The Next Wave: She can capitalize

“I am the best in the world, in Africa and Kenya. Nobody can beat me up.” ~ Jane Mugo

Many people cringed at the BBC’s film on the infamous Kenyan spy queen. The video has a high unlike-to-like ratio on YouTube. But the quote above is pretty badass and unbeatable. You have to stan an African woman claiming her place in the world.

Africa is full of singular women with world-conquering potential. But they’ve not always had access to the podiums they deserve to stand behind. This decade feels like the perfect time to definitively fix this. But how do you make the 2020s the decade for African tech women?

We are consciously shaping The Next Wave to be your future-focused innovation guide, a weekly special on the tech-driven Africa Africans deserve. Subscribe so you don’t miss out on any edition. Read last week’s edition here.  

Does your technology help counter disinformation? Enter the U.S. – Africa Tech Challenge for an opportunity to win up to $250,000 USD! Now accepting submissions until February 28, 2021. Apply here.

More Angels, please

The gender funding gap in Africa is best highlighted by statistics.

According to the World Bank, male-owned companies receive six times more capital on average than female-owned firms. The funding gap between male and female entrepreneurs in Africa is put at about $42 billion by the Africa Development Bank.

In 2019, 98 African startups raised at least $1 million from investors but only 13 of those startups were founded by women. Since 2010, only 10% of West African startups founded by women have raised up to $1 million. 

One explanation for these numbers is that there are not enough women to fund; if there are fewer girls than boys in STEM classes and fewer female engineers at startups, fewer women than men will be in boardrooms pitching to investors.

But leading voices in the African tech community now see this argument, while logical, as more of a cop-out than a harmless expression of reality. Change, they say, can happen by enforcing a top-down strategy of influence.

With the pandemic reducing the need for physical contact, pitch decks should be judged on the merit of the ideas, not the appearance of the person making a Powerpoint presentation.

In any case, women have taken up the challenge of inverting the funding pipeline pyramid from the top.

Alitheia IDF, a collaboration of two female-owned VC firms, reached its second close at $75 million in 2020 to invest in women-led African enterprises. Janngo Capital, led by Senegalese entrepreneur Fatoumata Ba, raised €15 million ($16.5 million) towards a target €60 million (US$65 million) fund to invest in women-led businesses and/or those that directly benefit women.

Female-focused angel funds are joining the fray too. 

Last week, Odunayo Eweniyi of Piggyvest and Eloho Omame of Endeavor Nigeria floated FirstCheck to issue “ridiculously early” $25,000 checks to female entrepreneurs. Few days later, Future Africa founder Iyin Aboyeji announced their intention to focus $1 million to fund female startups.

FirstCheck plans to consider founders at the ideation stage of their entrepreneurial journey. After the first check, they help them close a pre-seed round in 12 months. This might be the way to consciously grow the funding pool for women in tech.

[ Read our in-depth report on the state of Nigerian Women in Tech ]

Where local and international venture capital firms appear biased towards more established founders or men (due to pattern matching), female tech founders can take up the mantle as angel groups to jumpstart the process of having more women involved. 

Ultimately, this effort is predicated on a simple observation: African women have the desire and capacity to build solutions that create value particular to women’s needs – like Mumspring, and the BabyBliss Group – and those that serve the world. 

Ethiopia-born entrepreneur Sara Menker founded Gro Intelligence to solve global food problems. Temi Giwa-Tubson’s LifeBank is a gender-neutral lifesaving company for all Nigerians. Eweniyi’s Piggyvest reported that it paid out ₦95 billion (~$250 million) to its users in 2020.

If these African women can, millions more can. All that remains is for more first checks to be signed.

Made in Lagos

Tope Awotona’s story captured Nigerians’ imagination last week after his startup, Calendly, raised $350m to become valued at $3 billion. Calendly is not an African startup but Awotona often cites his Lagos upbringing in his success story that we may as well claim him. 

Jumia hit a $4.6 billion market capitalization last Monday on the New York Stock Exchange. The e-commerce company’s stock appears to be stabilizing after a bruising opening couple of months last year. What lies ahead remains uncertain but they can afford to feel bullish right now.

Two of my colleagues were aghast when I asked if they would borrow money to buy a laptop or phone. Their pessimism is down to the trust issues in Nigeria, but ‘Buy Now Pay Later’ zero-interest loans for online shoppers are mainstream in Western cultures. I took a look at how Carbon, the Nigerian fintech, might implement BNPL. Read here.

THE CRYSTAL BALL

Every week, we ask our readers, stakeholders, and operators in Africa’s tech ecosystem what they think the new normal looks like. We share their thoughts and opinions in this section of The Next Wave. You can share yours with us via email [koromone@bigcabal.com] with ‘The Crystal Ball’ in the subject line.

Gro Intelligence is Sara’s first major stint at entrepreneurship, albeit a highly successful one. Earlier this month, the startup closed an $85m Series B round co-led by Intel Capital, Africa Internet Ventures, and the family offices of Ronald Lauder and Eric Zinterhofer, the largest of its kind yet raised within the African tech startup ecosystem. 

Prior to that, the company had raised $17.4 million in a Series A round led by TPG Growth. Today, the agritech startup has raised over $115m.

Before fund-raising and round-closing, Sara was a commodities trader and vice president at Morgan Stanley. She quit her job because she believed her data analytics skills could contribute to social good. 

And she wasn’t wrong. She predicts that by 2027, the world could experience a food shortfall equivalent to over $ 2 trillion, and so the company is keenly studying food prices in global markets. The data uncovered can encourage the building of storage facilities to cut food waste at the farm level or help to price credit accurately. 

Sara Menker’s work at Gro Intelligence is important not just because it’s trying to protect the world from a crisis that could have devastating effects, but because by achieving so much in such a short span of time, she is an excellent inspiration for young African girls who may hope to tread the entrepreneurial path someday. 

Thank you for taking the time to read today’s edition of The Next Wave. Remember to stay safe when you are out in public places– protect others by wearing your mask and sanitizing your hands.

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– Alexander O. Onukwue, Staff Writer, TechCabal