African Startups Are Increasingly Attractive to Investors
afridigest.com
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I am in West Africa right now, have been to 15 countries in 12 months, and will visit another ~22 over the next 12-18.
CNN, Fox, the whole western media are not telling you the truth about life here. They are showing you the sensational stuff that makes headlines, nothing more. Because of that, anyone that has never been has very little information about the realities.
The comments in this thread are so far from the truth they are a disgrace. People are commenting here that clearly have no actual experience, and are just parroting what the media said about africa in the 1980s. It is not the 1980s now.
Comments about constant war, "most African countries already have huge problems to provide even basic needs to already existing population", etc. just show how ignorant about the realities here people in the developed world are.
There is a massive, massive amount of development here, and hundreds of millions of extremely happy, friendly and kind people pulling themselves up into the middle class and beyond.
If you "think" otherwise I challenge you to come here and see for yourself. You will be utterly shocked (I was, after years and years of research and talking to >50 people who have done what I am doing now)
[1] https://en.wikipedia.org/wiki/West_African_Ebola_virus_epide...
I agree 100%.
Said in another way, the Western Media is doing a terrible job of informing people in Western countries about Africa.
Having been here a year, I now go so far as to say the Media are doing a negligent job. It's disgusting and is causing real harm (as you illustrate).
And that the wars they read or see on the news is happening all across Africa. It really upsets me.
Am from Zambia and we have never experienced any war (yes not even civil war) its a beautiful, peaceful country. The only thing westerns know about Zambia is the Victoria Falls, because it was named after Queen Victoria. The rest is not important.
And FYI am the Co-founder of www.cognifly.com
A search engine for Zambian web searches.
Edit: typo.
You don't see many chains/franchises here: takes capital to start and expand them, which people can't get access to. So most businesses are one-offs. There's a lot of space for innovation here; living in Kenya, I used to say you couldn't walk down the street without literally tripping over a market inefficiency. Just gotta get the investment to come in and get to the right people...
(There's a direct flight from Atlanta to Lagos these days if anyone is interested in checking it out, by the way.)
My details are in my profile.
Hell, the now 14 year old African girl my daughters class sponsors, who is from one of the poorer areas, recently build a water filtration system and hooked it up to their solar panels and a raspberry piish device that I don't even know what is.
I was in Africa last year for 2 months after 16 years in the US. I share your feelings 100%.
I suspect a very similar situation is happening in many other African states that are pro-investment.
I would say that a key thing to bear in mind is that investments in Africa are first and foremost just that: investments. They could fail. And treating it as a homogeneous body is akin to saying you're investing in North America instead of saying you're investing in a specific company in South Carolina because of xyz economic, social and political factors.
Africa is not a country, it is a continent. Comparing it to India or China (whose economies haven't really paid off for foreign investors as much as you'd think) is a major flaw. China and India have an incredibly consistent society from corner to corner and well organized governments. Africa on the other hand is a few dozen sovereign countries, without a common culture or language between them. They are constantly at war with each other and within each other.
I think in order to extract the full economic potential of Africa you'll need to see unification at levels that put the EU to shame and at least a decade of trusted, non-corrupt, forward looking governance.
I think it'll happen, but not for a very, very long time. Until then, follow the Chinese govt investments in Africa and try to tag along.
That is literally the first time I have ever heard anyone, Indian or not, describe India that way.
The latter tends to spur economic activity with much less friction than the strings attached version.
I am on the ground in West Africa right now. I have been to 15 countries from Morocco to Gabon in 12 months, and will visit another ~22 in the next 12-18 months.
Your statement makes it clear you have absolutely no idea what you are talking about. Maybe what you said was correct in 1980, but things are changing faster than you can imagine.
There are 54 countries (not a few dozen), over 1.2 billion people in "Africa".
Your statement about war is so far from the truth it's laughable and absurd.
If you get your information from CNN and Fox, you need to stop. It is not giving you an accurate picture of how the world functions
> There are 54 countries (not a few dozen)
I’d say 54 is a “few dozen” as much as any number can be described as such.
Sorry if bikeshedding.
You don't hear these things through the media. Population numbers are consistently surprising to me at least.
I know. I’m ethnically Indian. I’ve been to India multiple times. If I were to invest in an Indian startup it would probably be in Bangalore or Chandigarh.
Just as it is highly unlikely that I invest in a startup in Wyoming, it is unlikely that I invest in startups in large parts of Africa.
