Social coding and software development platform, GitHub, announces its first-ever event for developers in Africa.
The event will be in the form of a virtual meetup and will take place on Tuesday, September 15, 2020, from 3 pm to 5 pm WAT or 6 pm to 8 am EAT.
The event will kickstart a series of monthly online meetups geared towards building a vibrant community in the region. The meetups will inform on the latest GitHub workflows, latest features and how one can contribute to Open Source.
The events will feature speakers from GitHub as well as other prominent Open Source maintainers from Africa.
Click to sign up and be part of the first GitHub event in Africa.
Last year, GitHub CEO, Nat Freidman, visited Nigeria and Ghana to meet with developers and entrepreneurs. Learning about how “GitHub can be of service” as Microsoft, GitHub’s parent company broadens its horizons as a developer-centric company. He also shared that GitHub will be looking to hire remote developers from Africa soon.
Developers on the African continent have become one of the major contributors to the GitHub platform. With Egypt, Nigeria and Algeria recognized as the fastest-growing countries by open-source repositories created.
In the 2018 GitHub Octoverse regional report, Nigeria represented the fourth fastest-growing developer community on GitHub. With 1.6x as many contributors in 2018 than in 2017.
Startup entrepreneurs are working to harness Africa’s potential. Together they represent a critical pipeline of innovation that is driving high growth high impact solutions on the continent. A critical juncture for any startup comes at the seed stage, a financing segment that has experienced significant changes these past months. In this article, we delve into the changing dynamics of seed-stage investing and as VC4A works to recruit startups for the 2020 VC4A Venture Showcase – Seed.
At the pre-seed stage, entrepreneurs are going after their first third party investment, raising $50K to $150K. Often Friends, Family, and Fools (FFF) + public funds in some African countries (for example DER in Senegal, Entrepreneurs of Tunisia, and the Technology Innovation Agency in South Africa), are the only investors at this stage.
Going on to the seed round, entrepreneurs are expected to be selling the product on the market and testing customer response. This is the moment the company needs to raise their first significant ticket and are looking for professional investors to help grow and scale the business. Overcoming these initial fundraises is a challenging test for any entrepreneur.
Tomi Davies, President of ABAN, explains, “Seed stage investment is when a startup has proven its Minimum Viable Product (MVP) and is in the process of finding product-market fit. In Africa, they will typically have revenues in the tens if not hundreds of thousands of USD.”
Overall, seed stage investment on the continent is still growing (see Partech figures) and expanding across more ecosystems in Africa. All active players on the continent see a better quality of startup/entrepreneurs due to A) better mentoring programs in most countries B) an increase of Business Angel networks and C) a new generation of entrepreneurs very open to technologies, with a pan African vision and a willingness to scale fast. That said, seed funding is still insufficient on the continent and concentrated on just a few ecosystems (predominantly Anglophone).
In Africa, the maturity of a startup raising seed funds is arguably higher than in other continents due to the scarcity of capital. For example, a team fundraising pre-seed would be expected to have already built a prototype or even have launched a product or service. Grégoire de Padirac from Orange Ventures adds, “It is nearly impossible to raise with only PowerPoint presentations in emerging countries.” And for all right and wrong, most seed-stage startups on the continent have to demonstrate their resilience (low cash burn), show clear traction, and be generating revenues. Tomi expands, “The expected revenue levels continue to increase and it is unlikely for a startup with less than $100K in revenues to get seed investment nowadays.”
These realities result in a higher threshold for the continent’s entrepreneurs and might also be contributing to the local vs. foreign founder dynamic, where management teams do better when they have their own resources and better access to networks at the earliest stages of venture building. At the same time, incubators and accelerators that have the mandate to prepare startups for their first pre-seed investment, the single most significant KPI, are too often concerned with their own financial sustainability. In reality, many of the incubators and accelerators are playing a numbers game focused on the number of cohorts and the number of companies graduated vs. the quality of support delivered and resources secured. Khaled Ismail of HiM Angels explains, ‘Too many incubators and accelerators fail to provide the mentorship and guidance the startups need at such early stages of formation and when they need it the most’. These are additional pressures on the startups when the road to funding is in actuality longer and more difficult to attain.
Grégoire expands, “the more mature the ecosystems are, the sooner the startup receives funding. In more advanced sectors such as Fintech, startups scale fast and so the valuation and level of maturity are getting close to the European standards.”
Khaled adds, “I still believe that the amount of money available for investment at Seed stage on the Continent is very low in absolute terms and as a % of the money invested in Series A and B. That is causing a distortion to the market and is depriving some good potential startups from growing at an early stage.”
