
African Startups Are Increasingly Attractive to Investors - thought
http://afridigest.com/african-startups-increasingly-attractive-investors/?utm_source=hn&utm_medium=hn&utm_campaign=hn
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grecy
I feel the need to make a top level comment here.

I am in West Africa right now, have been to 15 countries in 12 months, and
will visit another ~22 over the next 12-18.

CNN, Fox, the whole western media are not telling you the truth about life
here. They are showing you the sensational stuff that makes headlines, nothing
more. Because of that, anyone that has never been has very little information
about the realities.

The comments in this thread are so far from the truth they are a disgrace.
People are commenting here that clearly have no actual experience, and are
just parroting what the media said about africa in the 1980s. It is not the
1980s now.

Comments about constant war, "most African countries already have huge
problems to provide even basic needs to already existing population", etc.
just show how ignorant about the realities here people in the developed world
are.

There is a massive, massive amount of development here, and hundreds of
millions of extremely happy, friendly and kind people pulling themselves up
into the middle class and beyond.

If you "think" otherwise I challenge you to come here and see for yourself.
You will be utterly shocked (I was, after years and years of research and
talking to >50 people who have done what I am doing now)

~~~
_fizz_buzz_
The thing is, Africa is also a huge continent. So, if something bad happens in
Somalia people in the west assume that all Africa is in big trouble. In the
west we have no sense of how big Africa is and work under insufficient
information, e.g. I know someone who has a travel company in Uganda and when
ebola broke out in West Africa, people canceled their trips and business
plunged. There were no ebola cases in Uganda. The US or Europe were effected
more by the ebola outbreak than Uganda [1]. The vast majority of people in
western countries, don't understand Africa.

[1]
[https://en.wikipedia.org/wiki/West_African_Ebola_virus_epide...](https://en.wikipedia.org/wiki/West_African_Ebola_virus_epidemic#/media/File:Ebola_Outbreak_Map_\(ongoing\).png)

~~~
grecy
> _The thing is, Africa is also a huge continent. The vast majority of people
> in western countries, don 't understand Africa._

I agree 100%.

Said in another way, the Western Media is doing a terrible job of informing
people in Western countries about Africa.

Having been here a year, I now go so far as to say the Media are doing a
negligent job. It's disgusting and is causing real harm (as you illustrate).

~~~
eurticket
> the Western Media is doing a terrible job of informing people in Western
> countries...

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darshandsoni
As an expatriate Kenyan, looking back at home over the last few years has
shown a huge increase in investment by both MNCs setting up there and
investors flocking to back local companies. But it's usually a huge wave of
euphoria, helped by a government that wants to appear welcoming, which then
peters out as the company projects get bogged down in corruption, resource
volatility and inconsistent outflow of human capital. Eventually it becomes a
sunk cost but the company continues to operate there low-key while they look
for other strategies.

I suspect a very similar situation is happening in many other African states
that are pro-investment.

I would say that a key thing to bear in mind is that investments in Africa are
first and foremost just that: investments. They could fail. And treating it as
a homogeneous body is akin to saying you're investing in North America instead
of saying you're investing in a specific company in South Carolina because of
xyz economic, social and political factors.

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pkaler
I'm a very happy investor in Ensibuuko, mentioned in the article above. My
hypothesis is that Africa over the next two decades will look like India and
China the previous two decades. There will be a large Alibaba-like company
that emerges from Africa.

~~~
djb_hackernews
I've seen this prediction about Africa for the past 20 years. And it's
probably even older than that. It's not a particularly bold one, in my
opinion, but it is a flawed one.

Africa is not a country, it is a continent. Comparing it to India or China
(whose economies haven't really paid off for foreign investors as much as
you'd think) is a major flaw. China and India have an incredibly consistent
society from corner to corner and well organized governments. Africa on the
other hand is a few dozen sovereign countries, without a common culture or
language between them. They are constantly at war with each other and within
each other.

I think in order to extract the full economic potential of Africa you'll need
to see unification at levels that put the EU to shame and at least a decade of
trusted, non-corrupt, forward looking governance.

I think it'll happen, but not for a very, very long time. Until then, follow
the Chinese govt investments in Africa and try to tag along.

~~~
michaelchisari
_India have an incredibly consistent society from corner to corner and well
organized governments._

That is literally the first time I have ever heard anyone, Indian or not,
describe India that way.

~~~
dragandj
I've been to India several times, and as a foreigner looking from the outside,
I can say that it has much more consistent society than it may look to the
Indians. The government, however corrupt, is still way better than what most
African countries have.

~~~
jacquesm
And India is far less fragmented than Africa.

~~~
Pxtl
They have like a dozen languages in like 5 different scripts. Their advantage
is that English is ending up as the common tongue of India, so there's lots of
English there.

~~~
unmole
More like 22 official languages in 10 scripts.

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mc32
And they should be. It's a big continent with lots of people a growing middle
class and lots of room for all sorts of development. Im sure there will be
some pushback about foreigners investing and making money off locals, but
that's kind of the price of progress. Someone has to be the miss moneybags, be
it locals or non locals.

~~~
1001101
Africa's population is projected to ~quadruple to approx 4 billion by 2100
(will have almost as many people as Asia at this point), and will account for
most of the world's population growth to 2050 (1.3 bil+). [1] It's a huge
opportunity, and good luck to anyone who can provide value for the burgeoning
population.

