(Photo credit @kylejglenn)
Tech continues to provide endlessly fascinating news to mull over. Last month, we saw the name revealed for the Facebook whistleblower that leaked a trove of internal documents highlighting FB executives’ willful ignorance of research that shows their products can have damaging effects on mental health & democracy -- and that there are ways to fix this. I worked with Frances briefly at Google and was proud to see her leading an impressive campaign to shine the light on Facebook’s misinformation challenges. And then late last week, Facebook announced its Alphabet-like move to re-name the umbrella company to Meta to pay homage to its pivot towards the metaverse. Last week, Google announced great earnings, but Apple missed sales projections so Microsoft is now the most valuable company on the planet. But enough about tech! I also wanted to announce my attempt to make change at the local level by running for my Town Board this November - check it out at lizarnoldny.com. Election day is tomorrow Tue Nov 2 - so I’ll keep you posted on the election results!
#techsoundbite
This week, I thought I’d pivot to share what I’ve been learning recently about the tech scene in Africa. Earlier this summer, one of my former students (& current VC) Abdul Ly shared this great primer on the tech scene in Africa. I appreciated the attempt to distill a hugely complex continental ecosystem into digestible bites, highlighting topics like the changing demographics & the effects of the influx of foreign capital from the US & China. This BCG report highlights the expansion and maturation of the tech startup scene in Africa, and shows that the vast majority of tech startups do not progress beyond the Series B stage. The report makes additional recommendations on what types of support, investment, and interventions could help the startup ecosystem thrive into later stages of growth.
Two current ‘success’ stories are Jumia and Andela. In April 2019, the continent of Africa had its first tech unicorn when e-commerce startup Jumia went public. It was founded in Nigeria by 2 ex-McKinsey consultants in 2012 as an e-commerce marketplace but has expanded into a collection of companies under the Jumia Group umbrella. And a few weeks ago, technical talent company Andela received a $200M investment from Softbank to push their valuation to $1.5B & help make them another unicorn. I met co-founder Jeremy Johnson when his first startup won a Princeton entrepreneurship competition I helped organize, and I have been following his startup progress ever since. I personally know some individuals who have had their lives changed by Andela’s programs and am excited to see its continued success.
Did you know that investment in Africa has grown 6x since 2017? Recently, Google announced a $1B investment in the continent. Part of the money will go towards building a subsea internet cable to increase network capacity and reduce internet prices. This coincides with the Facebook-led 2Africa Consortium's efforts to build another subsea internet cable. The rest of Google’s funding will be earmarked to support nonprofits and to invest in startups. Netflix is also expanding into Africa in a unique way: by offering a free plan to Kenyans. The idea is that if Kenyans enjoy the breadth of programming available to them, they will upgrade to a paid service plan later on.
A few challenges that are affecting growth in tech in Africa include the theft of IP addresses, the slow rate of internet penetration, and the uninformed choices of some VC funders. The IP address theft problem is a fascinating look at how individual greed can impact the opportunities for business growth on a continental scale. On the bright side, there continue to be some very cool startups coming onto the scene like this Nigerian fintech startup addressing chronic debt and this Ghanian facial recognition startup. And Fast Company’s 2020 List of Africa’s Most Innovative Companies includes others working on the problem of internet penetration to streamlining logistics & more. If you’d like to keep up on the African Tech scene, check out Tech In Africa.
