Is 2021 the year of entrepreneurship in Africa?
8th UmojaAA Discussion paper: African Tech startups |Umoja Auctions and Ads ‘UmojaAA’| Africa FinTech| Africa Delivery services | African Digital Products
The paper introduces ‘the concept of functioning as whole’ to enable young entrepreneurs of Africa to introduce new ways from 2021. UMOJAAA, SUPAFRICA, ZOOM, JIJI, CIAFRICAN and many more already showing a big impact on the continent. Those platforms will achieve more and solve hundreds of problems constraining African economies from 2021.
Big African Businesses, financial institutions, Governments and current billionaires must do their TBL plus investing to the continent. This will also encourage hundreds of new entrepreneurs, enable rising stars to reach new heights which offers countless opportunity for the whole of Africa.
The year of 2021 comes after all of a 2020 of hardship transformed our way of doing things. The Corona Virus (COVID-19) Pandemic has shown the weakness of African countries when they rely on imports of almost everything.
On one hand, it has been a big challenge that has shaken globalism as we know it. But on the other hand, it has been time to welcome skyrocketing innovation, particularly technology and digital services.
With borders shut, every African country is trying to manage on its own to support its population. In this aspect, some countries haven’t been able to sustain themselves. The importation of essential goods halted has become a recipe for catastrophe.
Public services have declined because they are funded through foreign aid. Many businesses have completely closed either due to the lack of goods, (lack of customers with money) unable to meet operational costs and governments are not in position to offer support and in some cases both altogether.
On the positive side, as of 2021 we are going to see a lot of young entrepreneurs popping up in every corner of Africa. Young people receiving modern education are equipped with faster dynamic technologies with the internet.
Young people already know more than the basics as they are heavy users of social media tools. Running a business online is the new trend. The Pandemic has forced us indoors but it did not stop us from thinking out of the box. ‘This is what we call coping with a changing world’.
All thanks to the new platforms and call-chat apps allowing young people to explore the cyberspace.
Examples are: UMOJAAA, SUPAFRICA, ZOOM, JIJI, CIAFRICAN and many more. But to enable those platforms, Big African Businesses, financial institutions, Governments and current billionaires must do their TPL plus investing to the continent.
Funding the start-ups has to happen. These investors include (Davis, 2020): Aliko Dangote, Mike Adenuga, Issad Rebrab, Johann Rupert, Nicky Oppenheimer, Nassef Sawiris, Naguib Sawiris, Aziz Akhannouch & Family, Mohamed Mansour, Abdulsamad Rabiu, Patrice Motsepe, Isabel dos Santos, Mohammed Dewji (Ayub, 2020). [masterslider alias= »ms-5-1″]
Those mentioned above have a crucial role because digital platforms rely heavily on the abilities of postal services, finances, payments getaways, employments as well as education to the population at large to use financial institutions.
This concept is what I call “functioning as a whole” like an engine. It will be explored further in the discussion section of this paper.
Overview: African start-ups with promising success as 2021 take off.
The year of 2020 has shown a significant number of digital products starting from ‘out of the blue’ with the promise of success. A few with an obvious promising future from the stats of faster growing signs: UMOJAAA, SUPAFRICA, ZOOM, JIJI, CIAFRICAN, Jumia, Andela, SkillPatron, OKO Finance, Trella, Kaoun, Exuus, MPost, RideSafe, Flexclub, Intergreatme, and Pineapple.
UmojaAA is the creation of Remmy Bar an Australian based fellow from Burundi.
‘A Single Market Platform For all Africans: We connect sellers and Buyers under one roof.’
UmojaAA is only a start-up and been around for just 4 months. It is a listing platform for all Africans from all countries. It empowers local to local trade and promotion of every product to maximise the output of every tool, and final products. This platform is powerfully built with advanced tools for safety and includes many features of front-end users to showcase every ad.
Its hard to believe that such a powerful platform can be offered for free, but, from the founder himself: “It is free because technology is not as cheap as many people might think and a lot of African ordinary users would not afford it otherwise.
