Business Lessons - Afrikan Heroes

Three Important Reasons for African SMEs to Revise their Business Models Post-COVID

June 23, 2021

Soromfe Uzomah, Head: Strategic Partnerships, Microsoft 4Afrika.

By Soromfe Uzomah

For every company, innovation is tremendously important, but in many cases, innovation is only associated with new products or technical renewals. However, business model innovations can be significantly more profitable, and current pandemic-driven changes in customer behaviour and technological innovations have created a window of opportunity for companies to explore new business models.

Every company has a business model, but at times, this must change to ensure the company’s ongoing success and ultimately, its survival.

Even minor changes to a business model can have great benefit to customers and businesses – and the goal of business model innovation is to better satisfy the needs of the customer than the existing one allows for.

Most innovation is incremental, such as product innovation, but changing a business model is likely more radical, as it changes the foundational decisions on which the business operates and as such, brings higher risk, but also the chance of long-term survival and success. One only has to think of companies like Uber, Airbnb or Spotify, who were able to disrupt each of their industry’s traditional business models by tweaking or inverting them.

Here are 3 important reasons for African SMEs to reimagine their business models post-COVID:

Times of Change Require New Thinking

In times of significant change, such as those stemming from a global pandemic and the associated impacts of the disruption to global trade, it’s pertinent for companies to think about how the business environment is changing, and what business model changes might help the company adapt to this shifting landscape.

Whether this is a reinvention of a business model to manage fundamental industry changes, adaptation and experimentation to accommodate fluctuations or pivots in an industry, a maverick approach that embraces employing an advantage to revolutionise an industry, or the adventurer approach that explores or expands into altogether new or adjacent territories, businesses cannot afford the luxury of complacency.

McKinsey reports that Africa has large unserved markets and companies need the imagination to see unmet demands or unsolved problems as opportunities.

Indeed, smaller and medium-sized enterprises (SMEs) have a critical role to play in accelerating economic development, serving the unmet needs of African markets, and especially creating jobs.

Four innovation practices are important here: creating products and services that fulfil Africa’s unmet needs; rethinking business models to truly engage with customers; getting lean to drive down costs and price points, and harnessing technology to unleash the next wave of innovation.

Startups and SMEs are at an advantage over big business, as they can adapt and iterate their business models as they are in the process of business design, either as a startup at the outset of their development process or with the agility that comes from a small, lean organisation.

This is not to suggest that big businesses are incapable of doing the same, as we know that several large, well-established organisations have leaned into their advantage of greater resources to challenge their existing business model and disrupt themselves. Think for example of Microsoft itself, which has moved from being primarily a hardware company to become more cloud-focused, embracing enterprise and services.

Africa is a Continent of Innovators

While Africa has been viewed as being behind the curve in recent decades, it is quickly becoming a hotbed of innovation, and the continent is now an eager adopter of and innovator in all things digital and mobile.

Many challenges remain, but the seed of innovation has taken root. African startups and SMEs, along with non-profits and big companies, are using innovative technology to solve pressing needs in their communities.

Startups such as Microsoft 4Afrika partners Twiga Foods, M-Kopa Solar and Farmerline are leading the way in innovating for challenges as widespread as professionalising East Africa’s market economy and offering mobile weather forecasts to rural smallholder farmers, to lighting up affordable and accessible solar grids.

And Nigerian fintech Flutterwave was recently named on TIME’s 2021 list of the 100 Most Influential Companies in the world in the Pioneers section for its work enabling digital payments for African companies. Deepening the continent’s competitive capabilities is essential if we are to diversify the continent’s economies.

This is the great benefit of the widespread use of technology – digital transformation has played an important role in advancing innovation and helping African entrepreneurs find ingenious ways to solve local problems.

The Invention Economy Must Aim to Become the Innovation Economy

The invention economy – where there are lots of great ideas, but a lack of scalable products – must become an innovation economy, where competitive products are produced at scale. Invention is important, but it only becomes innovation when it solves a customer problem and has a business model that creates or captures value.

However, innovation in Africa is often stymied by resource constraints, a lack of access for SMEs to financing, a lack of technical skills and inadequate infrastructure that make it hard to generate profits and generate the growth needed to survive.

We must strengthen the innovation ecosystems in Africa.

For SMEs and startups to thrive in the competitive world of business, they need to progressively innovate to ensure that goods and services reach untapped customer needs, and for this business models must allow innovation to flourish. Here accelerators and innovation hubs have an important role to play in nurturing talent and identifying and supporting future unicorns.

