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Writer's pictureNado C

First Blog - Tech Start Ups in Africa - originally published in 2013

Saturday, 10 August 2013

Tech Start Ups in Africa  On this post I will be discussing tech start ups in Africa.  This are technology start ups  I will look into if am going to emerging countries In Africa . Study their trends before making a move, know your market first .  Culled from mash able website  Gloo.ng - a lagos retailing website .what does this website do ? a retailing website . you sit back at home and make your shopping list It delivers it straight to your door steps. Just like ocado in the UK  Price check - now this is a start up I admire cos I use comparison websites a lot to get bargains . This website simply compares items such as mobile phones, video games ,DVDs etc  Iroko partners - last 5 years video clubs was the norm back home. Now Iroko simply copied an European model of Netflix and lovefilm believe me 6 million users from 178 countries boi that ain't some small beans . The traffic on this website will be huge  Spinlet- a Nigerian website You can download naija musical from Dropifi- I admire this Ghanaian tech gurus. Just watched them on CNN inside africa users can monitor data according to industry statistics and also respond to messages based on analysis from the trafrom social network like Facebook and so on M-Pesa-  the mobile money transfer service that is used by over 60% of the Kenyan population.  It is also home to the iHub, it allows You to make mobile payments  online BongoHive-  In Zambia, there is no existing tech community.  BongoHive is an innovative technology centre located in lush aka . Concentrating on developing apps for our mobile smartphones. this centre is one to look out for .  Vconnect -featured recently on Forbes as an online search directory for business in Nigeria. Believe me, when big techs like google or yahoo will buy this guy out. Say You heard it here first . With over 700,000 business registered on this site.  Taxi rank- a south african comoany that makes life easy by comparing quotes fro, different taxi companies.  Njorku - a job listing website that focuses on jobs in africa . Jumia - an online retailer in Lagos Nigeria, currently dominating the e commerce retailing market in Nigeria . Konga - This online retailer is like the Amazon of Nigeria , with the biggest online shopping Mall ranging from different products  Most enterpreneurs are scared of funds,where will it come from. Do You have a business blueprint , do You have the idea ? Don't call it stupid , once it's applicable to solving life problems it is usable . By 2040 Africa's one billion people will have a large estimate of working class age population with a greater number of them coming from the young vibrant consumers .  Now stop  Ask yourself , can it be done and will it be done ? Oh Yes it can be done with the  new surge in demands on smartphones in emerging countries . To be honest You don't need a desktop or laptop this days to do run a business well Africa's broadband speed isn't that great but it will grow . We are growing . if Nigeria's broadband speed increases  better than it is at the moment ,everything will go online  believe me . just like Europe , America and Asian economies they once passed through this stage .  my mate mentioned this on course of writing this blog, He said soon everything offline will be online . So far e commerce seems to be working with a steady baseline in lagos. Medium class users of this services want more. Demands out weighs the supply What does it take to create an e commerce website - You are simply creating an online store and the basic requirements are : A shopping cart Payment Gateaway Merchent account A good Logistics plan Client Management E commerce can be applied in terms of services that help the end user(customer) acquire a service with less ease and stress with the use of IT - So think of all the services offered in the local traditional African market can this be translated online and the suppliers pay a certain fee to maintain this e commerce business - A company like Paypal a sufficient tool in making swift payments with email, mobile phone and bank details to family,friends and business colleagues . A local developed payment e commerce website can be beneficial if properly managed and promoted . This business can offer relief to traders and business people in Africa both in the rural and urban areas . Take a fashion start ups for instance , this gives the customer the upper hand in making their choices on products in the comfort of their own home to be delivered to their home like Jumia and Konga . This services are still opertaing in the west Lagos . We have 36 states in Nigeria to cover . So do the math . Can this business be promoted and developed in Nigeria . I think they can How about Taxi business?  can You book Taxis in the comfort of your bedroom or in the toilet . This i currently running for for residents in Abuja / Lagos with companies like TAxi Park , Another technology development of the trend is Apps, with App store/ googles play store recently available to the Nigerian Market . Apps meant for Africa- Nigeria is another moving trend in the IT industry . But Nigeria lacks the expertise in Application developers in the the market . This will be anogher boom when it enters the market , as big Silicon valley coporations like google , facebook, Amazon , Apple,Microsoft etc will want to buy out this services , We all know the story of Waze the Isreali social and traffic navigation app which was recently acquired by Google .  Now this are emerging African economies that has developed in the last decade Kenya, Uganda , Tanzania , South Africa , Nigeria, Ghana , Senegal , Kenya, Ethopia, Zambia, Botswana , Angola and Mozambique  Main catalysts of the African consumer market factors that play an important role in the evolution of the African consumer market include: population growth, urbanization rates, falling poverty levels coupled with an emerging middle-class, improvements in the business environment, increased levels of trade openness, and technological innovations  Population growth and urbanization: The African population is growing at 2% per annum. The continent’s total population is therefore projected to increase by 50% from 1 billion in 2010 to over 2 billion by 2060. At the same time, the percentage of Africans living in cities is expected to increase to 50% in 2030 from 37% in 2009.  