Last year, tech giant Apple acquired HopStop, a startup founded by Nigerian entrepreneur Chinedu Echeruo. The app provided an online transit guide for over 500 metro cities worldwide. It also detailed door-to-door transit, walking, biking and taxi directions with real-time data from numerous sources.
Jonathan Berman in his famous book, ‘Success in Africa’, writes, “Many people fail to grasp Africa in a business context at all. For many it’s perceived as a place of happy animals and miserable people, and that’s about it. Even executives leading international businesses move more slowly into Africa because of risks that are real, but vastly overestimated. Africa today is the fastest-growing continent on earth, with two-thirds of its countries expected to grow at more than six percent per annum.”
This kind of exits will do a lot of good for African tech ecosystem as these entrepreneurs will in turn fund other startups. Also the acquisitions will change the perception about African entrepreneurs as well.
African emigrants are a strong economic force and sent home $60.4bn of remittances to the Continent last year. But that is not enough for the kind of entrepreneurship that is needed here.
The longest title book that was published in 1719 reminds me of the state of African geeks.
‘The Life and Strange Surprising Adventures of Robinson Crusoe, Of York, Mariner: Who lived Eight and Twenty Years, all alone in an un-inhabited Island on the Coast of America, near the Mouth of the Great River of Oroonoque; Having been cast on Shore by Shipwreck, wherein all the Men perished but himself. With An Account how he was at last as strangely deliver’d by Pyrates’
Right now, the life of an African entrepreneur is similar to Robinson Crusoe’s — strange, surprising and adventurous, living in an un-inhabited ecosystem all alone with a few or no VCs and neither enough mentors. Most of the startup funding flows from FDIs (the pirates how they showed up at the island like Rocket Internet).
It doesn’t mean there is no money stashed locally. But still Africa’s HNIs (high networth individuals) prefer traditional ways of investment as opposed to the high-risk but also highly rewarding seed and angel investing.
For the next few years the current trend will continue. Foreign VCs will continue backing the first generation of African entrepreneurs. When they make it big after their first exit, those entrepreneurs would then invest in the next batch of startups.
For years, tech entrepreneurship was considered dead in Africa, alive only in the Silicon Valley or other emerging markets as a career option for kids in the eyes of their parents.
Well, entrepreneurship for African entrepreneurs is getting exciting now. With last year’s exits of Hopspot and recent funding of iROKOtv & Konga, African teens can now point out these success stories to their dads and get their blessings when they tell them, “Dad, I’m going to be an entrepreneur.”
This week South African-born Mxit has gone global and expanded to India. We at YourStoryAfrica believe this trend will continue to grow. Mxit was developed in emerging market to solve the need of emerging markets. When the app was created it was heavily optimized to work on slow and sluggish 2G internet connection in Africa. And India is also facing the same speed issues when it comes to majority of cellular data subscribes. There are many problems that India has solved locally which can address similar problems in different regions of Africa.
We can’t compare our startups always with the ones in Silicon Valley. African startups exist first and foremost to solve African problem (who else will come and solve it then). Just like Nollywood and Bollywood exist for the local audience. These industries didn’t just copy the West, they exist to fill the need of local entertainment because Hollywood guys won’t get the way the locals serve a local need.
Similarly, we need to educate our HNIs to support African tech entrepreneurship. Meanwhile, locals are trying to solve local problems. Battlefild 2014 is one such initiative we believe will help the entrepreneurship ecosystem.
May this year be a year where we send strong AfriCAN message to the world, saying Africa Can!