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Crowdfunding and Seed Funding in African Tech

I’ve written a couple of times about the lack of seed funding in Africa, and how to find the entrepreneurs to fund if you did have seed capital. We’re starting to see a few angel investors like Sean Murphy of Chembe Ventures making their way around the continent, but they are not nearly enough to fulfill the capacity of ideas and individuals who need startup capital.

Crowdfunding

Just this week the CrowdFunding South Africa site was launched (look for them at SXSW this week in Austin), working off the theory that, “South Africa cannot compete in the global online sector if it isnâ€™t funding start-ups at the beginning stage.” Their plan is to do this by getting:

“1000 people get together investing R1,000+ each by pooling the money into the Crowdfund.”

Seed funding is risky, and the idea of Crowdfund is to distribute that risk over a number of people thereby reducing it for everyone. Their goal is to invest 50,000-100,000 Rand in 10-20 “excellent ideas”, and also provide legal advice and contracts, designers, specialized developers, bandwidth, hosting, office space and running costs, mentorship and time saved.

This idea is similar to what Ben White at VC4Africa is thinking about, basically a “Kiva on steroids” as Bill Zimmerman puts it. A way for you to invest in people and projects with larger sums of money and greater risk and returns than on the microfinance investing sites.

Finding the Real Tech Entrepreneurs

Both the Crowdfund and VC4Africa initiatives are excellent steps in the right direction, as they both provide platforms that allow less-knowledgeable investors (of tech in Africa), and deeply involved African tech investors alike, to get involved without too much risk at one time. There remains one issue to be solved though, and that is finding the entrepreneurs to invest in.

Any VC worth their salt will tell you that they invest in the people behind good ideas, not just the product/service that the entrepreneur is trying to create. So, how do you find these individuals? It’s generally through your network, people you trust, that serve as a filter to guide you towards the promising ones. That’s the same in Africa as it is anywhere else, yet here in Africa, there are fewer of these trusted intermediaries who act as filters (especially for international capital), than there are in the US or Europe.

In a meeting this last week of the people behind Limbe Labs (Cameroon), Appfrica Labs (Uganda), the iHub and the iLAB (Kenya) we discussed how these spaces could act as that type of a filter for investors and funds. Each of us sees more young tech entrepreneurs every day, and sees these individuals consistently, than most any other single person could by themselves.

Could these labs, which are now showing up all over Africa, be a way for entrepreneurs to make themselves known, show their stuff, then be introduced to the funds and investors with a greater level of confidence than normal?

Malili: Kenya’s Planned Technopolis

January 28, 2010 / HASH / 45 Comments

I’ve had two meetings with Kenya’s Permanent Secretary Bitange Ndemo (Ministry of Information and Communications) in the last week. Both times a certain project kept coming up in the conversation. It’s called Malili – a 5,000 acre East African technopolis – a city built up for technology firms and it’s the Kenyan government’s way of creating a regional ICT brand.

My first thought up on seeing the pictures: it looks like Dubai has come to Kenya.

The Malili project is modeled off of other large technology and research parks around the world. One often cited in comparison is Smart Village Cairo, which currently hosts 120 companies and 20,000 professionals and they’re expecting that to increase to 500 companies and 100,000 professionals by 2012.

One of Kenya’s goals is to grow IT contribution to GDP from 3% to more than 10% in three years. This won’t happen using Malili as it’s yet to be built. In the interim, PS Ndemo has moved to secure a good portion of the Sameer Business Park, which is on Mombasa road and is almost finished being constructed. This type of space will be available for companies who eventually want to move to Malili in the future, and it also sets the stage for Nairobi being an even more prominent tech hub in Africa.

Location, Location, Location

I like this project, it shows Kenya as a forward thinking country with ambitious plans. My only misgiving is in the location. It’s 60km from Nairobi, and though the Mombasa road is much better, it’s still the most congested and prone-to-jams point on the Kenya roadway system. Yes, it will be a city all it’s own, over time, but Nairobi will still be the “place to be”, so there will be a great deal of traffic.

The airport sits between Malili and Nairobi, so for incoming people, it will be easier to get to than having to drive into, or through, Nairobi.

