ISSUE 1
Africa
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Contents 15% of start-ups have halted operations due to Covid Digital Transformation in Africa From Africa to the world – The story of Silicon Africa Here’s to the next decade of tech start-up excellence Africa’s tech startup scene is alive and thriving Start-ups driving digital agriculture innovations in Africa The future of Tech on the African continent and how the youth can get involved Trade, Education, Community: AI Expo Africa’s strategy to grow Artificial Intelligence in Africa CONTACT US PUBLISHER | Vasantha Angamuthu vasantha@africannewsagency.com BUSINESS DEVELOPMENT | Keshni Odayan keshni.odayan@inl.co.za SALES Charl Reineke | charl.reineke@inl.co.za Kyle Villet | kyle.villet@africannewsagency.com GENERAL ENQUIRIES | info@anapublishing.com
Africa’s Youth Are Driving The Growth Of A New Tech Sector – The Crypto-economy
Forward IT GIVES me great pleasure to officially welcome you on the occasion of our first edition of Silicon Africa Digital Magazine. As an organisation on a mission to develop the African economy through technology entrepreneurship and technology innovation, we are looking forward to partnering with organisations and individuals across Africa and the globe to make this mission a reality every day. Currently, Africa has potential, but how we change that to practical, measurable change is up to us and how we are willing to collaborate and work together to develop a better future for Africa. The purpose of this magazine is to highlight those who are doing amazing things in the African tech start-up ecosystem. This includes start-ups, corporates, investors, media companies and more. We believe the positive impact
we are making on the African technology entrepreneurship scene is not measured well, and the stories behind it are not told the way they should be.
ize h k M i n a d n i L Founder and chief executive of Silicon Durbs, Lindani Mkhize.
Start-up PAUSE 15% of start-ups have halted operations because of Covid-19
THE impact of Covid-19 has been severe on the Indian start-up ecosystem during the lockdown as 15% of start-ups have halted operations. According to a report by TIE Delhi-NCR and Zinnov, 44% of start-ups have cash runway for less than six months, 41% of start-ups have been impacted negatively, while 52% are struggling to raise capital. The report witnessed a decline in the pace of investments, especially in April to June 2020, 48% year-on-year decline in funding and 37% year on year decline in a number of deals in the quarter. As per the report, less than 50 start-ups raised their first round of funds in Q2 2020. There was a sharp dip in percentage share of total funding for B2C start-ups from 65% to 70% in Q1 2020 to 30-35% in Q2 2020. The decline was even more prominent in seed and early-stage investments. More than 55% year-on-year decline in seed and early-stage while 38 years on year decline in late-stage funding in the quarter.
There was a more than 50% decrease in early and late-stage total funding in Q2 20 compared with Q1 20. Seed-stage deals dropped most at 30% in Q2 with investors majorly placing their bets on mature start-ups. Enterprise Tech, BFSI, Healthcare and Edtech combined have raised 60-65% of the Q2 funding in 2020. The report notes that the Covid-19 impact has varied significantly by sector and several sectors have significant tailwind due to the pandemic; while others have recovered quickly. “We do have sectors that are still deeply impacted and would recover very slowly Indian ecosystem, led by entrepreneurs, responded quickly and effectively to Covid-19 in response to rapidly evolving market dynamics, customer preferences and operating conditions,” the report said. It says the Indian start-up ecosystem will grow from strength to strength and eight unicorns are expected for 2020. | IANS
As a member of the BRICS grouping of rapidly-developing economies, South Africa is well positioned to become a global leader
Digital transformation in Africa THE digital era has brought a fundamental shift in the global economy, pushing the limits of innovation and redefining technological industries. South Africa represents one of the continent’s largest and most advanced technological industries, although it is still far behind in terms of technological infrastructure and access. As a member of the BRICS grouping of rapidly-developing economies, South Africa is well positioned to become a global leader in technological innovation. Digital transformation is no longer just forwardthinking; in today’s Covid19 environment, digital transformation is survival. Statistics show that the
digital marketing industry is thriving worldwide, as more and more entities join the digital ecosystem and work opportunities in digital marketing are evergrowing. This has created authenticity and intimate relatability in content marketing and given birth to what is known as “Influencer Marketing”, an exciting development in brand communications where brands work in collaboration with young digital creatives and influencers to grow the digital marketing space. South Africa has seen lucrative collaborations between businesses and young digital natives. Now, more than ever, digital transformation is a critical transformation
