Every African has a side hustle. At birth, you’re given five names and a side hustle. It’s literally in our DNA.
Beyonic started as my side hustle. I had a hunch about cloud software, and for a couple of years, I tested my product after hours and on weekends. From inception in 2005, through its pivot in 2013, Beyonic has been a part of my life for 15 years.
Recently, a friend reminded me of how, in 2007, we rented a rundown house, slapped on a fresh coat of paint, put a signpost upfront, cots in the backroom to sleep, and used the front entry as office space. Work stopped multiple times a day because we were neighbors to what must have been the loudest nursery school in the world. For the African startup, the “garage in the suburbs” is to be strived for, it’s our “corner office suite.” Our startups often have much humbler beginnings.
Every pitch-deck has that exit slide — “In 2011, Visa bought Fundamo, an African Fintech …” — Luke, 2013.
Last week, we announced the sale of Beyonic to MFS Africa. Amid the fanfare and socially distanced pats-on-the-back, I am reflective. Today, intermingled with the sense of accomplishment is a feeling of camaraderie with my fellow African entrepreneurs.
African entrepreneurs know the founder’s life is precarious & thrifty. It’s as natural as walking for us to hustle and scrimp. This post is a tribute to those often unacknowledged warriors who contribute daily to helping Africa lead the world in forming new companies.
The 9 to 5 incubator
There is no agreement about when a small business becomes a startup. Is it when the proprietor goes full-time? Is it when employees join or when outside investors put money into the venture? I think a startup is born when a mental switch flips on in the founder’s brain, and the founder goes from thinking, “this is a fun side-project” to “this is a business that I want to grow, scale and exit.”
When this switch flipped on for me, I didn’t immediately quit my job. I kept Beyonic as a side project. I bootstrapped.
For many African startups, bootstrapping is the right move. And for many, it is the only option. This was the reality for tech startups in Uganda in the mid-2000s, and it was certainly true for me. With no one, that I knew, putting money into tech startups, I had no choice but to bootstrap as I courted customers and partners.
The biggest seed funder of early-stage African startups is “the 9 to 5”. The unsung heroes in the African startup ecosystem are companies that allow an employee to invest in their side gig. These companies keep their offices open to employees after hours and on weekends, providing fast internet and a quiet workspace to hack and learn. These companies provide the mentorship and networks for the budding inventor. For me, my 9 to 5 support came from Charles Musisi of Computer Frontiers International, Badru Ntege of One2net, and Grameen Foundation,among others.
In 2010, I’d successfully spun-out, bootstrapped, and sold a realtime mobile-to-tv SaaScompany called BeMobile with some partners, based on Beyonic’s technology. This exit gave my partners some liquidity & was a somewhat lovely conclusion to Beyonic’s bootstrapping phase.
Home advantage
With some intellectual property I’d retained, ideas for where telecom and the mobile payments industries were going, and importantly, the wisdom of the past seven years, I sought access to western networks. I wanted to increase Beyonic’s visibility and expand my networks and figured a business graduate degree couldn’t hurt. But mostly, I was following my gut and relying on my experience and intuition. The path emerged as I went. While moving to the US ultimately helped with securing funding and customers, that wasn’t my primary goal.
2012 to 2020 were fun times for me. My team-mates at the University of Texas at Austin, including Dan — ever the boundless optimist — gave me the boost of morale needed to tackle the next eight years. We raised some money, grew our networks (kudos Techstars), and hit the ground hard. We were innovating, building new tools, creating novel user experiences, making things fast, and breaking them faster. We challenged the status quo and fought for a seat at the table. We punched above our weight and became a household name. One of the moments I cherish is when we saw an open job listing from a multi-national company which included “knowledge of Beyonic’s platform” as one of the desirable traits for the new hire.
Dan remembers things a little scrappier than I do, but that may in part be because whenever he came to Africa, he was leaving his home. For me, I was returning home. I think this made a huge difference. The easiest place to start a company is at home. You know the market, and you’ve created relationships over the years that you can leverage. This “home advantage,” the depth of understanding of the customer, the ecosystem, and the opportunities, is an often underrated quality of local entrepreneurs. It is foundational and fundamental in developing the type of companies that are right for the region.
During this period, I had to reinvent myself countless times. And each time, it was tough to do. I am pretty charismatic, and I exude a quiet confidence that’s existed since my teens. I’ve always been able to grow a small network of close confidants who believed in me and the cause. I grew up in a culture of “show, don’t tell.” We learned that work should speak for itself, and one shouldn’t have to “sell” oneself too much. As Beyonic scaled during this period, it was quickly apparent that I needed to show AND tell.
I learned that loud charisma is fashionable in testosterone-filled tech circles and boardrooms. And it was also necessary to effectively share my vision of Beyonic with a growing, more distributed team. I tried to grow into these changes without losing my authenticity, which matters to me. I like to think I’m continually making progress 🙂
These skills helped tell our story better, but what hit home was the fact that we had something to show. We were delivering real impact at home, where it mattered.
Expanding the family, aka. “the whole is bigger than the sum…”
While Beyonic wouldn’t have left the station if I hadn’t bootstrapped, we wouldn’t have had this exit if we’d only bootstrapped. We had to raise money, and go all-in to get the scale we wanted. We found investors daring enough to bet on an African B2B tech company, and the rest is history. But we are also a profitable company on a high growth trajectory. Why did we sell?
This exit is a win for the ecosystem, no doubt. But in contrast to some of my colleagues who are getting off the Beyonic bus, I’m not. I see this less as an exit and more like the next natural phase of Beyonic’s story. In the space where we operate, consolidation is beneficial for the continent. There are lots of amazing entrepreneurs doing amazing things in each African country I visit. I think we can benefit from reaching across the borders and offering a hand in commercial partnership.
We will see more of these commercial partnerships happen, and I think we will see more of them turn into the mergers, acquisitions, and exits that Africa needs. I hope Beyonic and MFS Africa can be a model of a partnership done right. And I look forward to many more examples in the future.
Thanks for riding along.
Luke Kyohere is the founder of Beyonic, a seven-year-old Uganda-based fintech startup recently acquired by pan-African cross-border payments leader, MFS Africa.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.