When Abasiama Idaresit founded a digital marketing company in Nigeria, he quickly learned how hard life can be for start-ups in the African country: no one would lend him money to hire employees or to have an office, so Idaresit spent eight months in streets of Lagos, trying to convince customers that his plan to develop online advertising campaigns was successful.
“During the first eight months, I didn't make a cent. I was demoralized. At one point I asked myself: is it really worth it?” commented Idaresit.
But then a customer arrived. It took a money-back guarantee to snag a $250 contract to manage the online presence of a company specializing in baby products. Within two months, the takings had grown by a thousand dollars a month. And then they reached $100.
Idaresit's company, Wild Fusions, is now a Google Adwords partner and is worth $20 million, with profits doubling every year. His clients today are Samsung, Unilever and Ecobank, all interested in developing online marketing strategies in Africa.
The story of Wild Fusion, told by Reuters, is well representative of the start-ups of the Black Continent, a poor area that is growing. Also thanks to technologies.
In other emerging markets, such as Asia and Latin America, a tech start-up with a good idea is expected to attract investors in a system with a growing economy and little competition.
For investors, Africa is not yet part of the club, for various reasons. Among many, the low penetration of the Internet, the scarcity of capital and the lack of adequate management.
For experts, it's still too early to tell whether African tech companies will be able to challenge other emerging markets, but a concerted effort is underway to build the foundation – the infrastructure – to facilitate expansion.
The iHub platform, in Kenya, founded in 2010 and supported by Hivos, Google and Omidyar Network, is a meeting point for entrepreneurs and investors. And 50 companies have already been born with this system.
Another example is the Savannah Fund in East Africa, which offers start-ups between $25 and $500 in exchange for equity.
In Ghana, the Meltwater Entrepreneurial School of Technology offers students a year of training with professionals from around the world who teach software development and entrepreneurship. The best graduates get an extra year in a tech incubator, in a house connected to the main campus by a rope bridge.
When the right idea with the necessary support finds a hungry market, a start-up can grow rapidly, as the experience of Nigerian online stores Jumia shows.
Founded by two Nigerian Harvard Business School graduates, the company took advantage of the country's Internet penetration (about 30%) and the lack of supply for the middle class in the continent's most populous nation.
Jumia grows by 20% every month. Orders went from $50-100 a day to millions of dollars a month. And now the company is aiming to expand beyond Nigeria.