for all businesses, brands, and enterprises, by using technology to create alternative avenues of communication and engagement, businesses can enhance their service offering while accommodating lockdown regulations to support customers’ goals of staying safely at home. According to research conducted by Citrix, 92% of companies across South Africa’s key industries agree that digital adoption directly affects company profits. Experts predict that digitalisation will gain extra growth post Covid-19. With the right approach, businesses can come out of this stronger, more agile, and more customer-centric than before. | Digify Africa
From Africa to the world THE SILICON DURBS STORY SO FAR “SILICON Durbs came about almost three years ago when one realised how Durban was behind and how it was left out when it comes to technology, especially technology entrepreneurship. This got me to see the problem not only for me but for the city as a whole and opt to solve it.” These were the words of the founder and CEO of Silicon Durbs, Lindani Mkhize, at the launch of Silicon Africa in Sandton. Mkhize has always had the vision to develop an African city economy through technology entrepreneurship and technology innovation on the continent. With that said, he always
found it challenging to branch out to other African countries. “I see Silicon Africa being the summary of the future of Africa and the structures we are setting up today growing to a level where they receive government spend across all African countries Silicon Africa will grow into in the coming 10 years.” African News Agency (ANA) CEO Vasantha Angamuthu was one of the speakers at the launch of Silicon Africa and spoke about African innovation and the importance of collaborating with Silicon Africa. “It is truly an honour to be partnering with Silicon Africa in this milestone event. ANA is the continent’s largest news syndication business. At ANA we believe our content and information can power Africa’s growth and development and this collaboration is the perfect opportunity to do just that.” IOL Tech Editor Faheem Khota was also at the launch and spoke about the role IOL Tech will play in highlighting the tech start-up community in Africa. “Through 2021 we will be extensively covering tech ecosystems across North, East, West and South Africa and identifying key start-ups in those regions. This will culminate in a summit in late 2021,” said Khota. For more information about the launch of Silicon Africa visit our IOL Tech Facebook page to watch the recorded live feed.
TRIUMPHS, HEARTACHE MARK INNOVATION WORLD
The TECH ROAD to quick riches WESLEY DIPHOKO
BIG EXIT, fintech, failure, success and impact are the keywords that define the past decade in the technology start-up world. During this decade we witnessed major tech companies failing and closing shop. We also witnessed some great tech start-up success stories with founders who are still flying the tech start-up flag. This decade was also marked by technology innovations that are truly making a difference in people’s lives. Today, we shine a spotlight on the technologies and tech start-ups that shaped the past decade. In the tech start-up world starting a company and selling it for a sizeable amount or an exit is the ultimate goal. Two local fintech and edutech start-ups completed historical exits by South African standards. Fundamo, a fintech start-up that was hatched at Sanlam, laid the foundation for the decade through its acquisition by Visa. In June 2011, Fundamo was acquired by Visa for $110 million (R1.7 billion). Fundamo built one of the world’s most advanced and sophisticated mobile financial service platforms. The platform was deployed in more than 34 countries across Africa, Asia and the Middle East, offering mobile financial services to unbanked and underbanked mobile subscribers
including person-to-person payments, bill payments, wireless airtime top-up and ticketing. The Fundamo big exit story was followed by an Edutech start-up exit story. In 2017, an educational technology start-up, Get Smarter, was acquired by 2u, an international educational technology company, for $100m (R1.48bn). This decade also had its share of tech start-up failure stories. In 2012, South African dreams of developing the country’s first electric vehicle, Joule, were dashed as the tech start-up behind the project folded. Joule was an electric five-seat passenger car by Optimal Energy, a South African tech start-up based in Cape Town. One of the biggest tech names to join the South African tech start-up cemetery in the last decade is one Stellenbosch founded company, Mxit. What was then considered to be the biggest instant messaging platform in the country became a victim of tech developments such as WhatsApp. In the history of Mxit users, 2015 will forever be remembered as the sad moment for millions of users of this African tech giant. Mxit was officially closed down in 2015 and its intellectual property handed over to a trust. In the next decade more will need to be done by local tech start-ups.