[1]
[https://esa.un.org/unpd/wpp/Publications/Files/Key_Findings_...](https://esa.un.org/unpd/wpp/Publications/Files/Key_Findings_WPP_2015.pdf)

~~~
dragandj
Considering how most African countries already have huge problems to provide
even basic needs to already existing population, I can't see how that is a
good thing. It seems to me that Africa does not lack headcount now, it lacks
stable society and opportunities to emancipate vast masses of dirt poor
people...

~~~
doktrin
I agree. Out of control population growth can of course be spun as an economic
opportunity, but it first and foremost feels like a humanitarian disaster
waiting to happen. Not only for Africa, but for the world at large.

On the bright side, economic investment, growth & development might be one of
the best ways to eventually curb said population growth.

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zappo2938
The best way to know what demand for a product is to ask yourself, "What do I
need?" The people who know what demand is in Africa are people in Africa who
ask that question. We can't answer it in San Jose. The solutions to their
problems will come from within.

~~~
virmundi
Other countries can help. "What do I need?" Answer:"scalable, mobile first
(only) blah blah." If you don't know any of that, the how's, you can get
outside help. Hopefully outside mentorship that comes from outside money.

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azundo
Very encouraging to see this level of interest in investing in African
startups from SV investors and not just from traditional impact investors.

There is an incredible amount of opportunity to build mobile digital services
targeted at markets where offline functionality is a must and low-end Android
devices are the norm. Hopefully the interest and investment in fintech will
also mean that payments infrastructure will continue to improve and get
relatively cheaper over time.

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jernfrost
Reading some of the overly negative comments, I'd like to add some
perspective. Africa might not make sense to compare to India and China
earlier, but I like to often compare it to another troubled region, the middle
east.

We have seen far more positive developments towards democracy in Africa than
in the middle east. Military conflicts in Africa seems to be winding down,
while they just seem to get worse in the middle east.

More religious diversity, not just Islam, I think is a gain for Africa. I
don't think they will get bogged down in religious extremism as in the middle
east.

To those who claim unified India and China as such a big advantage. I think
being unified has just short term advantages, but lots of longer term
problems. Look at Europe. A key reason Europe sped past China in the past, was
because it was NOT UNIFIED. No single stupid leader could ruin European
progress. It worked like a free market of ideas where bad ideas get weeded
out. In China you had emperors who would declare that going overseas is bad.
And then with a brush stroke, an area the size of a continent stops trading or
exploring overseas completely, leaving that to the European upstarts.

The advantage of Africa being divided is that it provides a big sandbox to
experiment with what works and what doesn't. We see many smaller countries
have success like Rwanda. This allows other countries to evaluate what works
and copy good ideas and discard bad ones.

Another key advantage today, is that we are passed the naive western aid of
the past. Today we got China making big investments in infrastructure, mines
etc getting the economies going. And I think it is a positive thing with all
the people they are sending in as it allows Africans to learn from other
countries how they work and do things. China not being as developed as the
west is probably an advantage as it is easier to understand each other.

Western countries are so far ahead that we often have no clue about how to
operate or do business in less developed countries. We make a lot of stupid
assumptions, which only work in modern well developed economies. I think the
Chinese understand a lot better of to get things working in Africa.

And finally lets not forget another advantage. Unlike the middle east, African
countries can take advantage of their heritage of English and French from
colonial times, which makes it easier for them to connect to the global
economy.

~~~
IkmoIkmo
> More religious diversity, not just Islam, I think is a gain for Africa. I
> don't think they will get bogged down in religious extremism as in the
> middle east.

The biggest religion in Africa isn't islam, it's Christianity. Meanwhile, the
biggest religion in Asia is Islam and it does just fine. The middle east's
problem's aren't religious, they're political. Nationalism and geopolitical
conflicts get wrapped into the most convenient us vs them wrappingpaper
available, in the middle east it's often religion. But let's be frank here,
Saudi Arabia and Iran aren't in conflict because they believe in a radically
different way of religious life.

Your stuff about unification conveniently skips over the part where China sped
past every other poor country in large part because it was unified and could
move in one direction.

Rwanda is tricky... it's probably home to the absolute worst tragedy in my
lifetime. 70% of a peoples was eradicated. Beyond that, it's still dirt-poor,
90% of the population is engaged in subsistence farming, 80% live on less than
$3 a day, 60% less than $1.90. I assume you're referencing to economic growth
which has been really nice, but it's tricky to see it separate from the
foreign aid which represents 30-40% of the budget. It's not particularly hard
to improve income levels from $1.90 a day to $2 if you're pouring in $100 of
foreign aid per person per year and lots more financing. (a great playing
ground for Chinese companies to build an economy indeed.)

Beyond that, there are 25 different countries who've had at least 75% of the
average growth rate of Rwanda in the past 10 years, its economic growth has
been great but things have actually gotten quite a bit better in Africa across
the board. When Rwanda's foreign aid was temporarily cut a few years ago after
accusations of aiding rebels the growth rate halved.

I don't see the Rwanda (0.9% of Africa's population) necessarily as a model
for the rest (99.1%) of Africa.

Agreed on all your other points.

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puranjay
Lots of very promising ideas here.

I particularly like this one: [http://twigafoods.com/](http://twigafoods.com/)

We're so focused on solving the middle class problems in my country (India)
that we've forgotten about the problems lower class people serving the middle
class go through.

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ge96
Could they put solar panels everywhere in Africa and sell power to other
continents by undersea cables like internet that would be interesting.

