2016 Africa roundup: drone supply, VC, unicorns, exits and Zuck
Twenty-sixteen was a pivotal yr for African tech.
The continent’s IT scene attracted main funding, produced its first $1 billion startup, launched a nationwide drone supply program, and drew certainly one of Silicon Valley’s greatest icons to tour its innovation hubs.
This from a area that solely a decade in the past generated virtually no Google Information hits for tech. That definitely wasn’t the case this yr. Although Africa has but to supply huge startup earnings, IT IPOs, and even its personal dot-com bubble, it did register vital tech occasions over the past 12 months.
Jake Brilliant is a author and writer in New York Metropolis. He’s co-author of The Subsequent Africa.
Jumia Turned Africa’s First Unicorn, Orange Acquires DealDey
A torrent of capital and a notable acquisition boosted the worth proposition of e-commerce in Africa. In February, digital gross sales startup Jumia grew to become the continent’s first unicorn when it surpassed $1 billion in market worth after a $326 million funding spherical together with traders AXA, Goldman Sachs and MTN.
Based by Germany’s Rocket Web and based mostly in Nigeria, Jumia is deploying the funds throughout its 11 startups in 23 African nations. Its e-commerce platforms provide on-line companies starting from trend and employment to actual property. Jumia additionally launched its personal digital funds platform JumiaPay, in 2016.
In March, the African subsidiary of Swiss media and e-commerce firm Ringier acquired Nigerian on-line buying startup DealDey for an undisclosed quantity. This created exits (uncommon hereto in African tech) for Ringier’s preliminary traders. The transfer was a part of Ringier’s technique to spend money on 4 verticals inside Africa: classifieds, content material, digital advertising and marketing, and e-commerce. The Swiss agency shaped Ringier Africa Offers Group, a three way partnership with South African Silvertree Web Holdings Ltd., for the DealDey purchase and future market strikes.
Large Title Growth: Netflix, eBay, Uber, IBM
A number of notable tech names expanded on the continent in 2016. In January, Netflix went stay in Africa, accelerating from Zero-54 nations in a single fell swoop. This offered a problem to African VOD startup, iRoko, which countered with a number of of its personal strikes to enter new nations and produce extra proprietary Nollywood content material.
eBay expanded in Nigeria and Kenya in July by a partnership with on-line buying startup MallforAfrica.com. The collaboration launched an eBay Powered by MallforAfrica platform by which U.S. companies with a 300+ star score can promote. eBay will add 11 new nations to the partnership in 2017, together with Angola, Botswana, and Tanzania, in line with MallforAfrica CEO Chris Folayan.
Uber prolonged its product, nation, and metropolis attain in Africa in 2016. In June, we reported on the corporate’s testing of distinctive service choices on the continent not obtainable in a lot of its international markets. These embrace money funds, new security measures, and cell picture course apps.
Uber gained a homegrown rival in Kenya in 2016 with Safaricom’s launch of the Little app. Little’s entry has spurred a tit for tat competitors in Kenya’s journey hail market round value and product choices between Uber and the nation’s different viable digital-car companies. The largest winner to this point seems to be Kenyan shopper.
Large Blue additionally elevated its Africa presence in 2016. We reported in Might on IBM Analysis Africa’s venture to create a cognitive computing equal to Watson, dubbed Lucy, from its Nairobi lab. The U.S. blue chip large expanded that effort in August, opening a second analysis lab in Johannesburg, South Africa.
Zuckerberg Shock African Tech Tour
Fb CEO Mark Zuckerberg’s unannounced August/September journey to Nigeria and Kenya put the worldwide highlight on Africa’s rising IT ecosystem. In Nigeria he talked to startup heads (Lodges.ng, Afrinolly, and Andela), visited the Co-Creation Hub, hosted a Fb city corridor, and met with President Muhammadu Buhari.
In Kenya Zuck stopped by the iHub innovation area, reviewed the BRCK cell Wi-Fi gadget, had lunch with Kenya’s ICT Cupboard Secretary and met with native tech leaders together with Juliana Rotich and Erik Hersman. Fb, which has roughly 85 million customers in Sub-Saharan Africa, introduced no new initiatives, saying the journey was about “studying and understanding.” There’s definitely extra behind the scenes— most definitely a 2017 improve to Fb’s Free Fundamentals program, which at present permits customers restricted cell web companies free of charge in 17 African nations.
Drone Supply in Rwanda
All through 2016 we lined California based mostly drone supply startup Zipline’s partnership with UPS and the federal government of Rwanda to launch drone supply of essential medical provides in Rwanda. After a number of check rounds, Zipline went stay with this system in October, changing into the world’s first nationwide drone supply program at scale. It’s a business endeavor, with Zipline incomes revenues per supply. Zipline’s Africa drone operation additionally gained the eye of the White Home UAV initiative, which tapped the startup to check drone supply of medical provides to distant U.S. communities.
Interswitch IPO Projected and Delayed
In January, it regarded like there was the robust risk of Nigerian fintech agency Interswitch changing into Africa’s first public startup unicorn on a significant change. CEO Mitchell Elegbe didn’t rule out a attainable twin itemizing on the London and Lagos inventory change. One other supply mentioned the corporate’s bankers chosen an LSE IPO in This fall. The providing didn’t materialize however may nonetheless occur in 2017. In a latest interview, Elegbe mentioned the delay was on account of investor concern over Nigeria’s declining 2016 macroeconomic state of affairs and risky naira. On a attainable 2017 public itemizing, an organization spokesperson mentioned that “an IPO stays an possibility.”
VC: Incoming and Pan African
The continent continues to realize worldwide investments and is forming homegrown tech funding funds. Within the digital finance area, Y-Combinator backed Nigerian startup Paystack closed this month on a $1.three million seed funding from sources together with Tencent and Comcast, CEO Shola Akinlade confirmed.
The World Financial institution’s Worldwide Finance Company (IFC) additionally flagged extra funding for African startups in 2016 as a part of its $30 million Startup Catalyst Initiative.
Kenya’s iHub incubator introduced this month the launch of its new Africa Innovation Fund for startups. The elevate, focused at $10 million for Kenya and $40 million for different African nations, continues to be energetic, iHub’s interim-CEO Kamal Bhattacharya mentioned. This follows a market pattern of African innovation hubs shifting away from grant-based financing towards extra for-profit and funding oriented fashions, as reported right here.
So what huge actions are price watching in African tech in 2017? First, some failures. This isn’t precisely downbeat. Failing is an inevitable a part of the tech ecosystem. The continent’s IT sector has been on a a number of yr run of issues rising, increasing, gaining new funding. Some attrition and artistic digital destruction should be imminent.
On the flipside, it’s about time certainly one of Africa’s commercially oriented startups demonstrates notable earnings. Sure, over 2016 the continent confirmed it might probably produce unicorns, exits, entice huge VC, and even get near a significant IPO. However as Cameroonian IT chief Rebecca Enonchong as soon as advised me, “To be taken critically African startups have to win within the for-proﬁt international market.” Maybe some examples of that may emerge within the new yr.
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