Intro to African Tech Startups!
Not every successful corporation is a multi-billion dollar giant with offices on every continent except Antarctica or a hundred-year-old company with revenue equal to the GDP of a small country. Many successful businesses around the world are brand new, sleek, innovative companies known as startups. A startup is a company in the early stages of development, created by a small team to address a certain need that they have observed in the market. According to Eric Ries, the author of The Lean Startup, a startup is, “ a human institution designed to create a new product or service under conditions of extreme uncertainty.”
African startup ideas tend to focus on many of the products and services offered in other parts of the world which are not universally available, and these startups are planted in extremely fertile ground. While some successful startups in Africa have focused on the model of implementing services available elsewhere in the world in an African setting, other startups have focused on solutions to uniquely African problems. All of these successful startups, however, have a few things in common; these are, a vision for what the startup could accomplish and the problems that it could solve, a product that is actually useful and creates value in people’s lives, and a culture of innovation that refuses to let the competition find a solution first. The most successful startups are able to secure funding from outside sources, maybe even from sources outside of Africa like Silicon Valley venture capitalists.
If you are trying to develop an idea for your own startup, just remember that the best startups are the ones that not only identify a market need, but that also come from a desire to see something new in the world. Startups take a ton of work and investment, both of time and money, so it is important to know that when you start a startup you are totally committed, both strategically and emotionally. This means not only do African startup ideas need to be distinct from startup ideas anywhere else in the world, but your own startup should be totally informed by your own experience. One of the best ways to come up with an idea for a startup is to just try and notice when something could be done better or when you find yourself wishing that a service was provided. Then once you have observed some ways that the world could be improved, you can do research to see how profitable your startup idea would be and if it is even feasible.
African Entrepreneurs Success Stories
VConnect is an African startup based in Lagos that uses the internet to connect businesses to service professionals in an efficient, modern way. Like many startups, they were “born out of necessity.” Actually, those are the first words on the “about us” section of their website. VConnect demonstrates a deep understanding of how market needs are the perfect place to step in with an innovative startup. According to the company in an article in Forbes, “70% of the population take five days to find a service provider and still run the risk of bad quality of service or paying exorbitant prices.” Talk about a need! VConnect has since stepped in and has serviced over 100,000 companies in Africa. VConnect is an example of taking a similar idea to already existing startups in the west like Angie’s List, updating it for an African setting, and seeing massive growth with potential for even more growth because the need is so great in Africa. VConnect is almost certainly poised for success, because, let’s be honest, who wants to wait days for something that should only take minutes?
Hey! Don’t forget we are a startup too! WaystoCap saw a need for a company that facilitates business dealings for other African companies, specifically in the buying and selling of goods. WaystoCap started in 2015 because we observed that small businesses in Africa often lack the tools for efficient buying and selling of merchandise. Since WaystoCap’s inauguration, four major investors have stepped up, including Silicon Valley investor Y Combinator, which has only invested in one other African company. Other investors include Battery Ventures, a global investment firm that, “seek[s] out extraordinary businesses and leaders.” WaystoCap is one of many African tech startups that has created an innovative digital solution to a physical problem. WaystoCap was founded in Morocco, but now has a satellite office in Benin as well. This signals a desire to expand and find new markets, which is essential to successful African startups.
Unlike WaystoCap and VConnect, Sliide Airtime is a startup that focuses on individuals instead of businesses, which could be risky in a place where most people don’t have the ability to make the same kind of high-value purchases that businesses can. Sliide has managed to avoid this potential pitfall by offering something for free rather than for money. Smart, right? But this doesn’t mean that they don’t make money, it just means that their real customers are not the users of the app, but the corporations which pay to advertise on their site. Sliide Airtime is an app that provides its users free mobile browsing data in exchange for their interaction with branded content and news. According to Forbes, the company uses 65% of its advertising revenue to buy mobile data for its customers. The app is extremely popular in Nigeria, and the company is looking to expand into other countries. This is another example of seeing a need, understanding people’s desires, and coming up with a brilliant business plan to fulfill the need while making lots of money. Sliide has won multiple awards, including Most Innovative App from the Mobile World Congress and Africa’s best app at the Apps Africa awards.
One of the most common ways for startups to grow, especially in tech, is hold off on monetizing so that the user base expands rapidly. Then, once the startup has become an essential part of many people’s lives, the company monetizes. This strategy allows the startup to ink the best deal it can because it boasts a large user base. Vendo is one company that is taking this approach. It is a Moroccan based company that provides an e-commerce search engine in Morocco. Vendo calls itself, “the first product search engine in Morocco” and prides itself on a slick user experience that has continued to attract more and more users each month, to the tune of about 100,000 users each month. With a valuable service in place, the company is now focusing on how to start making money. While it received $265,000 USD in funding earlier this year, monetizing will be the only way for the company to move forward. If Vendo can figure out a way to monetize without disrupting its vaunted user experience too much, it will be a huge success and could lead to growth into new markets.