What would be the point of trying to solve an issue while creating another issue in the process?” The founder ensures that whether the business is small or big, individuals will be able to use it.
UMOJAA solves the challenge of finding products and services. With over 26 categories, it is a guarantee that anything can be posted and found on the platform. You can consider UMOJAAA marketplace as the online version of your typical local market. (Bar, 2020)
The founder and the team have worked tirelessly and achieved an incredible end result without any investor. What is amazing is how users find it simple to use yet very powerful however everyone uses it for free.
“Addresses display” is something we have never seen before in Africa. From hierarchy of Country-State-Local Municipal-Village or city, it shows the exact location which has always been difficult in Africa.
UMOJAA includes three languages: English, French and Swahili, however users can post any ad in their local direct. Within the first 4 months there are now hundreds of users registered. This speed of take up is only the beginning and 2021 is here to see our spread grow.
There are no cost figures mentioned to indicate how much this platform is worth but based on calculations and figures usually published about similar platforms of such capabilities, we can estimate in hundreds of thousands of dollars.
Supafrica is the creation of Hafiz Alhassan-Kanu a US-based fellow from Sierra Leone. (Okeowo, 2021)
This app is also a new start-up but looks like it has a bright future. It is enabling messaging, chats and calls linking one user to another and faster reaching in thousands of downloads.
The social messaging app is a firm demonstration of the continent’s ability to compete in social media messaging development.
According to Techeconomy.ng, it can be likened to WhatsApp -except that it is 2 times faster.
Techfrica is the company behind the app and is owned by Mr. Hassan Hafiz Bakarr-Kanu Sr. who launched the app on the Google Play store on December 11.
- Voice and video calls are faster, audible, and cheaper.
- Like WhatsApp, you can forward messages to over 20 contacts at a go
- You can create a Supafrica group and add an unlimited number of contacts
- Accepts 2G, 3G, and 4G without scrambled voice or video calls
The app, just like WhatsApp, has all the features that WhatsApp has. But one thing that it has that WhatsApp doesn’t is, it’s 2× faster than WhatsApp.
Sending a message on Supafrica is faster than sending a message on WhatsApp. A voice and video call in Africa is of high quality and faster than WhatsApp.
ZoomTanzania is Tanzania’s largest trusted online classifieds platform that conveniently connects buyers and sellers. It started in 2009, but it is obvious that the users and ads skyrocket as time progressed with technologies. (Tanzania, 2009)
It is an online classified with an advanced security system (Jiji, n.d.). it provides a simple hassle-free solution to sell and buy almost anything.
It operates in few African countries, it operates almost similar to UMOJAAA, the difference is UMOJAAA has a further reach and extra advanced features such as auctioning, live ads and integrated addresses.
However, the point is that Africa is adopting to digital technologies and enabling many people to reach to new heights in their everyday lives.
Ci Africa connect
Commerce and Industry Africa (CiAfrica) was established to promote and support Africa’s small to medium sized enterprises’ (SMEs) growth and sustainability and showcase Africa and its strategic partners’ products and services on a global platform. (CiAfrica, n.d.)
The aim is to empower Africa SME’s continuous development through our online and offline workshop programs, training and seminars. These are designed to address various facets of business process. CiAfrica online of offline workshops and training programs are hosted by world-class trainers, mentors and professionals in their respective specialisation and industry, sharing their trial and proven business process methods and experience.
CiAfrica Connect determination is to be the best marketplace for African businesses and its strategic partners, heightens commitment to research, learning and developing innovative technologies, skills and concept to expand new frontiers of African SMEs.
CiAfrica endeavours to continually support and aid Africa economy growth, through its initiatives and incentive programs for African SMEs, to network and build partnership based on trust, transparency and mutual growth benefits.
It explores opportunities to connect members with potential business partners, locally and around the globe. It may not have solution to every enquiry but it does know where to refer a client for a solution.
Jumia has been regarded as the amazon of Africa and it has been around for a while now. It had a good funding base and was listed on New York stock exchange.
