web Services (AWS) first established its presence in Cape Town in 2004 and later opened a Joburg office in 2015, this is the biggest investment in an African HQ by a tech company. They subsequently partnered with the South African Post Office (SAPO) to establish the Amazon model in Africa. In February 2021, global music streaming giant Spotify announced, it is now available in more than 80 emerging markets including Ghana, Kenya, Nigeria, Tanzania and Uganda. Even though Facebook has had an office in SA since 2015, Mark Zuckerberg’s visit to Nigeria in 2016 led to the opening of their second Africa office in Lagos in 2021. Amidst the pandemic last year came the big news, Stripe acquired 100% of Paystack a leading African Fintech – this was the strongest signal that big tech in coming into African Fintech. This is because the African fintech sector is heating up and big tech does not want to be left out.

In some ways, these could actually be seen as late comers to the party because even though some have been around much longer, in 2007, Google setup it first African office in Kenya hiring now Minister of ICT, Joe Mucheru to lead the charge even though it had some sales guys in SA dating back to 2006. Google has since built an extensive presence in Africa. Microsoft has also had presence in South Africa dating three decades back but in 2013, it launched its Microsoft4Afrika initiative in Kenya to start investing in start-ups, SMEs, partners and youth.

In 2019, Microsoft launched a $100M initiative to establish development centers over the next five years starting with Kenya and Nigeria and recently announced the establishment of two data centers to bring services closer to its users. That puts Microsoft in the forefront of initiatives aimed at the African tech ecosystem. In 2013, the International Business Machines (IBM) Corporation also opened a $100M research facility in Kenya followed by Oracle making its first Africa acquisition of Nimbula, a provider of private cloud infrastructure management software which was how Oracle entered the cloud business. In the same year, Chinese tech giant, Tencent, opened an Africa office in South Africa through Naspers (their shareholder) to operate WeChat Africa to somewhat unsuccessfully compete with WhatsApp. Tencent is now primarily responsible for the operations of the JOOX music entertainment app. Back in 2001, Naspers made a $34M investment in China’s Tencent Holdings for 33.3% which is now valued at more than $175B so Tencent could afford to have an Africa office. In May 2021, Dutch listed technology investor Prosus NV increased its stake in Naspers to nearly 50% in a share swap deal that will move part of their holdings in China’s Tencent to Amsterdam.

Even though Alibaba, another Chinese Internet giant does not yet have a formal Africa operation, it’s founder Jack Ma has made periodic visits to Africa since 2017 suggesting that they may setup an office soon especially since he stepped down to focus on philanthropic activities on the continent. The latest evidence of this is their partnership with Flutterwave. In 2019, Chinese owned Opera browser, launched Opay into the Nigerian market to make its debut into Africa with a $50M investment. Opay is now raising $400M at a $1.5B valuation – joining the unicorn club. In 2008, another Chinese tech manufacturer, Transsion opened offices in Nigeria and later other countries for the African market with a focus on low-cost phone brands like Tecno, Itel, Infinix, etc some of which it now manufactures in Ethiopia. It has recently setup Transsnet in a joint venture to focus on creating an application layer on top of their smart phones – for example, Boomplay for music and Palmpay for payments.

Finally, we have also seen the trend of the CEOs of some of these big tech companies visiting the continent to ascertain things for themselves. So far about eight of them have made multiple trips including then Google Chairman Eric Schmidt’s visit in 2013 to Kenya following which he wrote a detailed observation. With this much attention on Africa as the current nexus of global tech innovation, is it possible that some of the new Special Purpose Acquisition Companies (SPACs) that have raised soo much capital through the public markets (such as Tidjane Thiam’s Freedom Acquisition I Corporation) would also start looking at acquisition targets in Africa? especially when leading fintechs like Flutterwave have made it known that they want to go public.

Mergers and Acquisitions in African Fintech

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On 1st of April, as I was publishing my Uniconization of African Fintech piece, Mastercard was busy announcing their $100 million investment into Airtel Money (Airtel Africa’s mobile money subsidiary) to acquire a minority position – half what TPG Capital. Even though I had gotten wind of the transaction knowing that Mastercard was already in bed with Airtel Money – some part of me thought of it as an April fools joke…:-). On the 12th of April 2021, Mobile Telecom Network (MTN) announced the valuation of their mobile money business at $5 billion making it the 7th African fintech unicorn with plans to bring in minority shareholders before going public. Given that Visa is already in bed with MPESA (Vodacom and Safaricom’s mobile money business), it is a matter of time before Visa also invests. The unicornization of African fintech is the first trend but the second, topic of today, are the mergers and acquisitions in the sector.

Mergers and acquisitions are slowly taking shape in the African fintech sector but, unlike the uniconization, they are manifesting on two interrelated tracks that may or may not eventually converge. The first track is maturing fintechs are acquiring smaller and earlier stage ones to grow their market share and establish territorial presence as Andrew Takyi-Appiah, CEO of Zeepay, told me. On the 28th of April 2021, two headlines made the news; AZA bought Exchange4Free whiles Ajua acquired Wayawaya. Zeepay had earlier acquired Zambia’s Mangwee Mobile Money and MSF Africa had acquired Beyonic last year. In 2018, Emergent Technology acquired Interpay Africa in Ghana and back in 2016, Interswitch acquired Vanso – the infographic below gives you more details.

