The future of African tech startups and companies leading the way.
The success if Silicon Valley cannot be understated. Many cities are trying to replicate the model to create new technologies that will be recognized globally. A number of cities in America and beyond have successfully replicated the Silicon Valley model. For instance, in cities such as Boston, new innovations have been received well have been launched. In Africa, the number of IT start-ups is on the rise. Many young Africans are working to create applications and games that will gain mass acceptance. In Kenya, the government has set aside billions of dollars to construct the Konza City which many expect to be the next Silicon Valley from Africa. In South Africa, a number of technology incubation hubs have been created. In addition, in the last 5 years, venture capital funds have invested more than $500 million in African start-ups. In this article, I will highlight a few success stories from African tech scene.
Jumia is an e-commerce company with a presence in more than 7 African countries. The company, which was established in Nigeria now employs more than 3000 people, directly and indirectly. From Jumia, a client can buy all types of items such as mobile phones which are then delivered at home. Globally, the company uses the same model as Amazon. The company, which has so far received more than $211 million in investments from Goldman Sachs, Summit partners and Rocket internet. It has not yet gotten to profitability. This is attributed to a number of reasons. For instance, in Africa, people do not have home addresses which makes it difficult to deliver the goods. This is coupled by the fact that African roads are relatively bad which increases the delivery costs.
For many years, the Nigerian movie sector (Nollywood) has become a success story in Africa. Other countries such as South Africa have tried to dethrone Nigeria in vain. With the increasing demand of African entertainment products, Iroko has started what is now said to be the African Netflix. People from all over the world are now able to watch African movies and videos on a subscription basis. The company has received more than $16 million from Tiger global management and is now expanding internationally.
OLX, owned by Naspers is Africa’s version of craigslist. The company has received millions of dollars to set offices in most African countries. Using the site and the app, one needs to only take a picture of the item they want to sell and then uploading it to the internet. Within minutes, the item goes live and millions of people who need it can buy. In all the countries it operates, OLX is the leading website according to search rankings by Alexa. The company has spent millions of dollars in marketing though it has not broken even. According to the South African CEO, the company wants to position itself as a key product based search engine.
Kopo Kopo (Kenya)
In most African countries, mobile penetration levels are very high because of the affordable handsets. As a result, people now prefer using mobile phones for transactions. Globally, m-pesa has become the largest mobile money company. Kopo Kopo therefore helps Kenyans transact using their mobile phones. The company has so far received more than $3.6 million in investments from Gray Ghost Ventures, Javelin Venture Partners and Khosla Impact.
Take A lot (South Africa)
Take a Lot is South Africa’s largest e-commerce company with funding of more than $100 million from Tiger Global Management. The company sells all types of products and ships them to customers. While it is yet to get to profitability, the company has gained a market share from Kalahari which was one of the premier e-commerce companies in Africa. The company employs more than 500 people in South Africa. It has also become a valuable player in retail distribution by partnering with companies such as Microsoft and Samsung.
There are thousands of African tech startups but the fact is that only a very few of them will survive especially now with the entry of Silicon valley companies such as Uber. Other companies that have a potential to change African tech landscape include: Konga (Nigeria), Mellowcabs, and Snapscan.