There’s a lot of discussion within the Kenyan tech community about Malili. It’s a big government project, with private sector participation, and Kenya’s track record of completing these types of big projects has been spotty (think Nyayo Car). Time will tell though, I’m of the mindset to not discount it. It’s time for us to start being optimistic about the possibilities that this country offers in technology.

Some, like the Nairobi tech community and the new Nairobi iHub tend to start small and grow from there. But, government has a different role to play, and it’s good for them to aim high and use their size to make big things happen.

Download the PDF:
Malili Technopolis overview slides – PDF

Quick Hits Around African Tech

November 23, 2009 / HASH / Comments Off

South African Startup Index
The Business Report is running a South African Startup Index using YouNoodle‘s API. Quite cool, I’d love to see someone do this for startups across Africa.

The Malawian Who Harnessed the Airwaves
Really, it’s an AfriGadget-type story on Gabriel Kondesi who constructed a radio station three years ago, using, among other things, three small transistor radios, car batteries, TV aerials, wires, and a radio cassette player.

A Rwandan software developer finds success
“Yves Kamanzi does not just study computer sciences, it is a passion which does not leave him when he gets out of the classroom. As a result, he has developed several administrative computer applications and despite fierce competition in the sector, he has been able to win over several companies. One program, which calculates employees’ net salaries, has proven especially popular.”

Musoni: mobile microfinance
Musoni is a new microfinance company in Kenya that is using mobile services for all their work. “Musoni will enable clients to repay their loans and deposit their savings using existing mobile money transfer products, such as M-PESA, Zap and Orange Mobile Money.”

An African Tech List on Twitter

November 4, 2009 / HASH / 4 Comments

A lot of people are on Twitter these days. So many, it seems that you can be overwhelmed by the number of people and it’s hard to find the right people to follow. To help with that, I’ve created a my own Twitter list that follows African Tech twitterers.

My plan is to keep this list pared down to only those who put out a good number of tweets regarding technology in Africa. I’ll be the biased curator, and hopefully it’ll be useful to others. This means that people will get dropped, and others added, from time-to-time. Don’t be offended if you’re not on it, it’s not personal, it’s just that I have to keep it small to be useful to others. Ping me if you think I should add someone.

You can get my curated African Tech Twitter list at http://twitter.com/whiteafrican/african-tech.

Here’s a widget with the list in it. You can get your own here, just enter “whiteafrican” and choose the “African Tech” list.

Other great Twitter lists:

Afritwit’s list of African twitterers (maxed out)
Alisdair’s development list
Sciculturalist’s Techies list
A list of Twitter employees
Tim O’Reilly’s Tech News list

Lastly, Listourious has a huge index of Twitter lists for you to peruse.

(You can always find me on Twitter at @WhiteAfrican)

Is There Technology Arbitrage in Africa?

September 17, 2009 / HASH / 7 Comments

The term arbitrage traditionally refers to taking advantage of the price differential (the gap) between two or more markets. One example is how search engine marketers use arbitrage to make money off of Google Adwords with keyword buying and landing pages. Another is when traders take advantage of differences in exchange rates on currencies in two separate markets.

Is there technology arbitrage in Africa?

Tucked away in a blog post on Calestous Juma talking about the future of African communications, Ethan Zuckerman states:

“The spread of connection infrastructure into Africa now points to the need for devices that can access the internet, content to be delivered and applications. These, in turn, point to the need for institutions, laws and policies to regulate this space, which are currently lagging far behind the technology.“

We all like to discuss the technology gap in Africa, which is this space between those who have access to technology and can use it (the West) and those who do not (Africa). Does this create the environment to take advantage of technology arbitrage?

From a certain perspective that can all seem very bleak and depressing. From another, it smells like opportunity.

This time and knowledge lag between government “institutions, laws and policies” that Calestous Juma and Ethan are discussing is just the sort of gap that allows arbitrage to happen. You should be able to turn the lack of technology in one place, or at least information, compared to the other to your advantage.

Put another way, when a government is too slow, inefficient and technologically incompetent to keep up with the rest of the world, what happens?