The second interrelated and accelerating track that has the African banks at the center of it. Some of the big banks in Africa have realized that if they are not careful, African fintechs would take over what used to be the domain of banking. This has led some of them to establish ways to gain visibility into the market so that they can make snap acquisitions and strategic investments to protect their interests. The first evidence of that came through on the 24th of March 2021 when First National Bank (FNB), South Africa’s most innovative bank acquired 100% of local fintech firm Selpal to gain access to their community and township based “mom and pop” businesses.

FNB Commercial, together with Edge Growth, manage the Vumela Enterprise Development Fund with other South African banks following whiles the phenomenon is slowly crawling up to Eastern and West African banks. Standard Bank setup a corporate venturing arm and also backed Founders Factory to cultivate ventures for them to invest in. Nedbank has a VC team that has made eight investments so far. Amalgamated Banks of South Africa (ABSA) made their first investment in 2019 followed by the second one in 2020. Rand Merchant Bank (RMB) has their own accelerator, Alphacode that is incubating startups. Ecobank Group has their fintech challenge which annually selects startups that have strategic fit for integration. Equity Group which owns Equity Bank has also launched the Equity Investment Bank (EIB) to back early-stage funds that would back startups. A totally different approach but with the same ramifications.

Then we have those banks that seem to be late to the party or have still not come to terms with the changing landscape and continue to lobby regulators not to allow fintechs into their space. That came to a head on last month in Nigeria when the lenders kicked MTN Mobile Money (MoMo) off their shared platform because MTN MoMo halved it commission charged on the banking channels to 2.5%. The regulator had to intervene to restore MTN MoMo to the platform and reinstated the commission to 4.5% for the purchase of airtime via the banks. Whilst this may look trivial; it is really about the banks that are not on the fintech wagon realizing that fintechs are putting their business and margins at a significant risk. For example, in Ghana, MTN MoMo has about 15 million active accounts whilst all the 23 banks collectively have about 5 million bank accounts – that is a 3:1 ratio.

In Nigeria, the Central Bank is yet to approve payment-service licenses to MTN Nigeria and Airtel Africa after two years of them putting in their application which would allow them to provide most banking functions except lending and taking foreign-currency deposits. Whiles that seems to be a showstopper, Nigeria’s recent open banking regulations have forced the banks to share their data with the fintechs. This levels the playing field to some degree but begs the question whether the banks would change their strategy and start looking to acquire the fintechs or whether the fintechs like Flutterwave, Interswitch, Fawry, Airtel Money, MTN MoMo or MPESA which are all worth more than a billion dollars might turn around and start acquiring the banks. Whichever way it goes, M&A is going to characterize the African fintech space as the second major trend after unicornization for the foreseeable future.

The Unicornization of African Fintech

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The first quarter of 2021 ended on a great note as two African fintech businesses gained unicorn status, a rare fit amidst a raging global pandemic which is finally being aggressively tackled by the speedy supply of much-needed vaccines. Such is the African story – a trail of surprises in the midst of uncertainty. On 18th March 2021, Airtel Africa announced it had received a $200M investment from TPG’s Rise Fund at a valuation of $2.65B making it the latest African unicorn. Exactly a week before, March 10th, 2021, Flutterwave from Nigeria also announced a $170M investment from Avenir Growth Capital, Tiger Global Management and others at a billion-dollar valuation. In the tech world hitting a billion-dollar valuation is a big deal – you earn the name Unicorn, a mythical animal that represents the statistical rarity of successful ventures coined in 2013 by Aileen Lee of Cowboy Ventures. Most global technology companies strive for unicorn status preferably before they go public. As of March 2021, there are about 614 unicorns globally with a total valuation of $20041B according to CB Insights. Given that the Africa tech ecosystem is maturing we are now seeing the manifestation of this mythical animal which is the subject of this essay to start the second quarter of a defining year.

These developments brought into sharp focus the uniconization of African fintech, ignited the debate whether unicornization abroad is the way to go for African tech ventures or whether according to Marieme Diop of the Dakar Network Angels, the focus should be on Gazelles (i.e. companies valued at $100M with $15M to $50M in revenues listed on the local stock exchanges) to boost the African market and create liquidity at home? There is yet a third animal in the African kingdom introduced by Keet van Zyl of Knife Capital who argues that Zebras are less spotted profitable sustainable businesses that have an impact stripe – they solve really meaningful problems. In my view we are going to have the manifestation of all three and even more as different entrepreneurs and investors pursue different approaches. After all Africa is large enough to accommodate many unicorns, gazelles, zebras, etc. What is important to all businesses is the need to build strong unit economics at the foundation as Reid Hoffman’s blitzscaling is now giving way to Tim O’Reilly argument. More importantly the recent crush of WeWork has everyone going back to the fundamentals – positive unit economics. This is more so apparent in the African context given the dynamics and challenges of operating in our markets, which led to the construct of the zebra and gazelle. Not so long ago the unicorn was a sought-after mythical construct in the African context, which has now been found.