These constraints need to be addressed, given that in every country, there is a growing pipeline with a clearly improving quality year on year. 2019 was by all accounts impressive, where in many ecosystems we saw a wave of new startups and entrepreneurs. For example, the Orange Ventures seed challenge received more than 600 applications from 7 target countries (Cameroon, Ivory Coast, Senegal, Morocco, Tunisia, Egypt Jordan). The good quality of the applications was a testament to the tenacity of the continent’s entrepreneurs and their continued efforts to build world-class companies.
The good quality of the applications was a testament to the tenacity of the continent’s entrepreneurs and their continued efforts to build world-class companies.
With this mind, to harness this entrepreneurial talent more can be done:
More Government/DFI support to invest in seed capital instruments and programs (like the DER in Senegal and Entrepreneurs of Tunisia (EOT)) or as investment backing for local seed funds managed by local investors;
Better regulation such as Startup Acts to support local entrepreneurs and investors, where regulation needs to be open and conducive to innovation. Specifically to adjust legislation for startups when looking at issues like Company Registration, Employment Law, Taxation, Intellectual Property Protection and Capital Import/Export rules;
Review government procurement policies to see if they are friendly to startups. Encourage local institutions and corporations to be more active locally (with funding, programs, partnerships, and supply/sourcing contracts) and to open the markets for local startups;
Strengthen local accelerators and incubators, and further train and capacitate the teams in charge of startup programs. Support these programs with a stronger community of mentors and angel investors that can engage with their network, expertise and capital.
At the same time, competition for Series A & B is growing on the continent among VCs. It is key for African focused funds to be more active in Seed or Pre Series A investments to secure their access to the best deals and to maximize their financial return. This is good news for the ecosystem as we continue to see a growing number of investors moving downstream.
In this context, true to its mission to connect entrepreneurs with the knowledge, network, and funding they require to succeed, VC4A adds Seed as a category to the 2020 Venture Showcase. We are calling for 10 African startups looking to raise between $150K and $1M in collaboration with technical partner AWS Activate and network partners Afrilabs and ABAN. The funding/investment range may seem large to many, but reflects the variety of definitions being used across the continent, the growing diversity oft investors themselves, and the ever-growing range in ticket sizes. As a consequence, and to be fair with the applicants, the Seed ventures, assessed by an independent jury of investors, will be put into two different buckets: those seeking to raise less than $350K and those looking to raise more than $350K.
The 10 selected startups will get:
To participate in the VC4A Venture Showcase deal room, including 150+ early-stage investment firms
Professional edited 3-minute virtual pitch videos
30-minute deep-dive sessions with investors in a private room
Mentorship and pitch training by early-stage investor organizations
Amazon Web Services credits from AWS Activate worth $10,000, as well as tools, resources, and more to get started quickly on AWS
To join the Showcase alumni network and gain exclusive access to fundraising opportunities
With this Seed track, VC4A rallies resources and funding for a new generation of startups coming up across the continent. We encourage entrepreneurs to apply before 11 September and investors to refer innovative ventures to Thomas van Halen thomas[at]vc4a[dot]com.
Some of these software engineers took to social media to share the one-year anniversary package they received from Microsoft. Check out some of the posts below. Thereafter we will look at how far the company has come on its journey with the continent.
Africa is a unique opportunity … we are opening these development centers … where you see people who are very qualified for the kind of work we do
Phil Spencer, executive sponsor of the Microsoft ADC
Microsoft in Africa
Microsoft has been operating in Africa for the past thirty years. Having local offices in Senegal, Kenya, Nigeria, South Africa, and Egypt. With South Africa hosting the oldest Microsoft offices in Africa.
However, this has mainly been on the sales side of the business. Providing consumers and organizations, mostly governmental ones with various services. The closest you could come to Microsoft workers in Africa were either through partner organizations or Microsoft employees acting as technical account managers who implement, onboard and deploy Microsoft services for customers and clients.
The launch event came off on the backdrop of a lot of backlash to self-professed Africa’s biggest online e-commerce site Jumia. The CEO had claimed a lack of local software engineering talent. Microsoft shared it believed in the growing local talent and that it was time to tap into that pool.
Our new Microsoft Africa Development Center will be at the forefront of building innovative solutions that benefit Africa − and the entire world. https://t.co/DlIrdkfMaF
Phil Spencer, Microsoft corporate vice president and executive sponsor of the Africa Development Center, and Michael Fortin, corporate vice president at Microsoft and the lead in establishing the first ADC engineering team in Nairobi, led the pomp and pageant opening ceremonies in Nairobi, Kenya and were joined by Microsoft Technical Fellow, Alex Kipman, for the Lagos launch event.