I think we see the answer in a number of places already, not all of them savory. We see this in business executives who corner a market, like we’ve seen with Safaricom in Kenya, or the notorious 419 scammers in Nigeria. We read about it when Egyptian youth use Twitter to broadcast police brutality, or when Zimbabweans send MMS images of completed ballot counts from voting precincts in advance of those trying to perpetrate fraud.

Two main groups seem to take advantage of this: businesses and activists.

The natural inclination of the market is to leverage these gaps and inefficiencies, to create opportunities out of the void, that technology can often overcome. The best businesses in our current era are built to do this as are the activist groups with the greatest impact.

[Authors note: I’ve made up this term “technology arbitrage”, but I couldn’t think of a better way to describe what I’ve been thinking about. Speaking of which, I’ve been muddling this over in my head for a week and just wanted to air it out to hear other’s thoughts.]

Quick Hits around African Tech

September 16, 2009 / HASH / Comments Off

Understanding what drives Mpesa agents
Growing the agent network is one of the most challenging parts of a mobile payment system.

“The number one cost for most agents was liquidity management â€“ moving cash. Agents report a host of expenses, including bank charges, transport costs, and fees to aggregators who advance commissions and provide easy float/cash swaps for agents. On average, liquidity management consumed 30% of total expenses.”

Asynchronous Info, Disjointed Data and Crisis Reporting
Jon Gosier talks about Uganda’s riots and what he’s learned in the process.

Africa’s diaspora and the cloud
Teddy Ruge writes a great essay on the web and Africa’s diaspora.

“Thereâ€™s a cloud gathering over Africa; a storm of connected thoughts and ideas that are pushing African countries violently forward. The Diaspora is using emerging web technologies in increasing numbers, frequency, and variety to stay connect with Africa, simultaneously charting a new digital course for itâ€™s economic independence on the world stage.”

New Africa broadband ‘ready’
The BBC Digital Planet team is in Kenya and doing a knock-up job of interviewing people about what’s going on around the tech space there.

(Note: all the people in the BBC “in pictures” for this day are part of the Ushahidi extended dev team in Kenya)

Mobiles offer lifelines in Africa
Ken Banks writes about mobile phone growth and development in Africa, stating “Africans are not the passive recipients of technology many people seem to think they are.”

Hanging out with Ghanaian Devs

August 12, 2009 / HASH / 4 Comments

Though I’ve been busy running around getting ready for this Maker Faire Africa event, I’ve also had some nice chats with the a few of the programmers and designers in Accra. I know there are still a lot that I haven’t met, but this has been a good start.

I’ll start out by saying this: one of the most disappointing things that I’ve come across here is the lack of community within the tech scene. There is no mailing list, forum, or other digital touch-point for the devs to keep in touch with each other and discuss pertinent local issues. I know just how valuable this is due to my involvement with the Skunkworks tech community in Nairobi.

Offsetting that is the fact that they do have places like Busy Internet and AITI, two facilities that are well-known for supporting the tech community, that act as nexus points for tech meetups and user groups. There are also a number of good tech outfits with quality programmers.

First impressions leave me excited about the talent, but surprised at the lack of connectivity within the community.

Ushahidi meetup

Tonight we had an Ushahidi meetup night in Accra over at the Suuch Solutions office. It’s a great location, butting up to a hotel with nice seating for a get together like ours. We had a couple devs from BusyLab (which I’ll write a full post on soon), a couple from Succh, as well as Henry Addo from our team.

It looks like we have a couple new guys to help out on some interesting parts of the platform. George is an HTML markup guy who is itching to get his hands into some design work, and Chinedu is going to dig into the API with Henry.

The BugLabs Device

We also had a chance to break out the Bug kit from BugLabs, a completely modular hardware device that can be programmed using Java. I’m not sure who will be having the first crack at it, but everyone was amazed with it. What geek doesn’t like this type of stuff? I mean, accelerometer, GPS, camera, LCD, WiFi and control unit. It’s just such a crazy-cool device.