With the addition of Airtel Money and Flutterwave, Africa now has six fintech unicorns making fintech the leading sector in Africa’s digital economy. The other four are Fawry, a local Egyptian payment company that listed on the Egyptian Stock Exchange in 2019, that started as a gazelle and became a unicorn last year at the height of the pandemic. This is a strong case study that highlights a firm’s ability to start as a gazelle (or zebra) and become a unicorn. Unicornization through acquisitions was successfully demonstrated by Vodacom and Safaricom that completed the acquisition of MPESA, which has more than 41.5M customers across Kenya, Tanzania, Lesotho, Democratic Republic of Congo, Ghana, Mozambique and Egypt processing more than $12B in transactions, from Vodafone last year during the pandemic. Interswitch also gained unicorn status with the $200M investment from Visa that valued the firm at a billion dollars. Finally, there is the debatable “Africa unicorn”, Jumia (an e-Commerce company which could fall in the fintech category) who debuted on the New York Stock Exchange (NYSE) in the second quarter of 2019 but has since been in and out of unicorn status. It is no surprise that the unicornization of the African continent started with fintech enterprises since every economy thrives on payment for goods and services and the innovation in Mobile Money (MoMo) changed the dynamic in Africa significantly. In the past, commercial banks have struggled to introduce electronic payment systems like debit and credit cards, however MoMo from the Mobile Network Operators (MNOs) came from nowhere as a surprise in Kenya. During the 2007/8 election violence in the country, MoMo suddenly became the only efficient means to make payments and MPESA (M for “Mobile” and “PESA” for Money in Swahili), the Safaricom brand took off. It has since been replicated by many MNOs and successful global fintech startups such as Stripe. The global GSMA 2021 MoMo report has Africa leading in growth.

Airtel Africa’s variant is Airtel Mobile Commerce BV (“AMC BV”), a wholly owned subsidiary of Airtel Africa Plc which trades as Airtel Money – the entity into which the TPG Rise Fund invested. Airtel Africa (originally Celtel which was acquired by Zain and then sold to Bharti Airtel of India) brought in Chidi Okpala from United Bank for Africa (UBA) in 2012 to join Airtel as the founding CEO of Airtel Money. Chidi was the right man for the job, having spent twelve years at UBA and Accenture with extensive knowledge and hands-on experience. This was a brave move which panned out well, resulting in a roll out across 17 countries. At the time of Chidi’s departure from Airtel Money in December 2015, he had set the business on the right footing, with 30M customers and $2B in monthly transactions. Today, Airtel Money is a unicorn and according to Chidi “I am delighted with the exceptional foundational work myself and team did back then, and the current phenomenal work being done by the current team.” Chidi has since gone on to launched Asante Financial Services, which he hopes to make a unicorn by 2025. He reckons that his Airtel Money experience prepared him for the Asante journey giving him the first taste of entrepreneurship albeit within a larger corporate.

Olugbenga Agboola (aka “GB”), Co-Founder and CEO of the second unicorn, Flutterwave, had a similar career path. He started as an Applications Engineer at Paypal (under the Paypal Mafia..;-) with a brief stint at Google Wallet Product Management then moved into the banking sector in Nigeria where he held positions with GT Bank, Standard Bank and then at Access Bank as their head of digital factory and innovations. While at Access Bank he saw the fragmentation in payments across Africa and together with his co-founder, Iyinoluwa Aboyeji (aka “E”) who had then exited his first startup, Andela, joined forces to start Flutterwave. It is important to know that while GB had come from a corporate executive background, joining forces with E who came from a pure entrepreneurial background was a perfect fit. E started as the founding CEO and later handed the reigns over to GB in October 2018 who, in turn, has done a great job of taking the company to unicorn status within three years. According to GB “Covid-19 played a big part in our growth because we were able to quickly onboard more customers”. He reckoned that “people who might not have said yes to online payments have now said yes because of the pandemic.” This confirms my earlier claim in a previous essay that the pandemic is speeding up the digitalization of the economy in Africa. Chidi and GB are both corporate executives who turned into entrepreneurs and from my previous essay they come with unique strengths which in the case of Flutterwave combining with E’s straight up entrepreneurial genes may be partly the reason they got to unicorn status faster .

However, in his excellent oped, Dr. Israel Ovirih a Lagos-based investment banker, serial entrepreneur and tech-evangelist outlines the critical ingredients for getting to unicorn status.
1. How big is the problem, or the pain and how serious is it? What are the products, services and derivatives created by the startup to alleviate or eradicate the pain? Are they being properly product-ized? Or service-tized? Is it being done in a creative and innovative manner?
2. The GRIT in the founding team and leadership, which dovetails into measuring their unflinching commitment, smartness and, if you like, the do-or-die optimism which drives the dream and its execution.
3. The amount of traction they have gained and how clear their roadmap is, in the face of the various contradictions in the local legislation or policy.
4. The present financial health of such startups and how healthy they are capable of becoming, considering their Value Proposition and Execution Story to date.
5. Finally, the strength of the market; local, regional, continental and indeed global.