Poverty reduction and the emergence of the middle class: With high levels of economic growth across the continent, poverty levels as a percentage of total population are forecast to decline to 20% in 2020 from 48% in 2008. In turn, the “middle class” (i.e., people earning between USD2 and USD20 a day, in real terms) is expanding in Africa. In 2010, 34% (313 million) of Africa’s population was considered to be middle class3. This figure is projected to triple to about 1 billion people by 2060. The combined effect of poverty reduction and middle-class expansion provides huge potential for greater spending in the consumer goods market. Business environment and lower trade restrictions: An improved business climate and political stability will likely attract global investors to African markets. In addition, greater trade liberalization between African countries and their international partners will reduce the cost of doing business and increase the availability of consumer goods in Africa. Together, this will both reduce the cost and increase the variety of consumer goods purchased by the emerging middle class. Use of technology: By end of 2012, more than 50% of Africans (about 735 million people) will own a mobile phone, making the continent the fastest growing cellular phone market in the world and the second largest market by number of connections after Asia4. By 2030, almost all Africans will own a mobile phone. This technological innovation will enable companies to reach existing and potential customers through marketing and other promotions via their mobile phones. Furthermore, the increased use of mobile phones for banking transactions may boost demand for consumer goods, especially in rural and informal markets thereby shrinking the shadow economy. Challenges to Increased Consumer Spending In spite of the substantial growth prospects for consumer spending, key challenges remain, with regard to market structure, distribution channels, and level of skills. Market structure: Africa’s consumer market is heterogeneous and highly segmented. Due to different income levels between countries and within countries, and due to cultural, geographical, and language differences, the behavior and spending power of African consumers vary widely. Foreign companies and retailers wishing to penetrate the African market will therefore need to take into account these differences in developing their products and marketing strategies to suit the needs of particular segments of the market. Tailoring products to customers’ needs and decreasing costs in order to compete with local companies, are among the alternatives that larger foreign companies can use to overcome this challenge. Distribution channels: Companies must also confront the challenges of poor distribution channels and underdeveloped transportation and other infrastructure services in order to gain access to customer markets. Strong sales networks, including direct-distribution and wholesale, would need to be developed in order to penetrate consumer markets and gain market share. Level of skills: Recruiting well-trained employees with experience in marketing is another key challenge facing retailers. The current dearth of skills across Africa is worrisome, and reversing this trend may require massive investments in training, especially in business related skills. In order to achieve long-term success and viability, companies may therefore need to initially rely on international staff whilst investing in training of local agents to build capacity, mainly through apprenticeship programs. Overcoming these challenges will be costly, but over the long-term the benefits will likely outweigh these costs. From a policy perspective, the authorities will need to devise better policy instruments to better deal with the potential impact of inflationary pressures that may be fuelled by a rise in excess consumer demand. Culled from African development bank  Ok You have been nursing that ambition, You live in lagos and You need to start from somewhere to climb that ladder, don't panic believe me there are local and international venture capitalists looking for You. Knowing Nigeria's bucreatic nature in implementing and boycotting ideas there are still some few technocrats that wants to invest heavily in technology . Do you have an email address , be persistent , talk to a mentor, talk to someone in tech that idea can be used than wasted . Have a business plan, search for a good investor and organise a great team in setting up this idea . Recently Tony Elumelu , the Chairman of Heirs Holding and Tony Elumelu Foundation increased the grant for tech start ups in Nigeria . The firm provides $5000 for early stage start ups. Investments in tech start ups will increase in the next decade in Africa . Some funding companies that can be researched for funding: Omiydar networks - a philanthropic investment company created by e bay founder and wife set up to help people improve their life  Kickstarter -a home for everything this firm provides support for beaming and aspiring entrepreneurs . It is a collectively joint ownership program where investors back your idea ands best in it  500startups - this firm provides early seeding funds up to $250,000 can be provided in funding with also mentorship This five venture capitalist concentrate more solely on Africa( Adlevo Capital, Inter Capital , Matamba Anonaka Technology Holdings, Sawari ventures , Investment AB Kinnevlk (source - Chris Tredger , IT news Africa) Start Up Venture capitalist exist in the US and UK . US venture capitalist will probably be more willing with self made start up investment millionaires looking to diversify their investment porfolio - look at startups.co.uk/venture capitalist Siliconrepublic/startups Savanah Funds - a seed funding company concentrating mainly on sub saharan east Africa . They offer accelerator programs for entrepreneurs to build a company and sell their products Yet , there are still some challenges faced for start ups in Africa as listed below: Product education Pioneering a new market culture relevance limited internet search limited budgets So how can You boycott this problems at start up: Social media Peer influence Creative use of offline marketing The right thinking

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Rich Mixs
Rich Mixs
Feb 26, 2021

nice one, I have read your post. It’s extremely helpful for any advanced business personnel or for a startup individual. Nice article!


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