MeQasa is a real estate startup based in Ghana which connects home buyers with real estate agents via the internet to streamline the messy process of home buying. MeQasa is stepping into this market to address the lack of reliable information about real estate in Africa. They aim not only to make reliable information available to everyone involved in the real estate purchasing or renting process, but also to aggregate all of that information into one easily searchable platform. MeQasa hopes to eventually expand beyond Ghana, bringing its all in one real estate services to the whole world. Before that happens however, the user interface on their website will probably need to improve as their cluttered homepage cuts against the minimalist design that has been favored online in recent years.
Sky-Garden is a Kenyan company that provides a platform for small businesses to get involved in e-commerce. Following the pattern of companies that attempt to facilitate business connections because of the lack of pre-existing networks in Africa, Sky-Garden is solving a known problem: historically, only the largest companies have had access to e-commerce, while smaller companies that could not afford their own websites have been shut out. Sky-Garden makes it ridiculously easy to put a business on the internet, you don’t even need a computer, just a smartphone with the Sky-Garden app for merchants. With a simple interaction on the app, your products can be listed on their site. Sky-Garden also uses their own delivery network – at no cost to the merchant – so products get where they need to go complicated logistics. Sky-Garden has edxperienced explosive growth in their first year, with 25 percent month over month growth since March in order volume.
Farmerline is a Ghana based startup that aims to help small scale farmers by connecting them to modern resources. Farmerline to date has registered over 200,000 farmers who can now gain access to the information, inputs and resources that Farmerline provides. Farmerline is similar to other startups that strive to help small merchants, like WaystoCap and Sky-Garden, except that their focus is entirely on farmers. Farming is one of the oldest industries in Africa, and also one of the professions that needs the most efforts put toward modernizing so that African agriculture can be brought up to the standards of the rest of the world. The usefulness of Farmerline has been recognized internationally, as it won the King Baudouin African Development Prize, becoming one of just three startups to win the prize, Farmerline was also selected to join the Switzerland based Kickstart Accelerator, which should help its development massively.
LifeQ is an example of an African startup focusing on solutions to a global problem, rather than a uniquely African problem. This means that LifeQ will have a much larger room to grow into, specifically the massive field of healthcare. It also means that LifeQ will have to compete with some of the massive companies already occupying the space. Like any good startup, however, LifeQ has the ambition to “go for it”, and the belief in themselves to not back down. LifeQ uses sensors on the outside of the body to provide extremely detailed, personal health information without exorbitant costs in order to accomplish their mission to allow, “people from all walks of life to enjoy optimal health.” LifeQ will be an interesting African startup to watch, as thus far it has been successful, but it needs to do more to show it can really punch with the heavyweights in the global healthcare market.
PayPass is a startup that allows individuals to create their own events and then sell tickets for those events. Their slogan is, “Worry about the event, we take care of the tickets” and that is a fairly accurate summation of the service that they provide. This enables performers and event planners to seamlessly distribute tickets for their event. Paypass is a Nigerian startup that launched in May of this year and has already had impressive growth. PayPass focuses on college events currently, and also is only based in Nigeria as of right now, but the innovative platform has a solution that could be replicated all over the world. In order to grow like it wants to, PayPass is going to need to raise some money, as they are currently self-funded, but that should not be a problem for a company that seems poised for explosive success like PayPass.
Everyone wants food, and fewer people want to go out and get it. Tupuca has recognized that fact, and started Angola’s first food delivery platform. On Tupuca, 20,000 users have access to food delivery from over 120 restaurants in Angola in the palm of their hand. Like any successful startup, Tupuca is not content with staying where it is, but wants to keep on growing, possibly expanding into other countries or into new fields, like grocery or pharmaceutical delivery. All of this fits into the company’s broad and ambitious vision to be the leading company in the field of home delivery. Perhaps most impressively, Tupuca has demonstrated the ability to fight through adversity, as it lost the Seedstars World Startups competition in Angola in 2016 but came back to win it in 2017, showing off their willingness to change and take input well, both extremely important traits for any Startup.
How WaystoCap Can Help You Build Your Startup!
WaystoCap is a platform that supports importers and exporters in Africa by providing experienced, comprehensive consulting and referrals to entrepreneurs. WaystoCap is the first B2B marketplace in Africa dedicated to international trade, and makes available a dedicated, in-house team which boasts many years of experience in international trade.
We are experts in the African market, which means we know and understand local laws, regulations, and trends in various industries. WaystoCap has created a unique opportunity for Africans to build community by trading with other African and international enterprises.
WaystoCap ensures smooth international transactions by providing assistance in a variety of areas from shipping practices to evaluating product quality, and securing insurance for your imports and exports. Our platform creates access to the highest quality products, vetted businesses, and to the most affordable goods available for trade on the African continent. By using our platform to research prices, find business partners, and source quality products, you will save time and money – which means you’ll have more time and money to spend on your business!