The last point has a strong bearing on whether a company can become a unicorn, gazelle or remain a zebra as the market which some call the “Hand of God” is the ultimate determinant.

African Corporate Executives turn to Tech Entrepreneurship: Part 2

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Three significant news items went on the global wire on 25th February 2021 as follows;
1. Liquid Telecom, a member of the Econet Group that has laid more than 70,000km of fiber optic cable across Africa, raised $840M financing package (US$620M bond and a US$220M equivalent term loan in Rand). This was Liquid Telecom’s second bond issue and it was 5.5 times oversubscribed with JP Morgan Chase & Co, Standard Chartered Plc and Standard Bank Group Ltd as joint global bookrunners.
2. Convergence Partners, a leading Pan African Private Equity fund entered into an agreement with Nasdaq listed Inseego (INSG) to acquire 100% of their subsidiary Ctrack’s operations in Africa and the Middle East.
3. Ecobank Nigeria, the largest country operations of Ecobank Transnational Incorporated (ETI), issued a London listed $300M bond that was 3 times oversubscribed and drew significant international interest with Citibank, Mashreq, Renaissance Capital and Standard Chartered Bank as joint lead managers and bookrunners.

These stories are significant because these companies are owned by a vanguard of African corporate executives turned entrepreneurs who have built their respective ventures into global success stories such that these news items are first in their class (Liquid Telecom is majority owned by Strive Masiyiwa from Zimbabwe, the shares of Convergence Partners is controlled by South African Andile Ngcaba, ETI was co-founded by Gervais Djondo from Togo and Adeyemi Lawson from Nigeria and built as the first indigenous Pan-African bank by Nigeria’s Arnold Ekpe). Gervais, Adeyemi, Andile, Strive and Arnold worked in government and corporate Africa at the highest level before becoming leading lights for the new generation of top-performing African entrepreneurs. Accordingly, in this concluding segment to end the first quarter of 2021, I present the stories of Ghana’s Marcia Ashong, Kenya’s Aziz Omar and Ivory Coast’s Alexandre N’Dore highlighting their unique strengths at the end.

As Adesuwa Okonbo Rhodes advocates for more tables in this quote “I believe the way to effectively provide women with more seats at the table is for us to create our own tables. More women succeeding as capital allocators means more women getting funded, more mentors, more torchbearers, more examples to follow. We don’t need more seats, we need more tables!” which ended part one of this essay, Marcia Ashong, CEO of TheBoardroom Africa, has being getting more women at the tables in corporate boardrooms since launching her venture in January 2016 in Ghana. Prior to this Marcia was in Ivory Coast heading the country operations for a major oil service company with responsibility for over 100 employees and contractors. According to Marcia, leadership ladders are shaped like pyramids: women are well-represented at the bottom, and yet, based on her experience, as one ascends women become more scarce and, for her, it was obvious that the problem started with the structure of corporate boards. There is a strong link between the diversity of a board and the collective intelligence that leads to improved decision-making and better governed entities” Marcia said. Women bring openness to new perspectives, collaboration, inclusiveness, strength in ethics and fairness and, as such, the lack of women in the corporate boards has tremendous implications on governance standards and business performance. They have placed more than 37 women on boards of which 25% are first timers and graduated over 100 women in their governance programme.

Aziz Omar started in the international NGO world then moved to government earlier in his career. Aziz’s day of reckoning came in early 2011 when he faced the loss of an employment opportunity in the Kenyan government because his appointment letter was stuck in the post office and by the time, he got it, the job was already offered to someone else. That led him to co-found and build the world’s first mobile postal office known as MPost. Aziz and his team have grown MPost to a stage where his co-founder has taken over the management of the operations. In the middle of the pandemic (January 2021) Aziz launched his second venture SaveApp – a platform that allows one to roundup their spare change and save it. Clients can later redeem those savings via instant gratification options like promotional vouchers or convert them into retirement savings through direct pension contributions. Launching a new venture in a pandemic speaks to the enormous experience and grit that Aziz had gained from his previous ventures. According to him “We believe as a company that our solution targeting SMEs and Africa’s grow youth in regard to micro-pensions and savings seeks to guarantee Africa’s socio-economic development and the move to a more digital future”.



Alexandre N’djore started his corporate career at MTN Cote D’Ivoire as Logistics Manager, was there for almost three years and then moved to Millicom which owns the Tigo mobile brand. At Millicom he rose through the ranks and became head of digital operations in Tanzania. Tigo Kilimo, a platform he had built for farmers got one of them almost in tears because the poor farmer had been able to multiple his income threefold through the platform. He then built Tigo Bima which went viral, quickly accumulating over 562,000 users in just 18 months with zero budget for advertising. Realizing that he could do this on his own, Alex left Tigo to start Digitech, an insuretech platform in January 2016 that allows the purchasing and processing of insurance digitally. The company which offices in Seychelles and South Africa has leading insurance and reinsurance companies such as Sanlam who have sold more than 10,000 policies and CICA-RE who have processed 7M policies for 200 companies from 14 countries worth 55MUSD on their platform.