Africa’s tech start-up scene is
ALIVE AND KICKING MUHAMMAD NABIL AFRICA’S technology start-up scene is vibrant – and growing fast. There are currently more than 640 active technology hubs across the continent, and according to Partech Africa, start-ups raised $1.163 billion (R17bn) in equity funding in 2018 – a 108% yearon-year growth. In my work with Microsoft 4Afrika, I have had a front row seat to the innovation and creativity many African startups have employed to address pressing economic and social gaps and needs. African tech start-ups are renowned for building solutions to some of the most complex challenges. This often stems from having first-hand experience of the problem, and knowing best how to solve it. Whether it’s using agri-tech to improve crop yields, using technology to deliver finance solutions to the previously unbanked or pairing solar power and IoT to solve power reliability issues, African innovation is alive and thriving, and the Covid19 pandemic has only fanned these flames of ingenuity. Microsoft 4Afrika has a strong commitment to entrepreneurs and we actively engage with SMEs and start-ups, providing training on how to apply technology to their business and helping them understand how they can benefit from a broad range of available devices and services.
START-UPS ARE DRIVING DIGITAL AGRICULTURE
When it comes to investing in start-ups, we look for cloud-oriented solutions with growth potential in health care, agriculture, financial services, government services and education. We prioritise industries that promote economic development and societal impact, but have also invested in start-ups in areas including gaming, entertainment (a massive industry in Nigeria), transportation and energy. We are in a period of unprecedented challenges, but we’re also experiencing rapid technology advancement that is transforming our world. When people can use technology and create it, they can experience higher paying jobs.
INNOVATIONS in Africa MICHEL BERNHARDT
Muhammad Nabil
THE Covid-19 pandemic has been a boost for rapid digitisation globally. The shift to digital has also reached the agriculture and food sector in Africa. Foodtech and agritech are now fast growing sectors with start-ups from Africa driving change. The spread and growth of startups providing agritech and foodtech solutions promises dynamic growth and transformation of African agriculture. Linking technology to the agriculture sector can also make agriculture – an ageing
sector – more attractive to youth while making it a sustainable employment opportunity. Technology spans a broad usage spectrum: from e-commerce and supply chain management to precision farming, which monitors and tackles, among others, crop diseases and pests using sensors, drones, satellite images and artificial intelligence (AI). Fintechs make use of blockchain to do their part in reaching the unbanked population in rural areas. According to the Consumer Technology Association, almost 400 digital solutions have
been registered across sub-Saharan Africa, with an annual growth of 45% since 2012. Nevertheless, around 90% of the market for digital services remains untapped. In addition, many digital solutions are not scaled, giving away a lot of potential impact. Yet the sector still holds numerous business and investment opportunities! This is where Scaling Digital Agriculture Innovations through Start-ups comes in. The project has been implemented by the German Corporation for International Co-operation on behalf of the German Federal
Ministry for Economic Co-operation and Development. With our Investment Readiness Programme, we grow selected African start-ups in the agri-food sector, helping them to scale their digital solution. We want to harness the power of technology and entrepreneurs for positive social impact in Africa. All the innovations and start-ups we support have to have an impact on the income of those who use the innovations. Bernhardt is head of programme at the German Corporation for International Co-operation.
