Startups · Entrepreneurship

Why do you think Africa cannot produce global scale startups?

Ravi Shah Sr. Software Engineer at Capgemini

December 2nd, 2016

As someone familiar with Nigerian Internet startup founders, I was quite disheartened to read Leila Janah, post ( where folks were quoted saying they would "rather fund an incubator for less glamorous businesses, like gas stations and plumbers."

A continent with 1 billion people and, 110 million connected online (growing in triple digits) I would like to believe they can produce companies that can have product market fit before deciding to scale up and probably open offices in the west. .e.g US.

So my question is, do you believe Africa can produce global scale startups?

Bianca Lee Founder at White Rose Marketing Solutions

December 2nd, 2016

Yes, I do believe that it is completely possible for Africa to produce global scale start ups.  Africa is a continent with each country having a different set of circumstances.  And 'global scale' is quite a subjective measure but there have been several start ups that have created scale within Africa and abroad.   

That being said, Africa struggles with start ups due to the lack of data.  Investors need data to project the future value of their investment.  Start-ups usually don't have the capacity to create the data needed to sell investors.  So you are stuck with a limited set of investors who understand the African opportunity.  And with the lack of funding, many companies don't have the support they need to drive their brilliant, innovative ideas to success.

Anonymous a student who is innovative

May 9th, 2017

Africa is capable of producing scale startups,if the education curriculum's which are been taught in our schools are changed to suit the era we are.

David Austin Relentless problem solver and innovator.

May 9th, 2017

Scale takes investment and investment is given based on trust. Fix the trust challenge (which is huge in Africa) and then, and only then, can you scale. This requirement holds true at all stages of business development, whether scaling from 1 to 10 customers or scaling from Africa to the world.

Darnley Howard President/Principal Consultant, Advansa International

December 2nd, 2016

It's early in the game but the signs are good. There is a small but growing community of African startups who are attracting investor attention at events like Angel Fair Africa. Google has a presence in Nairobi, Kenya. Steve Case and Mark Zuckerberg have made exploratory visits and were impressed by what they saw. There are business incubators supporting startups in Ghana, South Africa and other countries. Africa Internet Group, a network of e-commerce companies has achieved Unicorn status ($1 billion valuation).

African companies face serious challenges--poor infrastructure, lack of venture capital, but at least a few will be able to fight through these obstacles and achieve scale.

Ema Chuku Product Developer. Founder.

December 2nd, 2016

It's not the question of "why cannot they" or "Do you think they can..."

They are producing. But not at a rate that the mainstream media would broadcast. I believe Zuckerberg was in Nigeria some couple months back due to interest in this field.

The real problem hindering growth of production (in any field) in Africa as a whole is corruption (Nigeria specifically - greed), which then ties itself to poor infrastructure, and community support. It's not the talent or skills, because many of them venture out to countries like U.K. and build success there.

Mark Straub Cofounder/CEO of Smile Identity, Cofounder Khosla Impact, 10 yrs in VC, Global Fintech Relationships

May 9th, 2017

Yes, I absolutely believe Africa can (and is in the process of producing) global scale startups. They may have a mix of local and foreign talent, but companies like Andela, Branch, Tala and Flutterwave are building market leading companies that are now expanding across the continent or in Branch & Tala's case, across the world.

Financial services and education are sectors where African-based or African-focused companies are leapfrogging startups from other geographies because they are building services and applications that obviate the legacy ways of doing things.

If you have mobile money you don't need a magstripe card.

If you have personalized learning you don't need a classroom.

If you have pan-African bank APIs (like Flutterwave) you don't need traditional ACH.

Just as China was poorly understood 20 years ago and India was poorly understood 10 years ago, Africa is poorly understood and underestimated today.

Yes, there are many challenges, and 53 different governments, lots of corruption, poor physical infrastructure and thin financial markets. But as the person who wrote the question stated, there are a billion people, over 100M online and rapidly increasing smartphone usage.

The smart money bets on the future and Africa is the future, not only for traditional PE investors but also for tech in specialized categories where Africa's lack of legacy solutions leaves opportunity for better, faster, cheaper ways of doing things.

And what works in Africa can translate to India, the Philippines, Indonesia and even part of Latin America.

At Smile Identity, we're helping to solve the trust gap by building identity solutions that reduce friction in KYC collection and increase confidence in user identity for banks, telecoms, financial services and shared economy startups. We look forward to helping build the Africa of 10 years from now with a number of exciting global scale startups.

sola bamgboye Co-founder & CEO The Leadership Centre NG, Entrepreneur, Leadership Consultant & Trainer

May 9th, 2017

I strongly believe Africa can and will produce global scale startups. The reason why it might not look so possible right now is because Africans are still focused on producing solutions to the various problems which are unique and prevalent in Africa.

However, some of these same solutions will eventually (very soon, I hope) find relevance on the global stage

Darnley Howard President/Principal Consultant, Advansa International

December 4th, 2016

They want to work their way out of poverty and have found that massive amounts of foreign aid have not done the job. There is a desire among many Africans to take advantage of the energy and resources of the private sector. Entrepreneurs growing companies are part of this movement.  DARNLEY W. HOWARD President/Principal Consultant Advansa International (c) 781/350-0610

Nigel Stonham ROCKst!arist at ROCK st!artist

December 3rd, 2016

Or, do they themselves believe they can .....

Darnley Howard President/Principal Consultant, Advansa International

December 4th, 2016

As in any society, there are those who are entrepreneurs and those who are not. There has always been a lot of entrepreneurial energy in Africa. The challenge is to create the conditions for these entrepreneurs to grow their companies in a meaningful way.  DARNLEY W. HOWARD President/Principal Consultant Advansa International (c) 781/350-0610