The journey from the corporate world to entrepreneurship, as outlined in the aforementioned case studies, comes with three distinct advantages;

1. Experience – Corporate exposure gives former executives tremendous business experience, enabling them to avoid costly mistakes. They would have also learnt the ropes of business using the corporate cheque book, so those expertise and experiences give them a competitive advantage in the entrepreneurship arena. That experience may also compromise or retard their business ability to think outside the box and take potential game-changing risks, so it is a two-edged sword.
2. Savings – Most of them have savings from their previous corporate salaries, which often serve as handy and helpful temporary cushion in the rocky startup universe. and finally
3. Networks – Middle and top-tier corporate life facilitates the building of extensive business networks, which are indispensable in building and growing a successful business venture.

African Corporate Executives turn to Tech Entrepreneurship

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In the last century, the fashionable and accepted route to success for young Africans was to complete their education and join the corporate world. A few university students aspired to become entrepreneurs; most educational institutions did not offer entrepreneurial programs. With few exceptions, African families used to guide their children to join a leading multi-national or work for a state institution, hoping they would climb the corporate ladder to become CEOs or at least senior management. That was prestigious until the paradigm shifted to tech entrepreneurship with the emergence of the computer, mobile and Internet industry in the latter part of the 20th century. Whilst a lot of African families have built successful entrepreneurial ventures in the past, this essay emphasis the growing move of corporates to tech entrepreneurship.

The likes of Dr. Nii Narku Quaynor who started Network Computer Systems (NCS) in 1988 and played a key role in establishing the Internet in 1994, Ayisi Makatiani who launched AfricaOnline in 1994, Miko Rwayitare who started Telecel in 1986, Strive Masiyiwa, who started Econet in 1993, Mo Ibrahim, who built Celtel in 1994 and sold it for $3.4B in 2005, Irene Charnley who led the expansion of MTN into the rest of Africa and the world, making it a leading global telecom player whose current market capitalization is $4.8B and others deserve credit for breaking the mold and igniting a paradigm shift. Their transition from government and corporate life to building some of these leading African businesses served as a beckon of light to be followed in the 21st century. As mobile and connectivity became pervasive in Africa, a new generation of entrepreneurs – digital natives and digital immigrants — started creating digital innovations. Some of these digital immigrants are African corporate executives who are transitioning to entrepreneurship later in their career. In this two-part essay, I analyze the transitional path of some of these executives-turned-entrepreneurs highlighting their current innovative ventures that are changing the face of Africa. Starting with Ted and Adesuwa.

Ted Koka started his corporate life at CNBC & Forbes Africa as a sales lead in South Africa. He grew into business development and what followed was an exciting journey as the head of content distribution and sponsorship at Viacom International Media Networks. Managing distribution for a portfolio of amazing global brands; including MTV, MTV Base, Comedy Central, BET, Nickelodeon, Nick Jr and Nick Toons gave him the edge he would need to succeed in his next venture. According to Ted “When I felt my time in the corporate world had matured, it was time to venture out to build my vision.” In the last quarter of 2019, Ted took the plunge and launched Epic Contests a social contest platform that designs and aggregates the world’s most amazing experiences to give users the opportunity to win them and create social good. Koka’s move from the traditional corporate world to engaging with social good highlights the global change in corporate ethos. Epic Contests is premised on the fact that there is a cost and accessibility barrier between people and their most coveted bucket list experiences. Their experiences are categorized into Music & Lifestyle, Sports & Fitness, Travel & Adventure as well as Kids and Family – this makes them the “Netflix of experiences”.

In a post COVID-19 world, the $8.2T global tourism market accounting for 10% of global jobs and GDP had to adapt or die. This is where Ted’s corporate experience came in handy. He was able to lead his team to pivot their business by creating a new product called Digital Formats. This vertical positioned them to disrupt the $3.1B TV formats industry. By digitizing the formats ecosystem (X-Factor, Idols, Got Talent, etc.) they created a scalable, digital environment for participants across the world to compete in digital formats that could change their lives forever. It means an aspiring musician, DJ or dancer in Johannesburg, Lagos or Accra can compete head to head against a counterpart in New York, London or Sao Paulo in a contest without being subjected to geographical or production restrictions. This capability provides significant cost savings and flexibility to an industry battling to monetize cost-intensive TV formats. Epic Contests is a new way to engage and reward consumers – their latest World of Wonder experience is the ultimate bucket list giveaway. The opportunity to win a Ferrari California and a trip for two to Milan in a post COVID-19 world.

Having spent the last 12 years in investment banking and private equity at firms such as J.P. Morgan, TLG Capital & Syntaxis Capital Africa, Adesuwa Okunbo Rhodes launched Aruwa Capital Management with her own money in Nigeria in 2019, after leaving the comforts of a six-figure salary. In order to make an impact in society with her skills and track record – her focus is to change the narrative for women and small businesses in Africa. Aruwa Capital is one of the few African women-founded and led growth equity gender lens funds in Africa. Adesuwa had struggled at her previous fund to raise capital from institutional investors haven been on the fundraising trail for four-and-half years as the Managing Partner. She adds, “I wanted to make sure that through launching my own fund, I would be able to provide female entrepreneurs with access to capital where they otherwise traditionally wouldn’t have access due to the structural barriers that exist for any woman raising capital let alone women and people of colour”. Adesuwa also wanted to change the narrative for other female fund managers who may have struggled to raise capital despite their track record. Aruwa as a success story would motivate and inspire them.