Calling it “Africa” is just short hand for segments, categories, and locales in that space.
And boy is India far from consistent and organized. I speak Punjabi and don’t speak Hindi. There are 50 other states and 50 other languages that are spoken.
Not too far off as a description of the EU either.
There's definitely a lot to fix regarding the political climate, and I agree with your sentiment that it'll take a lon time. But I do believe growth would be exponential given the common markets (EU with a diverse, culture, India, China) to learn from.
I don't see that they'd need to worry about international markets. At least not initially.
Checkout Nigeria, Namibia, South Africa.
These are powerhouses.
I agree with the basic idea, but Africa is way too over the place for that statement to apply at the level of the continent. Some countries will still be down and out due to their economical and political instability (there is really nothing in the cards today indicating that Nigeria or Congo, for example, will be significantly better 20 years from now), and on the other hand I would not be surprised if some countries would outdo the "China" metric and be considered developed first-world economies by then (in fact I would be surprised if it did NOT happen for a handful of them).
I am a Nigerian and I think you are wrong. There is a lot of agitation in Nigeria especially from the young people and an imminent collapse of the old order. An Arab Spring like revolution is imminent. There is a bubbling spring of young and hungry talent on the continent there is a definite acknowledgement that things need to change fast.
That aside, despite the upbeat tone of the article, investment is still very hard to source in Africa despite the fact that the amounts required by the continents entrepreneurs are really small. Most founders require seed funding in the 10 -20k range. I am trying to solve this problem. Anyone interested in joining forces can pm me.
Nigeria seems like it could be a giant if it can only get out of its political woes. Isn't separatism/terrorism still a major issue? Does that impact daily life for the average person? My Nigerian friend never spoke of life being unsafe but that the government was corrupt wasn't really a question.
"It's Difficult to Make Predictions, Especially About the Future" and more relevant: "Peace for our time".
(Quick aside: I am realizing I am implicitly using China as a reference for economical improvement, but not India as also mentioned by GP post, simply because some segments of the population in India still live in a horrendous level of poverty, and I think true improvement necessarily implies the elimination of extreme poverty.)
To keep the Arab Spring as a point of comparison: it did succeed in Tunisia because the population (1) is educated and connected, and (2) had an homogeneous view of where it wanted to go (politically speaking). This meant that even if not all "pro-regime" forces were cleaned out they still had to take a back seat in the new regime (example: their police forces), and alternative political movements such as the islamists literally abandoned islamism after a few years. In contrast in Egypt it failed IMO because (1) 25 % of the population is illiterate, so is not educated/connected/informed all that much, (2) had differing views, with a major islamist movement in place (that historically had basically grandfather islamist terrorism), and (3) some major "pro-regime" forces (in this case the military) were not reformed/removed and still had all the resources and levers they needed to depose the new government whenever they felt like it. So in the end Egypt returned to military dictature as quickly as it had left it.
Again, I would really be happy to be wrong, but right now if a revolution happens, Nigeria is more on the "Egypt" end of the balance than on the "Tunisia" one. If we look at all the revolutions or major reforms that have happened since the 1980s, the successful ones have always happened where civil society was past some education threshold and had a good cohesion regarding its ideological worldview (basically nation-wide support for secular democracy and the rule of law). That was the case from South Korea to Taiwan to South America, so I don't see why it wouldn't apply to Nigeria as well. Note that I'm NOT saying that there are no people educated/informed enough, what I am saying is that because your country is so big and the disparity so large, there are A LOT of people who right now are not informed enough and way too removed from any political discourse to be enrolled in a cohesive reformist movement.
That being said my point was specifically for the short time-frame being discussed (within 20 years). I don't think such a huge country can navigate through such deep changes that quickly, but it's very possible that much of the preliminary work (such as getting the majority of the population on the same political page) can be accomplished by then. For example it's possible that because your educated youth is fed up, an anti-corruption advocate or national-level politician will gain significant prominence and start pushing the country in the right direction.
https://www.startupgrind.com/blog/why-lagos-in-nigeria-is-af...
https://www.quora.com/Which-Nigerian-tech-startup-will-be-wo...
https://techcrunch.com/tag/nigeria/
I didn't even know till I searched just now that Lagos already has online grocery delivery! It's been quite a few years since I was living there and incredibly hard for me to imagine. :)
The excitement of Africa is the chance at something new - why not something local, sustainable, and not prey to the walled gardens and greed of the West? The idea of something uniquely African is far more exciting than SV Tech: A Foreign Adventure.
