There is no mistaking certain signals, even if they are weak ones, like the recent nod from the Israeli research centre StartupBlink to Africa’s growing prominence in the global start-up ecosystem. Providing research and analysis on the world’s best innovation ecosystems – through its annual Global Startup Ecosystem Index – StartupBlink’s experts recently ranked Lagos 122nd out of 1,000 cities covering 100 countries. The report evaluates each city based on its ability to create an environment that fosters the growth of digital enterprises.
Nigeria’s commercial capital has thus been named the best location in Africa to launch a start-up. Lagos, with a population of more than 17 million, overtook Nairobi as the top-ranked African city in the 2021 ranking, after the Kenyan city fell 20 spots year on year, to 136th place. In the Middle East and Africa region, both Lagos and Nairobi outranked Cairo (180th), Abu Dhabi (169th) and Riyadh (192nd), cities that have set their sights on attaining global tech hub status.
From its headquarters in Geneva, Switzerland, the World Economic Forum (WEF) is also sending strong signals about Africa’s start-up potential. On 16 June, seven African start-ups were included in the forum’s 2021 cohort of 100 Technology Pioneers: 54gene, mPharma, Cambridge Industries, FlexFinTx, Kuda, Moringa School and Sokowatch. Since its inception in 2000, the annual selection of tech start-ups has honoured the likes of Google, Airbnb, Twitter and Spotify.
54gene (Lagos, Nigeria/Washington, DC)
54gene’s chief executive is Abasi Ene-Obong, a 35-year-old Nigerian doctor.
His company, which specialises in sequencing African genomes, grabbed the world’s attention in 2020, when it played a pivotal role in launching Covid-19 mobile testing laboratories in Nigeria, even though the initiative meant the company had to pause its international expansion plan.
After raising $15m in April 2020, Ene-Obong’s start-up is sure to get back to its core business as soon as possible. A geneticist by training, he holds degrees from Imperial College London and the Drucker School of Management of Claremont Graduate University (United States). 54gene’s primary goal is to harness genomic data to help researchers quickly develop treatments tailored to the genetic characteristics of Africans.
mPharma (Accra, Ghana)
Another company that has come to the aid of national governments as the Covid-19 pandemic rages on is mPharma. The start-up, co-founded in 2013 by Gregory Rockson, and currently operating in eight countries, helped furnish laboratories in Ghana and Nigeria with molecular diagnostic equipment for Covid-19 testing through a special $3m fund. Joining a consortium of private-sector players, mPharma donated free vaccines for healthcare workers to the Ghanaian government.
The start-up, which manages prescription drug inventory for pharmacies and their suppliers, has raised a total of $53m since its founding and acquired Haltons – a pharmacy chain in Kenya – in 2019 for an undisclosed amount. mPharma now has plans to expand its chain’s footprint to Ethiopia.
Cambridge Industries (Addis Ababa, Ethiopia)
Cambridge Industries, a start-up headed by Samuel Alemayehu, is at the forefront of technological innovation in a host of areas such as insect farming, waste-to-energy power plants and recycling. The firm joined forces with China National Electric Engineering Company to construct Ethiopia’s first waste-to-energy plant, a project that was fully financed with generous backing from the Ethiopian government. The facility is located next to Koshe landfill, just outside the country’s capital, Addis Ababa. According to Cambridge Industries, the plant is capable of powering 25% of the city’s households all the while eliminating over 80% of the municipal waste delivered to it.
With degrees in management science and engineering from Stanford University, as well as appearances at conferences hosted by Harvard, Alemayehu – the eloquent chairman of Cambridge Industries – is focused on maximising energy recovery to supply Addis Ababa’s residents with renewable power. The waste-to-energy plant is outfitted with magnets to recover metals for recycling, helps prevent the formation of toxic liquid substances (leachate) produced by landfills and converts ash into bricks for use in construction.
FlexFinTx (Harare, Zimbabwe)
Blockchain is as fascinating as it is complex, but for Victor Mapunga – the Zimbabwe-born co-founder of FlexFinTx – and his Indian business partner Haardik Haardik, the technology – essentially a decentralised system that allows users to verify transactions – also provides a way to create and store the digital identities of some 400 million Africans who lack official forms of identification. The information is accessible without the internet to boot.
The process is straightforward: users can register to set up their identity by sending a WhatsApp message to the start-up’s chatbot, which guides them through the remaining steps. Users can then retrieve their information through a blockchain called Algorand.
The FlexID digital identity wallet offered by the Harare-based company connects users with a network of partner financial institutions and government agencies, allowing them to open bank accounts, buy insurance policies and sign employment contracts.
Founded in 2018 and a member of the Decentralised Identity Foundation since February 2020, FlexFinTx is helping to develop decentralised identity standards alongside ‘big tech’ firms like Microsoft and IBM.
Kuda (Lagos, Nigeria)
Back in May, Kuda – an online-only bank with ambitious plans to reach all Africans – marked the milestone of serving 1 million customers. Babs Ogundeyi and Mustapha Musty founded Kuda – initially known as Kudimoney – in 2016 to offer online loans.
Eventually, the company received a banking licence from the Central Bank of Nigeria and raised $36.6m from four funding rounds. Several notable investors have backed the start-up including Ragnar Meitern – a former managing director of Dutch bancassurance group ING – and Valar Ventures – a New York-based venture-capital firm with $1.2bn in assets under management.
To stand out from the pack, Kuda – which says it processed $2.2bn in transactions in February 2021 alone – has taken a page out of the playbook of other success stories such as Brazil’s Nubank, Germany’s N26 and the UK’s Revolut. These ‘neo-banks’ are different from their traditional counterparts in that they are digital only, offer great customer service and charge virtually no debit card transaction fees.
Moringa School (Nairobi, Kenya)
Founded in 2014 by Taiwanese-American entrepreneur Audrey Cheng and Kenyan techpreneur Frank Tamre, the Moringa School’s mission is reminiscent to that of US company Andela: teaching tech talent skills that meet the needs of African and international companies. Cheng has since stepped down from her role, though she is now an executive board director, while Tamre exited the company.
With learning centres in Kenya, Rwanda and Uganda, as well as more than 80 employer partners, including local and global companies (such as Microsoft, US advisory firm Dalberg and Mastercard Foundation), the start-up boasts more than 3,000 trained students and an over 85% employment rate for graduates. Courses cover software development and data science.
In 2019 and again in May 2020, Netherlands-based DOB Equity, an impact investor that has participated in funding rounds for Twiga Foods, Sendy Logistics and M-KOPA (an app that provides solar power to customers on a pay-as-you-go basis), sunk an undisclosed amount into the school.
Currently led by Meredith Karazin, the learning institution charges course fees of around $1,700 for a year of training and also offers financial aid for its students.
Sokowatch (Nairobi, Kenya)
Sokowatch, a start-up that sources goods for informal retailers, was featured in Fast Company’s ‘World’s Most Innovative Companies’ ranking for 2021. The firm founded by US-born entrepreneur Daniel Yu has proven that sound inventory management can translate into less waste, while putting more into the pockets of merchants, no matter their size – and all with the help of an algorithm.
Impressed by the start-up’s business model, which has attracted suppliers such as consumer-goods heavyweights Unilever and Procter & Gamble, Morocco-based Outlierz Ventures joined a seed investment round in 2018. Other prominent investment funds have since followed in the venture capital firm’s footsteps: East Africa-focused Catalyst Fund (backed by investors including Proparco and CDC Group) and 4DX Ventures, an American firm which took part in June in a $30m funding round for Egyptian logistics start-up Trella.
Sources: The African Report