Aruwa Capital Management was founded on the conviction that the gender imbalance amongst capital allocators on the continent, provides a unique opportunity to invest in untapped segments of the economy whilst closing gender economic gaps across society whiles generating enhanced returns. When women are empowered as capital allocators, there is a natural trickle down to women entrepreneurs. When women with agency have access to capital, society is the better off for it. Aruwa Capital is currently investing from its inaugural $20M fund, focused on Nigeria and Ghana with a successful first investment in a local manufacturer of personal hygiene goods for women, girls and babies.

I would end this first part with a quote from Adesuwa; “I believe the way to effectively provide women with more seats at the table is for us to create our own tables. More women succeeding as capital allocators means more women getting funded, more mentors, more torch-bearers, more examples to follow. We don’t need more seats, we need more tables!

Scaling Africa’s tech ventures to exit this decade

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The last decade was an important experiment in Africa tech ventures moving out of the “labs” and becoming real businesses that saw investors backing them with so much capital that from 2014 to 2019, the total number of VC deals doubled every year until the advent of COVID-19, which disrupted global economic activities in 2020. However, 2020 saw some notable exits including World Remit’s acquisition of Sendwave for $500M, Network International buying DPO for $288M and Stripe taking over Paystack for $200M to enter the African market as Egypt’s Fawry gain unicorn status. The IPO of Fawry the third Africa tech venture reach market capitalization of over $1 billion after Jumia and Interswitch was oversubscribed 30 times. 2020 ended with another notable exit, with two initial shareholders in Ghanaian fintech startup, Zeepay, exiting from an initial investment of about USD24,000 in 2015 for USD940,000 on December 21st, 2020 – a remarkable 3,800% return on investment (ROI) in 5 years. This suggests that the risk profile of emerging tech ventures in Africa may be high but the returns could be outrageously rewarding. Case Study II: the early investors in Nigeria’s IrokoTV who invested $80,000 for 10% stake over 5 years realized an ROI of 3000% after selling the same stake (secondary shares) for $2.4 million. Case Study III: The angels who invested in the seed round of Paystack back in 2016 made ~1,440% ROI. That is 14.4x their money in 5 years.

In their essay “The Chicken or the Exit? Venture Capital Has an Unlikely Progenitor”, Osarumen Osamuyi and Derin Adebayo concluded that the Africa tech industry is at best in the early stages of the “Scaling” phase after a decade of being in the “Experimentation” phase before it gets to the “Liquidity” phase. Osarumen and Derin are both right and wrong – they are right about the staging, but they ignored in their analysis the exists that have happened at the experimentation phase as illustrated in their chart below. Whiles these exits may not be big, and many are far and between each other, they tell us a constructive story of an ecosystem that has outliers or the propensity to produce pockets of excellence despite the considerable financial and environmental challenges. One cannot ignore such exceptionalism in characterizing the ecosystem because they tell a certain aspect of the story that is important in the bigger scheme of things. In this case they tell us that even though the industry is still in experimentation with all its handicaps – it is able to produce outstanding profitable businesses. Those outliers defy the order of natural progression and set the course for others to follow. That course then generated ripples that came due in 2019 and 2020, where we saw some notable exits and unicorns at the end of the experimentation phase even in the midst of COVID-19. In some ways the pandemic catalyzed this development as I noted in one of my essays. One of the positive effects of the pandemic is the growth in digital transactions, for example Nigeria recorded $428 billion of transactions in 2020 – 42% higher than in 2019. On January 8, 2020, Gro Intelligence, a Kenyan digital venture focused on agriculture and climate data distribution globally closed an $85M series B round to scale – the biggest of such round to be raised in Africa to start 2021.

These positive developments beg the question: “What would the Scaling phase look like in African tech, given that it has some differentiated characteristics from others?”. In my view there are three significant developments in Africa over the last ten years that are coming due this decade that to scale up the tech ecosystem towards exists before 2030.

The three mega trends are;
1. Population growth characterized by a demographic dividend.
Africa’s population of 1.3 billion is projected to increase by 50% in the next two decades according to the United Nations. By 2090 Africa would overtake aging and slow-growing Asia in population growth. Africa’s increasingly youthful and tech savvy population, 60% of whom are under 25 years, are adopting development of mobile technology applications to address social problems in their communities – building the current generation of global technology companies. Over the last decade African entrepreneurs have being experimenting with these technologies in the “labs” and some are good enough to attract the investments and grow to become global success stories.

2. Emerging middle class with an appetite for consuming technology.
According to the Africa Development Bank, Africa’s middle class will grow to 1.1 billion and account for 42% of the predicted population. This means Africans living below the poverty line will be in the minority at 33%. The middle class is estimated to be spending between $2.2 and $20 a day. They are known for consuming technology applications and services so as the young entrepreneurs develop the relevant applications to solve their daily challenges, they would have the disposable income to afford these applications and services.