A year after its much-heralded debut on the New York Stock Exchange, e-commerce start-up Jumia has shut down in three African states, struggled to turn a profit and got dumped by its original owners.
In 2019, Jumia recorded a loss of 34% to $246m, the eighth straight year without profits. (BBC, 2020)
A silver lining arrived with lockdowns that shut down much economic activity but led to a surge in online shopping. Before the rush, the African online retailer had ended last year with 6.1 million active consumers on its websites, up from 4 million previously.
For Jumia, it has been a good year of 2020 and there is no sign of slowing down this growth. It is obvious that after the pandemic people will be already used to online platforms.
Andela is an American company with operational campuses in Africa including Nigeria, Ghana & Kenya that identifies and develops software developers. (Andela, 2014)
The company launched operations in Nigeria in 2014, to help global companies overcome the severe shortage of skilled software developers and has offices in Kenya, Rwanda, Uganda and the United States.
Andela was founded in 2014 by four professionals who were not working in the online education and recruitment business.
The founders, Ian Carnevale, Iyinoluwa Aboyeji, Jeremy Johnson, and Christina Sass, started Andela as a training company to match developers in emerging markets not known as technology hubs with North American companies.
In June 2016, the company received funding from the Chan Zuckerberg Initiative. In 2017, Andela raised $40 million in Series C funding. The investment came from CRE Venture Capital, DBL Partners, Amplo, Salesforce Ventures and TLcom Capital, becoming one of the most highly funded African companies not based in Africa.
In November 2018 it officially launched its office in Rwanda. Andela also announced its first female Nigerian country Director, Omowale David – Ashiru explained in 2018.
In January 2019 Andela raised $100 million in the next round of funding.
On 17th September 2019, Andela made a shock move when it announced the departure of nearly 250 junior developers and staff from its Nigeria and Uganda offices, with another 170 potentially impacted in Kenya. The move came as the company looked to restructure its talent pool to more closely align with global market demand.
Unlike other booming tech companies, which are designed to tackle the issues brought by Covid-19, Andela failed because of its initial structure.
On 6 May 2020, Andela announced a layoff of 135 employees due to a drop in the demand for its services due to the COVID-19 pandemic. There is no doubt, and it is obvious that Andela was created to work along the traditional form of business and not replace them in times like the pandemic where those physical standing traditional standing businesses actually shut the doors.
SkillPatron is pioneering a new labour model for a rapidly evolving workforce as an African start-up that is changing how individuals get work done & how businesses operate by delegating strategic tasks to its team of highly trained “Project Managers’ who strive to provide their clients with help on some of their most crucially strategic tasks. (Orubuloye, 2020)
SkillPatron now has a turnover of well over a million US dollars with more than 500 enterprise clients & organizations including big names such as the United Nations, Vlisco, Samsung Nigeria, Krispy Kreme, Kodak Nigeria, Mitsubishi, Dominoes, Kuda Bank, Jumia Nigeria, iRokoTV, Uber, Wakanow, Filmhouse Cinemas, RenMoney, PiggyVest, Afrinvest, Enyo Oil, Chikki Foods, Cars45, several major banks, online betting companies and major cinema outlets in Nigeria to name a few.
OKO Finance was founded in 2017, OKO Finance develops affordable mobile-based crop insurance products to provide small holder farmers and horticulturalists with the financial security they need, regardless of unstable weather/climate trends.
This African start-up raised a pre-seed funding of US$300,000; but is now looking to raise US$1.5 million in order to grow more quickly.
There is a strong confidence they’ll get the backing as we look forward to seeing them scale their solution to more farmers and additional markets in the year 2020.
This is not a tech start-up, but make no mistake this a service that is in high demand as digital platform as it plays role of facilitating others to achieve a particular goal.
This African start-up has developed an innovative relay-based way of tackling last-mile deliveries and was founded in November 2018 as an online marketplace that connects local couriers with local commerce including combining the gig economy and machine learning to optimise domestic, inter-state cross-border and last mile deliveries.