AI Expo Africa’s strategy to grow Artificial Intelligence in Africa
THE FUTURE OF TECH IN AFRICA AND HOW THE YOUTH CAN GET INVOLVED THE world is facing one of the most challenging times due to the Covid-19 pandemic and Africa has not been excluded from the negative impact. However, with adversity comes opportunity. Nigeria, Kenya and South Africa have been at the forefront of the tech revolution in Africa and this is evident through the huge fintech investment received from various sources this year. The rise in the penetration of mobile phones has opened many opportunities for companies to create solutions to many issues that rural people face. Mobile money transactions have increased exponentially and created many
innovative start-ups. DueDash is a platform that brings start-ups, founders, investors, corporates, and specialised services professionals together. They get to share experiences and there is a wealth of information and knowledge to guide start-ups through the daunting journey. The Cape Town Sparring Ring was created two months ago to provide support to the African start-up community. The platform has a special focus on female and youth start-ups to gain the necessary knowledge and to build sustainable businesses. Once startups have successfully completed
the “investor readiness check”, they are exposed to investors on the platform. With funding for business support services through AWS, Freshworks and HubSpot these start-ups are exposed to professional guidance and support to assist them to turn their idea into reality. Join the Cape Town Sparring Ring through the link below and experience the community that ensures no investable start-up is left behind. https://community. duedash.com/share/ WAh6VlAxaI2fXtLy?utm_ source=manual
With adversity comes opportunity
Telecommunications Minister Stella NdabeniAbrahams (centre) visited AI Expo Africa last year and provided a keynote address at the
ONLINE 2020 show. The minister is flanked by AI Expo Africa co-founders Dr Nick Bradshaw (left) and Roy Bannister (right).
Trade, Education, Community
MAURITIUS emerged the highestranked African country in the Oxford Insights 2020 Government AI Readiness Index, ranking 45th out of 172 countries around the world. How do we keep Africa from trailing in the global AI race? Having successfully run AI Expo Africa – the continent’s largest B2B / B2G AI and smart technology conference – over the last three consecutive years, we believe it’ll come down to three things: trade, education and community. AI Expo Africa 2020 ONLINE was our largest edition to date, drawing more than 2000 registered delegates and over 500 companies from 45 countries around the world to over 80 virtual booths. The online format saw more international exhibitors take part through the expo’s hugely successful international pavilions which brought start-ups and organisation s from France, Switzerland, The Netherlands and Israel. The expo’s virtual innovation wall, which this year hosted over 30 posters addressing social, economic and environmental challenges facing Africa that can be solved using AI, gave start-ups a platform to showcase new innovations to potential partners and investors. AI Expo Africa is now more than just an annual tech or business conference. Join our community at www.aiexpoafrica.com
The virtual lobby at AI Expo Africa 2020 ONLINE, which this year was the largest global AI virtual event, with over 80 online exhibitors featuring African and global tech companies like SAP, Microsoft, Huawei, Dell, Intel, Blue Prism, Oracle, UIPath and arm. The speaking programme featured over 80 global and African AI thought-leaders.
AFRICA’S CRYPTO ASSET MARKET SOARS ONE OF FASTEST-GROWING TRADE SECTORS IN WORLD IS DRIVEN BY YOUTH MANY experts believe the emerging crypto-economy will provide youth with the necessary platform to identify new opportunities and job possibilities within blockchain technology and the crypto industry. The arrival of blockchain technology on the global economic scene is changing how we do business. A 2019 survey by KPMG, of international executives, found that the business value added by blockchain will surpass $176 billion (R269bn) by 2025. In finance, blockchain has spawned the crypto-economy. Led by tech-savvy youth, Africa has become one of the fastestgrowing markets for crypto assets. A youth-led revolution Operating within a jobs market that offers limited opportunities and uncertain future employment prospects, the entrepreneurial drive of many young Africans has been effectively channelled into the cryptocurrency market, emerging throughout Africa. Africa’s booming bitcoin economy has attracted many international sector giants. For example, having seen significant growth in digital currency transactions throughout African territories
in recent years, largely driven by users under the age of 35, global peer-to-peer marketplace Paxful believes that the bitcoin economy carries with it the ability to reach a multitude of African citizens, and in doing so, looks set to harness the combined power of youth and tech as a dynamic means of propelling African economic development forward. Founded by two young entrepreneurs, one of whom is from Egypt, Paxful is committed to helping people use their entrepreneurial skills to identify new opportunities. “Education is critical to promoting enterprise development in the bitcoin economy,” says Ray Youssef, co-founder and chief executive of Paxful. To this end, Paxful helps entrepreneurs and small businesses gain access to the global bitcoin market. The company invests in a variety of educational programmes to support the development of the bitcoin economy in Africa. Paxful’s efforts include an entrepreneurship programme called the Paxful Peer Program, aimed at helping young entrepreneurs learn more about opportunities within the digital economy and peer-to-peer finance.
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