3. The common market launched at the beginning of 2021 as the biggest economic block on the planet.
On the 1st of January 2021, the African Continental Free Trade Area (AfCFTA) began trading, bringing together 1.3 billion people in a $3.4 trillion market – the most significant development to open the decade after a long delay. As Africa’s population expands at a rapid rate – from a youthful workforce of 617 million in 2014 to 1.6 billion in 2060 – so would the value of the common market, creating massive opportunities for entrepreneurs building the continent’s amazing tech ventures, amidst an increasingly wealthy consumer and middle class.

These three mega trends are going to produce tectonic shifts in Africa this decades and the tech innovation industry is going to be the leading beneficiary. Africa’s tech industry is going to experience multiple exits at the Scaling phase so the Liquidity phase would be happening simultaneously. This is how we are going to be scaling Africa tech ventures to exit this decade.

Africa is already connected NOT by Facebook and Google

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In the midst of the pandemic, Facebook (and partners) announced 2Africa a new subsea cable. About the same time last year, Google also announced a subsea cable called Equaino. It looks like they are trying to save Africa, but this is the problem – we have way too much capacity on the beach and not enough inland to connect to the wireless and cellphone networks to drive broadband to the masses. What Africa NEEDS today is terrestrial fiber to drive the existing subsea cable capacity inland to improve the broadband capacity of the wireless and cellphone networks. The diagrams below by Steve Song under the auspices of Many Possibilities gives you a historical account of Africa been connected to the world by subsea cables since 2001 through SAT3 – a consortium of majority Africa owned telecom operators. As per the second diagram Google and Facebook are building the 19th and 20th cables which would be live in Q4 2021 and Q4 2023 respectively. Hence Facebook and Google cannot be connecting Africa to the world in 2020 – at best their two new cables could serve as redundancy to the existing ones as well as provide capacity in the future.

In 2001, SAT3 and all other subsea cables were built through a club consortium which meant if you did not belong to the club you could not play. The club consortiums then set a high price tag for their fiber because they had a monopoly in the markets. In 2004 I started a movement under the auspices of the Ghana Internet Service Providers Association (GISPA) and Africa Internet Service Providers Association (AfrISPA) both of which I co-founded to dismantle these consortiums and monopolies with the intent to drive down the price of connectivity to make broadband more accessible and affordable. Our first victory was in November 2004 when GISPA signed an agreement with Ghana Telecom to reduce the cost of SAT3 by 1/3. GISPA then led the establishment of the Ghana Internet eXchange (GIX) to keep local Internet traffic in Ghana. AfrISPA members followed the GISPA lead and started negotiating for cheaper prices as well as building their local internet exchanges to keep Internet traffic within their countries.

In 2005, Russell Southwood, Anders Comstedt and I wrote “Open Access Models: Options for Improving backbone access in developing countries” for the WorldBank in which we presented an alternative approach to club consortiums and monopolies for the development of fiber networks. I followed this up in 2006 by writing one of two missives that made the case for “Open Access” communications infrastructure in Africa. Come 2007 I got invited by Dr. Bitange Ndemo to join the founding team that launch The East Africa Marine System (TEAMS) based on the open access model we had developed – a first in East Africa with Kenya as the nexus. 2009 saw the arrivals of the TEAMS and SEACOM cables which had Convergence Partners as one of it’s investors led by Andile Ngcaba who also led the launch of Africa’s first Dawn Satellite – by 2013 ten more subsea cables went live. According to Paul Hamilton of African Bandwidth Maps, Africa’s total subsea design capacity at 2018 was 226.461 Tbps with the sold international bandwidth at 10.962 Tbps, including subsea capacity at 10.470 Tbps and terrestrial cross-border capacity to submarine cables at 479 Gbps so the real challenge today is how to increase this terrestrial capacity.

As per the map above we have 18 cables with Google building the 19th and Facebook the 20th so the economic impact of subsea cables which Facebook funded RTI International to undertake should be attributing the impact to the existing cables and not the ones that are not yet in existence. Gillian Marcelle, PhD, Managing Member of Resilience Capital Ventures LLC who has had several decades of facilitating and mobilizing capital for the digital economy has this to say: “tackling connectivity across the continent and mobilizing positive economic and social outcomes must draw on indigenous expertise. The the days for us Africans waiting for a savior are LONG gone.” Based on her extensive investigations of African telecoms and tech industries, she went on to admonish recent efforts that render African knowledge and expertise invisible. She further added that there is considerable global and regional scholarly work that already goes much further than simple correlations between GDP, economic output and investments in connectivity enhancing projects. When asked about her key recommendations, Dr Marcelle offered this view: “Many advocates including those active in the global caucuses and multistskeholder partnerships have established conclusively that it is necessary to understand patterns of inequity and exclusion that arise from bottlenecks and blindspots. What is required now are smart and authentic partnerships that build on the foundation laid to produce tremendous positive outcomes. In Kenya, Ghana, Nigeria, Rwanda and South Africa there are ecosystems with components and actors to make good on this promise.”