The Nairobi Microsoft Africa Development Center site software engineers contribute to building Windows and Office 365 products and services. Whilst the Lagos site software engineers contribute to building Microsoft Azure services that power new Augmented Reality experiences.
At the launch events, Microsoft executives shared the company was going to hire about five hundred software engineers by 2023, across both center sites. With plans to hire 100 software engineers by the end of 2019.
We reached out to Microsoft for the latest updates on the Microsoft Africa development centers and haven’t gotten any feedback as at publishing this. We will bring you updates when Microsoft responds.
The world is eager to do business with Africa but finds it difficult to access African markets because of poor infrastructure. Tonny Tugee, MD at SEACOM East Africa, discusses some of the factors impacting the development of infrastructure in Africa.
African Markets
Without a doubt, Africa is one of the world’s fastest-growing economic hubs. Crucial to this rate of development is the ability to meet the demand for key infrastructure. At the end of last year, a World Bank economic update reported that Kenya has seen its Information and Communications Technology (ICT) sector grow at an average of 10.8% annually since 2016, becoming a significant source of economic development and job creation with spillover effects in almost every sector of the economy.
While this is hugely encouraging news for Kenyans, it also raises questions about the factors which might impact the ongoing positive trajectory of infrastructure development, both in Kenya and the rest of the continent.
Fixed-line networks
In 2019, Kenya invested US$59 million in the Djibouti Africa Regional Express (DARE) submarine fibre-optic cable system, which reached the shores of Mombasa during March this year. The others include SEACOM, East African Marine System (TEAMS), Eastern African Submarine Cable System (EASsy) and Lion2 systems. According to Njoroge Nani Mungai, Chairman of Kenya’s Communications Authority, the investment demonstrates the government’s desire to improve Kenya’s position as a regional IT hub. It is also aimed at guaranteeing both companies and individuals’ access to a faster, more secure, and more reliable Internet connection. Revenues generated by the digital economy should reach US$23,000 billion by 2025, thanks to investments 6.7 times higher than those in other sectors.
In addition, terrestrial fibre networks have continued to expand, offering more connectivity options and better network redundancy – great news for land-locked countries. However, according to MainOne’s CEO, Funke Opeke, these remain underutilized due to high prices and a failure to establish an enabling environment.
Mobile network coverage
Telecommunications has continued to register positive growth, with increased uptake and usage of mobile phone services. High-bandwidth Internet infrastructure has become more widely available, while the rollout of 4G infrastructure by the MNOs has already led to substantial growth in subscriptions to data and Internet services. With the expansion of fibre-optic infrastructure across the country, more homes will be connected to better-quality, higher-speed broadband services, which will be extended to the rural areas.
Consequently, the increase in mobile network coverage has led to a decline in fixed-line networks related to voice calls. Alternative solutions need to be considered to ensure a stable Internet connection throughout Kenya to bridge the rural and urban digital development divide.
Poor infrastructure
The world is eager to do business with Africa but finds it difficult to access African markets because of poor infrastructure. Greater economic activity, enhanced efficiency and increased competitiveness are hampered by inadequate transport, communication, water, and power infrastructure. The World Bank economic update, mentioned earlier, highlighted challenges relating to the inadequate power supply, transport networks and communication systems as crucial to ensuring ongoing connectivity, and continental economic development. It found that the poor state of infrastructure in sub-Saharan Africa reduced national economic growth by two percentage points every year and cut business productivity by as much as 40%.
It is estimated that about US$93 billion is needed annually over the next decade to overhaul sub-Saharan African infrastructure. About two-thirds or $60 billion of that is needed for entirely new infrastructure and $30 billion for the maintenance of existing infrastructure. Only about $25 billion annually is being spent on capital expenditure, leaving a substantial shortfall that must be financed.
Economic potential
The economic climate of Kenya will determine access to the tools needed to build the relevant infrastructure. According to André Pottas, Deloitte’s Corporate Finance Advisory Leader for sub-Saharan Africa, this translates into exciting opportunities for global investors who need to look past the traditional Western view of Africa as a homogeneous block and undertake the detailed research required to understand the nuances and unique opportunities of each region and each individual country.
The key to unlocking Kenya
With governments across the continent committing billions of dollars to infrastructure, Africa is at the start of a 20 to 30-year infrastructure development boom. Fortunately, we have access to a global network of exports, which we need to be utilizing optimally to ensure a stable infrastructure, both digital and physical.
However, in preparation for the boom, the only way for Africa’s infrastructure backlogs to be cleared and to unlock connectivity and communications in Kenya is through globally competitive, growth-oriented, mobile, and digital technology businesses. It is imperative to establish partnerships with trusted private sector players who already cater to the local and international communications market with reliable connectivity solutions.