Meetups in Ghana, Kenya and Uganda

August 4, 2009 / HASH / 4 Comments

August is a busy month. If you’re in Ghana, Kenya or Uganda and want to meetup about anything, let me know. Here’s a rough agenda for some open times and events on my schedule.

ghana-kenya-uganda

Ghana

I’ll be in Ghana from Aug 10-18, much of that time will be spent getting ready for and putting on Maker Faire Africa. If you’re attending that event, or want to carve out some time to chat before/after it, let me know.

We’re having an Ushahidi meetup on Wednesday, Aug 12th starting at 6pm at the Adabraka. If you want to know more about the project, let me, Henry Addo or Brian Herbert know.

I’m really interested in seeing some of the mobile and web apps that the Ghanaian community is working on. If you know someone working on something cool that I just shouldn’t miss, leave it in the comments.

Kenya

I’ve got a couple days in Kenya around Aug 19-20 and Aug 23-26. As usual, my Kenya time gets busy very quickly, so let me know now if you want to meet and I’ll see if I can slot it in. I’ve always got time for cool stuff. 🙂

I’m planning to have an Ushahidi meetup on Wednesday, Aug 26th starting at 6pm at the Prestige Plaza food court (as usual). Come meet the Ushahidi team that’s behind the latest “Goma” release. Also we’ll have the two newest members of Ushahidi in attendance.

Uganda

I’ve got a quick jaunt over to Uganda where I’ll be meeting up with the Appfrica team and Teddy Ruge. We’re also planning on having a tech meetup on Friday, Aug 20th. Again, let us know if you can make it.

As you can tell, it’s a little bit of a whirlwind trip. Follow along here for updates (and AfriGadget for the Maker Faire Africa reports).

A Job Board Aimed at African Devs and Designers

July 7, 2009 / HASH / 12 Comments

This week I launched a little side project: JOBS.whiteafrican.com I think of it as a place to connect freelancers and small teams with gigs and project work in the African tech sphere.

I’ve been getting a number of emails lately asking me connect people in the US, Europe or large organizations in Africa with local (as in “in-Africa”) talent. They’re usually interested in finding a knowledgeable designer, a good blogger or editor, and I’ve had quite a few people ask me to put them in touch with programmers.

The White African Job Board

At this time, it’s a simple and free place to post jobs for African technology professionals. So, what I’m really looking forward to seeing are opportunities listed specifically for people in Africa. That last bit is important, it’s for African devs, designers and bloggers.

A lot of these might be for short-term gigs and volunteer opportunities, but who knows… It’s a little bit of an experiment, so no promises on my part. If it proves popular and useful I’ll keep it around. Oh, I have the final say on what jobs go live too, so be forewarned. Think of me as the curator and friendly job board dictator… 🙂

Make sure you grab the news feed, so you don’t have to keep coming back to see what’s new. Take a look at the tips page – think about how you’ll deal with project scope, as well as how to pay, or be paid.

Real Job Boards Around Africa

Unlike my little project solely focused on technologists, there are some real job boards around the continent that are worth keeping in mind. Here are a couple of them (leave links others that I missed in the comments area):

Kazinow
Find a Job in Africa
Job Space – South Africa
Best Jobs – South Africa
Zebra Jobs
Sama Source – Outsourcing to Africa

Further Thoughts on Outsourcing Tech Work to Africa

It’s an encouraging sign that there are a lot of people interested in finding local African talent. What I’ve found in my travels, and in talking to technologists around the continent, is that though there are more devs and designers each year, the number of top quality ones available for work are few.

One cautionary piece of advice though… and it pains me to say this. A few of the African developers that I have come across are not time-conscious and they can come across like their client/project is not as important to them as you would find in their counterparts in the West. Of course, this means if you are timely and fulfill your responsibilities you will find clients lined up 10 deep to get to you – you’re a rare commodity.

African developers are quickly going to learn that they’re on the global stage now, and there’s nothing stopping their clients from switching to someone more reliable, even if it’s a country or continent away.

The good news is that of the many devs I’ve met, many are as good as any you’ll find anywhere else in the world. A few of them are on par with the best I’ve come across anywhere.

A related initiative

There is also an initiative called Coded in Country focused on getting programming work done within the countries that the applications and products are meant for. Keep an eye on it, and pitch in as/where you can.

Where Africa and Technology Collide!