What Africa NEEDS today is terrestrial fiber to drive the existing subsea cable capacity inland to improve the broadband capacity of the wireless and cellphone networks. The problem they should be solving is not bandwidth to the beaches, but bandwidth to the Savannahs and jungles. Liquid Telecom which is part of the Econet Group owned by Strive Masiyiwa has been in the forefront of building terrestrial cross-border fiber networks across the continent – they have the most extensive network from Cape Town to Cairo but yet to cover West Africa as per the map below. We need three or four more of such networks to not only increase the capacity but provide competition to drive down the price of cross-border bandwidth. CSquared which counts Google as one of its investors is building metro fibers in Ghana, Liberia, and Uganda. Others like Wannachi Group in Kenya, DFA in South Africa, Smartnet in Zambia, Spectrum Fiber in Ghana, Phase3 Telecom in Nigeria, etc and in some cases the Mobile Network Operators (MNOs) are also building metro and national fiber networks.

We are also seeing the growth of data centers to host the applications being developed by digital innovators that drive consumption of the bandwidth being built. The African Internet eXchange System (AXIS) which was founded by AfrISPA and implemented by the AU is growing the Internet fabric by increasing the routing of local traffic on the continent. In Ghana the Internet Clearing House (ICH) by Afriwave Telecom is created the framework for deploying local value-added services that the government and other institutions can take advantage of – this would drive the growth of local content. As we know “content is king” so as we develop more localized African content that is hosted in the data centers and networks on the continent, we would need less and less international bandwidth. Hence my argument that Africa does not need additional subsea cables but rather more terrestrial fiber to improve the existing capacity whiles driving prices down to offer an amazing broadband experience.

$23M of Angel Fair Africa deals after 7 years

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On the 5th of November 2020, the 8th Angel Fair Africa will be virtual instead of in Dakar, Senegal due to the global pandemic. $23M of deals have happened over the last seven events which brought selected entrepreneurs to pitch to a room of angel investors whose primary intent was to DO DEALS. In April last year, Connected Med who was in our 2016 cohort was bought by the pharmaceutical giant Merck – the first exit by any company that has participated in our event. The events have also resulted in numerous joint ventures, trade, sales, mentorship, relationships and other deals that we not have even recorded.

In September 2013 when we launched the event in South Africa my friend Russell Southwood, editor of Balancing Act Africa wrote the most amazing headline – “Angels Over Johannesburg – South Africa hosts the first Pan-African event to introduce ICT entrepreneurs to angel investors” and seven years later the “Angels Are Virtual – doing deals in an online environment” is most like going to be the new normal if this experiment succeeds. Back then there was no event on the continent similar to Shark Tank in the US or Dragon’s Den in the UK so together with Jamie Clyde, my then business partner we approached Ross Douglas and Cobi Labuscagne of Art Logic who were the organizers of the annual Joburg Art Fair to stage the first annual Angel Fair as an opener to their event at the Sandton Convention Centre on 25th September 2013. Two deals happened at that event after twenty-four entrepreneurs pitched to a room of about eighty-eight investors.

Prior to that I had started Angel Africa List with Andile Ngcaba of Convergence Partners and a group of entrepreneurs who pitched to us at a lunch round table in the Eastern Cape at a WorldBank Global Forum on Innovation and Technology Entrepreneurship where we spoke in May 2013 – that is how Angel Africa List the first Angel Network in Africa was started. A year after this Andile Ngcaba founded the Cortex Hub – an incubator/accelerator in East London.

The first event was so successful that in 2014 we were approached by the Africa Venture Capital and Private Equity Association (AVCA) to co-locate our event with theirs in Lagos, Nigeria. Dotun Sulaiman who is now the chairman of the Lagos Angel Network (LAN) was at our event in Joburg and so when I told him about the opportunity to bring our event to Nigeria, he indicated that LAN would like to be our local partner and so I started working with him and Tomi Davies who was then the founding CEO of LAN. LAN made its first investment in Autobox and Hutbay who had pitched at the event.

In 2015 we brought the event to Accra, Ghana during which three deals were announced – I wrote a medium post to elaborate on all the events and why we took it beyond the KINGS countries. In 2016 when we took the event to Nairobi, Kenya, we introduced our first all-female investors panel, this year we are adding an all-female entrepreneurs’ panel to showcase the growth of gender diversity in the ecosystem over the years. For the first time, we are also going to have a 70/30 majority female pitch – who participated in our first Africa Virtual Accelerator @ https://www.africavirtualaccelerator.com. This rise in gender participation is a clear representation of the potential of women in the African entrepreneurship and investment ecosystem over the next decade.

The acquisition of Paystack by Stripe for over $200M last month has generated considerable interest in the Africa startup scene. As it crowned a series of notable mergers and acquisitions that gained momentum during the pandemic that are bringing home the realization that the ten-year cycle for African tech ventures have come full circle in 2020. Hence, we would be seeing more of such deals to encapsulate the maturity of the sector. This gives a healthy backdrop evidenced by the fifty-five international investors that have signed up for our event this year – partly because it is virtual, so they won’t have to fly into Senegal which was supposed to be the physical location. Last year in Tanzania we could not find enough candidates for the our “Exits Panel” but a year later we suddenly have too many – may be this is the sign of abundance going forward given that scarcity of exits has been the bane of the industry.