Note #9: March 27 - April 7 2017
Context and Thoughts
A few weeks ago, I had the opportunity to talk with the Geeks on a Plane and 500 Startups contingents on the South African leg of their Africa tour. I’m enthused to see the continued interest in Africa from top investors, and the growing connections between Silicon Valley and Africa.
Since 500 Startups is actively investing in Africa, I’ve started tracking their portfolio companies in Andy’s Accelerator-Funded African Startup List (see the “500 Startups” tab), in addition to adding a few more Y Combinator companies that were missing from my 2016 list. (Thanks to Monique from 500 Startups for providing the information on their African portfolio companies!)
According to a Venturebeat article from the start of this month, Africa is the next frontier for VCs… I agree with the sentiment, but is Africa the “next frontier” or specific African countries? After all, Africa is not a country, and the African Union has yet to enable the kind of single market that the European Union has been enjoying. (here’s an interesting recent report on the EU’s e-commerce “digital single market” if you’re up for reading more on how the single market has worked out for European e-commerce startups) The Disrupt Africa 2016 Tech Startup Funding Report points out that although 146 African startups raised over $129mm in funding during 2016, startups from just 3 countries (Kenya, Nigeria, and South Africa) raised nearly 75% of Africa’s 2016 startup funding.
That said, I liked the article overall: specific insights provided throughout, and it bears testimony to the ingenuity and persistence of successful entrepreneurs across Africa. It would be helpful to see an article analyzing the specific African startup geographic opportunities a bit more: ie. startups building for a specific country, startups building for a broader African region, or startups building for the global market. Each opportunity has different headwinds and tailwinds involved. Probably worth plotting that out in more detail sometime.
Finally, in the African energy tech sector, how about that off-grid solar? It’s been 4 years since I first reviewed M.KOPA in WIRED, and since then pay-as-you-go financed off-grid solar has been growing like crazy in Africa. Off-grid solar has the potential to be as disruptive to the energy markets as the cellphone was to the landline market (“the leapfrog infrastructure of the decade” according to the FT), and with the added potential to integrate wi-fi hotspots and cross-sell data & entertainment services, off-grid solar systems have the opportunity to be the data, entertainment, and energy hubs of emerging market homes.
Accion [US] Frontier Inclusion Fund has raised a $141mm fund to invest in emerging market fintech startups, fund to be managed by Quona Capital [US] link
Facebook continues their rollout of wifi hotspots, laying down fiber, and testing Aquila (solar-powered Internet access drones) across Africa to continue African user growth (up 42% since 2015, to 170mm African users) link
Uber provides some details on how they adapt to local market conditions in the various African countries type operate in link
Templeton Emerging Markets Group [US] has published a report on key issues in the South African economy (predating the recent credit downgrade) link
Deals, Startups, and More
Online ticketing company Quicket [ZA] receives funding round from KNF Ventures / Knife Capital [ZA] (terms undisclosed) to expand into additional African countries link
Mobile microloan startup Alternative Circle [KE] raised $1.1mm from Creditinfo Group [IS], plans Spring 2017 launch using Creditinfo’s credit risk profiling technology link
Sendy [KE] partners with the Kenyan National Election Agency to allow ballot delivery and casting via drone (!) for the upcoming national election in August link
Helpful context: These QR code solutions are growing in Africa (originally pioneered by Snapscan [ZA]) allowing customers to complete credit/debit card transactions by only requiring merchants to display a QR code to customers and a phone to receive payment confirmations (even a minimal cellphone can be used for this, since confirmation is usually via SMS), and customers to have a smartphone w/ camera, thereby removing the need for an expensive credit card point-of-sale (POS) terminal.
Telemedicine startup ConnectMed [ZA], providing virtual doctor visits by fully licensed doctors, expands into Kenya link