At the moment this African start-up is delivering over 8,000 parcels and generating more than US$50,000 every month. It’s worthy of note that this African start-up expanded to South Africa in November 2019 and there is a feeling this start-up will be pan-African in no time.
This is very crucial because Africa has lacked postage services far too long, and without this important link, all listings platforms can only do so much but still be almost halfway to connecting buyers and sellers.
Egyptian trucking marketplace Trella is no doubt a rising star of 2019. It managed to raise more than US$600,000 in a pre-seed funding round in addition to being selected for the Silicon Valley-based accelerator Y Combinator whilst concluding the year by acquiring their closest local competitor Trukt.
Regarded as a new company, Trella already operates a B2B trucking marketplace which connects shippers with carriers in real-time, with the goal of making the entire supply chain considerably faster and more reliable while reducing slack and exceptions.
For Trella this year’s list of successes comes from a team that told Start-up Influencer they are taking growth “step-by-step”, and not making any hasty moves — so what could possibly hold back the acceleration of this venturous well-planned company!
I strongly believe that many online start-ups will be able to faster grow if they have the delivery services as a link to the buyer.
An African fintech start-up from Tunisia tackling on the big question of financial inclusion. The African start-up’s first product called Flouci is a mobile and web app that allows users to create free bank accounts remotely; facilitating the process through an innovative Know Your Customer (KYC) system via smartphone.
A critical component to any start-up’s success, the team behind Kaoun is top-notch: co-founders Nebras Jemel, Anis Kallel, and Rostom Bouazizi put their studies in the United States at Harvard University, University of Rochester, and Columbia University respectively — on hold to come back to Tunisia and build a fintech start-up.
This African start-up launched in 2018 and has already raised funding from two angel investors and secured key partnerships with two major Tunisian banks and the country’s National Digital Certification Agency. By all yardsticks this African start-up is definitely worth watching out for its growth.
I cannot explain to what extent this service is important to the success of all online businesses. Like delivery services, well the goods need to be paid first right? You get the big picture.
From Rwanda, this Fintech start-up has just had an exciting year specifically in that it has been busy honing its pitch to perfection.
No doubt that this African fintech start-up is doing a great job with forging the saving culture of traditional saving communities to come online in an effort to ease saving processes by helping low income communities become more financially secure.
Early 2019, This African start-up was one of 10 African start-ups selected to pitch live to an audience of over 600 attendees at the annual Africa Start-up Summit held in Kigali carefully picked from more than 100 applicants from around the continent. Let’s say igweee!!!!, at this point already.
It also was named winner of Seedstars’ Rwandan event in 2019 securing it a place in the global final at which Exuus will pitch for up to US$500,000 in equity investment. We have no doubt they will stand a good chance of coming out on top of the contest.
MPost is an African start-up of 2015, it took quite a while to get going until recently things have really begun to hit an upward stride quickly.
Robust and effective this African start-up has developed a platform that enables the conversion of mobile numbers into official virtual addresses which also allows notifications to be sent to clients whenever they get mail through their postal addresses.
It participated in the Startupbootcamp AfriTech programme held in Cape Town in the fall of 2018 and has ever since raised about US$1.9 million in Series A funding rounds to bolster finance its expansion and further development of its proprietary platform.
Isn’t this a very exciting news for Africa? It seems like every start-up is like a piece of the puzzle that must be in available, in a proper position and on time in order the whole businesses of whole of function.
We’ll be doing some conjuring here taking motorbike taxis along with affordable emergency response and then add on blockchain: You hodgepodge these together with a bucket of innovation and you get RideSafe.
This African start-up from Kenya offers an emergency response service for public motorcycle taxis and cabbies which utilise a micro-insurance financing model running on a decentralised blockchain application.
RideSafe has had quite a good year having raised US$100,000 in pre-seed funding from æternity Ventures after taking part in the Bulgaria-based æternity Starfleet Incubator for blockchain start-up in addition to being selected to pitch at the African Start-up Summit in Rwanda in February 2020.
All I can say is stay tuned to watch for amazing things happening to this start-up in 2021.
