On June 9-10, the GSMA Ecosystem Accelerator team had the chance to participate in the Afrobytes event which gathered start-ups, tech hubs, corporations and investors from the African tech ecosystem in Paris. Afrobytes is a platform dedicated to African Tech in Europe with a clear mission to redefine the relations between Africa and Europe through tech.
Here are 3 takeaways from those 2 days we wanted to share with you…
1. African tech hubs are the backbone of the start-up ecosystem
According to our research, there are currently more than 300 tech hubs across Africa. With the likes of Kenya’s iHub, Ethiopia’s Iceaddis, Senegal CTIC and Rwanda’s kLab participating in the event, we had the chance to hear the thoughts of some of the most active hubs in the continent.
Definitions of “tech hub” vary broadly, but tech hubs’ representatives we’ve heard all agree on one thing: it’s a lot more than a co-working space. Whether the core offering to start-ups is an incubation or an acceleration programme, leading hubs are only able to bring value to start-ups and developers if they are able to build a strong community of stakeholders: start-ups, investors, corporations, but also lawyers, experts or government representatives all working towards the same goal, solving problems using technology.
In Africa specifically, the popularity of these hubs seem to come from two key resources that start-ups are still struggling to access: funding and skills. Local tech hubs have the ambition to reduce that gap by offering a range of training as well as investor events along the year. Some successful examples include Rwanda’s local version of ‘Shark Tank’ called “Face The Gorillas” and driven by kLab, where start-ups can receive funding of up to $200,000.
Tech hubs as well as pioneer investors present at the event took the opportunity to call the broader African investors community for action. Their message was well summarised by Ibanga Umanah, a partner at Brave Venture Labs: “Many of the smart folks in Silicon Valley are already going aggressively after Africa”. By working with local tech hubs, African investors can have a head start when investing in the leading start-ups on the continent.
Stay tuned for our upcoming landscaping insight on African tech hubs…
2. African start-ups’ favourite platforms: USSD and SMS
Africa is often called the ‘mobile-first continent’ as populations and businesses have clearly leapfrogged directly to mobile without a “desk…top”. But mobile in Africa means a lot more than smartphone apps.
Start-up leaders we met and heard from at Afrobytes illustrated this very well. From the recently launched Mlouma (Senegal) operating a USSD platform to connect buyers and sellers of agricultural products, to the e-commerce giant Jumia (Nigeria) for whom SMS notifications are at the heart of its marketing and customer care strategies, platforms like USSD or SMS but also Voice are key for African start-ups.
Similarly, it was interesting to hear from ex-Viadeo Africa CEO Chams Diagne, that the now 40 million user-strong professional social network, initially struggled to enter the African market until they focused their approach on SMS and Voice.
While the feature phone era is slowly ending in Africa (Jumia’s Bertille Guitton shared that the largest Nigerian eCommerce platform is currently selling upward of 700,000 per month in the country with an average selling price dropping from $280 in 2013 to less than $99 in 2016), ubiquitous channels like the ones mentioned above still represent some of the best tools to reach the mass markets for local start-ups.
3. The enabling role of mobile operators
It was quite striking to see most panellists and keynote speakers at Afrobytes referring at some point to mobile operators, irrespective of the topic of the discussion: investment, tech hubs, mobile technology, impact business, or reverse innovation. Mobile operators play a central role in the African tech ecosystem – an enabling role.
After hearing Orange Group Deputy CEO in charge of Customer Experience and Mobile Financial Services, Marc Rennard, reaffirm the enabling function of mobile connectivity and mobile money for African start-ups, Orange MEA’s Aurélien Duval-Delort, explained how the group supports local innovation mainly through an open API (application platform interface) approach, a network of tech hubs, some in-house accelerators (Orange Fab) but also some direct investments (mainly through Orange Digital Ventures). Examples included the recently launched USSD API “#303# My Store” soon available across multiple Orange footprints in Africa as well as Orange’s recent 75M€ investment in Africa Internet Group.
“Collaboration with mobile operators is the way forward” explained Jumia’s Bertille Guitton, highlighting some areas of Jumia’s partnership with the regional mobile operator MTN: co-branding, cross-selling or MTN entrepreneurship challenge powered by Jumia, among others.
This blog post can’t end without congratulating Afrobytes’ Haweya Mohamed and Ammin Youssouf for gathering in one place what’s probably the four most critical stakeholders for the African tech ecosystem today – start-ups, tech hubs, investors and mobile operators.