Africans have ingenuity and local knowledge. The developed world has cash and business know-how. So long as corrupt government officials can be avoided, there's a chance that there can be a symbiotic relationship.
And I agree, Africa is hot hot hot ;)
Like all good investors, I know people. :)
Investors will feed you crap about being value-add, experience, help with sales, help with hiring, etc, etc. But good investors know people and bad investors don’t know people. They call it “proprietary deal flow”, but it just means that they know people.
I'd like to know the answer to this too.
I launched this recently to help with the discovery problem diasporavc.com
FYI: Ensibukko is a company I like very much
[1] https://esa.un.org/unpd/wpp/Publications/Files/Key_Findings_...
On the bright side, economic investment, growth & development might be one of the best ways to eventually curb said population growth.
(disclaimer: I am an investee of 88mph)
There is an incredible amount of opportunity to build mobile digital services targeted at markets where offline functionality is a must and low-end Android devices are the norm. Hopefully the interest and investment in fintech will also mean that payments infrastructure will continue to improve and get relatively cheaper over time.
We have seen far more positive developments towards democracy in Africa than in the middle east. Military conflicts in Africa seems to be winding down, while they just seem to get worse in the middle east.
More religious diversity, not just Islam, I think is a gain for Africa. I don't think they will get bogged down in religious extremism as in the middle east.
To those who claim unified India and China as such a big advantage. I think being unified has just short term advantages, but lots of longer term problems. Look at Europe. A key reason Europe sped past China in the past, was because it was NOT UNIFIED. No single stupid leader could ruin European progress. It worked like a free market of ideas where bad ideas get weeded out. In China you had emperors who would declare that going overseas is bad. And then with a brush stroke, an area the size of a continent stops trading or exploring overseas completely, leaving that to the European upstarts.
The advantage of Africa being divided is that it provides a big sandbox to experiment with what works and what doesn't. We see many smaller countries have success like Rwanda. This allows other countries to evaluate what works and copy good ideas and discard bad ones.
Another key advantage today, is that we are passed the naive western aid of the past. Today we got China making big investments in infrastructure, mines etc getting the economies going. And I think it is a positive thing with all the people they are sending in as it allows Africans to learn from other countries how they work and do things. China not being as developed as the west is probably an advantage as it is easier to understand each other.
Western countries are so far ahead that we often have no clue about how to operate or do business in less developed countries. We make a lot of stupid assumptions, which only work in modern well developed economies. I think the Chinese understand a lot better of to get things working in Africa.
And finally lets not forget another advantage. Unlike the middle east, African countries can take advantage of their heritage of English and French from colonial times, which makes it easier for them to connect to the global economy.
The biggest religion in Africa isn't islam, it's Christianity. Meanwhile, the biggest religion in Asia is Islam and it does just fine. The middle east's problem's aren't religious, they're political. Nationalism and geopolitical conflicts get wrapped into the most convenient us vs them wrappingpaper available, in the middle east it's often religion. But let's be frank here, Saudi Arabia and Iran aren't in conflict because they believe in a radically different way of religious life.
Your stuff about unification conveniently skips over the part where China sped past every other poor country in large part because it was unified and could move in one direction.
Rwanda is tricky... it's probably home to the absolute worst tragedy in my lifetime. 70% of a peoples was eradicated. Beyond that, it's still dirt-poor, 90% of the population is engaged in subsistence farming, 80% live on less than $3 a day, 60% less than $1.90. I assume you're referencing to economic growth which has been really nice, but it's tricky to see it separate from the foreign aid which represents 30-40% of the budget. It's not particularly hard to improve income levels from $1.90 a day to $2 if you're pouring in $100 of foreign aid per person per year and lots more financing. (a great playing ground for Chinese companies to build an economy indeed.)
Beyond that, there are 25 different countries who've had at least 75% of the average growth rate of Rwanda in the past 10 years, its economic growth has been great but things have actually gotten quite a bit better in Africa across the board. When Rwanda's foreign aid was temporarily cut a few years ago after accusations of aiding rebels the growth rate halved.
I don't see the Rwanda (0.9% of Africa's population) necessarily as a model for the rest (99.1%) of Africa.
Agreed on all your other points.
I particularly like this one: http://twigafoods.com/
We're so focused on solving the middle class problems in my country (India) that we've forgotten about the problems lower class people serving the middle class go through.