As one of the hottest african start-ups in the southern tip of Africa it’s noteworthy to see how FlexClub fares in 2021, after a solid start since launching two years ego.
From South Africa, it allows users to purchase vehicles which are then matched with Uber drivers who pay a weekly rental charge to the investor.
Flexclub has a solid founding team including two former Uber employees. Some records show that 2 years ago it raised US$1.2 million in a seed round led by CRE Venture Capital and also featuring Montegray Capital, & Savannah Fund in the first quarter of 2019 amidst plans to grow its team and expand into new regions.
African Regtech start-up Intergreatme can be credited as one of the first crowdfunding successes of Southern Africa after securing a whirlwind ZAR32.436 million (US$2.19 million) from 406 investors via the Uprise Africa platform in May of 2019.
Within six days it had already raised ZAR28.5 million (US$1.98m), with the Africamstartup limiting the raise to ZAR32 million which it managed in 2 weeks. This monumental raise was marred slightly by the fact the African start-up later decided to reject a bulk of it after some investors failed compliance processes.
Even at that the fact still stands that the start-up is an attractive proposition, however and the tech world gets what all the hype is about. Intergreatme has developed a web and app platform that digitises verified personal information for over 25 million credit-active South Africans for streamlined use across businesses and other organisations.
This company’s role in enabling online businesses is critically important.
Established in the second quarter of 2017 Pineapple allows users to get quotes and insurance on items with just the snap of a picture.
This incredible African start-up has been growing stronger and stronger since launching and raising seed funding as well as taking part in Google’s Launchpad Africa accelerator and the US-based Hartford Insurtech Hub’s accelerator.
When you think things can’t get any better, in 2019 this African start-up won the single biggest prize at the annual VentureClash challenge in the United States (US), securing US$1.5 million from a US$5 million prize fund. Without a doubt, with the milestones rolling in, we’re sure 2021 will be a stellar year for this start-up.
Analysis and Discussion
There are other services that need to function correctly in order to facilitate others. It is not a surprise that almost every thoughtful start-up in Africa is taking off. Africa is realising its potential.
First, financial institutions are setting roots, people are waking up to use these institutions rather than keeping money in the port under the bed or in the ceiling.
I am sure every adult African would be familiar with the concept. If not done it yourself, you have seen your parents or grandparents keeping their savings in this way.
There is still a lot of work to be done in this sector. Set up products that facilitate start-ups. It is more convenient for the clients so that a chain of trade functions without hurdles. But people are afraid to get loans when some banks are not credible nor trustworthy.
Keep interests rates to a minimum or offer special packages for the businesses like tech start-ups because these businesses do not start making money right way. Let the start-ups have a lead time before they can start making repayments.
Despite the technologies rapidly increasing in Africa, it will not make much difference unless the banks run serious campaigns to encourage people to use the banking systems. Why is this argument crucial? Banks work in partnership with payment getaways.
Fintech certainly are the link between a web of clients, suppliers, contractors and everything in between.
During the pandemic, in the western economies, most businesses adopted quickly to online. It makes sense since everything is forced to close, social distancing and so on…It couldn’t be as simple like that in Africa.
The west economies have infrastructure to enable online shopping, delivery services and old and new ones both making a timely manner delivery from foods, medicines, clothes and others.
It is possible because almost everyone has master or visa card, if not the least is a bank account which they can easily link to payment getaways such PayPal, Bpay etc…
Africa lacked these important infrastructures such as good secure and faster internet, payment getaways such as PayPal, Bpay, and other fintech that must interlink businesses to customers.
It is in my view that nevertheless, the pandemic has taught Africa a lesson to have these systems in place not only for uncertain times like covid-19 but definitely because they ease the way of doing business. Economies across African countries will be much healthier.
Second, big enterprises, continent of Africa billionaires could do better. I do not agree to the argument that Africa has no spending power like many analysists sometimes put it. It all starts with products packages are suited to intended customers such as Africans.
Many start-ups die before they see the light of the day because no one give them a chance. Start-ups that survive the initial phase found investors either venture capitalists or angel investors from out of the continent.
Africa has a lot of billionaire, but they do not trust in their own continent abilities. Weather we admit it or not, new start-ups are the ones making the difference, because they are tackling the real issues of 21st century.
Big enterprises should be the one investing into these brilliant ideas. Billionaires all over the continent can create programs that attracts young entrepreneurs’ great ideas.
The capabilities of young entrepreneurs who understand how 2021 things work are in better position to come up with solutions that are keeping Africa behind health wise, financially, technologically and agricultural.
2021 is already showing promising better future for many fintech and digital marketplaces around the continent that are enabling payments, deliveries and connecting sellers to buyers like UMOJAAA. Investors are the ones who should ensure these must have platforms become successful.
I can argue with confidence that a loss of any of the above-mentioned tech start-ups is not only for the founders and co-founders but is a loss also to the continent as whole. Why is this the case? Employment, a lot of youths are finishing universities with basic knowledge of technologies they have a better future being employment in these start-ups.
Every business will benefit from tech services. Example why would anyone want to enable the bank account with abilities of online transactions when there is no one offering digital products!
The logic of linking investors to start-ups, financial institutions to fintech and so on can go on and on. The simple explanation is that there is a strong interdependency on one another. It is a matter of growing together or fall when refuse to support each other.
Third, government need to work a bit harder to encourage creativity and innovation. start-ups will be successful if they get a support from the host government.
How would these start-ups grow when they main potential client ‘government’ only uses world bank or other foreign global contractors.
Young entrepreneurs design good systems, apps that can solved many issues a nation faces, but government do not want to use them. These could be systems such as taxation systems, bookkeeping software’s, security systems, educational material available online and offer school computers that young children can start using technologies at early age. The world looks more brighter for those who can be able to use IT systems.
Governments should allocate grants to tech start-ups. Running contests and rewards contacts to the winners. This concept will not only reward the winner but the rests also will have showcased their innovations and will continue to grow offering to the products and services to clients.
Finally, people of the communities have a part to play, they are clients. People need to understand that we are living changing world and technologies are big part of the change. Think of it like in tech world, an updated version of an app cannot work in order version of a system, hence they both get boosted with new and capable abilities to be compatible.
Using technologies people do things more effectively and efficiently. For example, if they can buy a product or a service online is simply done in minutes from a comfort of their choice.
There is no need to go miles of distances looking for similar products or service when all are available on a click of a mouse. So, use banks to enable online payments, use immerging digital products to life easy.
Delivery services are here to serve member of the community, use them to show support or the collapse and both loose as I have discussed in this paper. This is the concept of interdependency in action. Is the lesson is learned to have the options offered by these start-ups that will be always solve the issues difficult times like the Covid-19 pandemic.
What is the take from this paper?
The paper has discussed the trajectory of entrepreneurships in Africa moving through 2021: some mentioned: UMOJAAA, SUPAFRICA, ZOOM, JIJI, CIAFRICAN, Jumia, Andela, SkillPatron, OKO Finance, Trella, Kaoun, Exuus, MPost, RideSafe, Flexclub, Intergreatme, and Pineapple.
Covid-19 brought challenges businesses, and things are no longer the same and it is evidently the changes are only setting stronger roots. Traditional businesses have suffered, but new start-ups in fintech, digital platforms of marketplace based on cyberspace are showing significant success.
From 2021 onwards will be a consistent moving towards tech innovations and no doubt lives will change for better.
The concept of functioning as a whole or simply put the interdependency will determine whether all these new start-ups success for hundreds of years to come or fail.
Financial institutions, big enterprises and billionaires, governments and communities have no choice but to support one another.
The four stakeholders divided will lead to start-ups and above-mentioned showing success in 2021 reversing to fail.
Only choice is the four stakeholders supporting each other; it will transform Africa to a super power economy through innovations, and unleashing hundreds of potential capabilities.
Embrace the interdependency approach, and everyone is a winner simple as that!
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