While the COVID-19 pandemic has presented significant challenges to SMEs, it also represents an opportunity to adapt in order to make the most of their resources.

Business model innovation is one of the most effective ways for companies to stand out from the competition and secure their futures, particularly in turbulent times.

Soromfe Uzomah, Head: Strategic Partnerships, Microsoft 4Afrika.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Nigeria bans Twitter – and shoots itself in the foot

June 9, 2021

By Tolu Olarewaju

In recent years, Lagos, Nigeria’s biggest city, has become Africa’s most attractive tech hub for investors. But that could be imperiled by the government’s decision to suspend Twitter’s operations in the country.

Although no direct connection has been drawn, the ban came two days after Twitter took down a tweet by President Muhammadu Buhari. Twitter claimed the message had been deleted because it violated its rules against “abusive behaviour”. The ban could be in retaliation.

A new chill entered into the relationship between Nigeria and Twitter in mid-April when the social media platform chose Ghana for its regional headquarters. Nigeria’s market is bigger than Ghana’s; with more Twitter users than Ghana has citizens. Ghana won because its government has created an attractive environment for external investors by improving the country’s electricity output, and investing in good roads and a paperless port project.

Nevertheless, Nigeria’s fledgling technology sector had been seen as an attractive proposition to investors because of the pool of talent in Nigeria, increasing smartphone penetration and access to the Nigerian market of 200 million people.

The Nigerian technology scene, concentrated in Lagos, is a recent and rare success story. One particular area of growth has been the fintech sector.

But the ban makes it difficult for the government to argue that it is friendly to technology enterprises. The Nigerian government has often called on foreign investors to invest in Nigerian technology start-ups and support Nigeria’s technology ecosystem.

Spooking investors

For example, in 2016 Buhari hosted Mark Zuckerberg on the Facebook CEO’s first visit to sub-Saharan Africa. Facebook is set to open an office in the second quarter of 2021 in Lagos. The indefinite Twitter suspension could prove to be a setback by spooking investors.

Nigeria’s fintech start-ups have begun to engage innovatively with segments of the population that can’t access traditional financial services. About 56% of Nigerian adults are unbanked.

Homegrown businesses Flutterwave and Paystack are two examples of fintech start-ups that have been able to secure investments recently.

Flutterwave provides payment solutions for businesses. It recently attracted investment of US$170-million from a consortium of foreign investors. Paystack, which also provides payment solutions and customer analytics, attracted $200-million from US payments giant Stripe.

The two start-ups recently earned the coveted unicorn status. This is a reference to privately held technology start-up businesses valued at more than $1-billion. This means that Flutterwave and Paystack are already, on paper, more valuable than most of Nigeria’s biggest banks.

The Twitter suspension could make it harder for technology entrepreneurs like this to get investment. Technology entrepreneurs will now need to convince investors about regulatory risks. This will be especially so if their business models require an active social media presence.

The Twitter ban seems to support the notion that the Nigerian government does not like to be held accountable for its actions. The Twitter ban will also reduce the exposure of Nigerian technology entrepreneurs to the world, undermining their ability to attract funding and grow their markets.

Finally, it sits at odds with the government’s goal of economic growth and openness by sending a signal that Nigeria is not entirely open for technology business.

Many small and medium enterprises in Nigeria use social media, including Twitter, for marketing, pitching, attracting investors and reaching customers.

It started on Twitter

Examples of these are start-up technology firms like Cowrywise, a savings and investment company, and Piggyvest, an online savings platform.

Not too long ago, Cowrywise announced it was raising $3-million in investment funding. One of the participating investors, Sahil Lavingia, tweeted that his investment conversation started via a Twitter direct message. Lavingia is the founder of Gumroad, a San Francisco based online platform that facilitates the sale of products by creators directly to consumers.

Lavingia invested in the Nigerian company and posted on Twitter: “Excited to invest in another African startup! The power of Twitter.”

Nigerian companies have also used social media to raise awareness of their brands. Some do this through “influencers” like the lifestyle and entertainment bloggers Linda Ikeji and Uche Eze Pedro, as well as the music blogger Demola Ogundele of Notjustok.

Nigeria’s information minister, Lai Mohammed, criticised Twitter for “double standards” because the social media company did not, until recently, delete or flag inflammatory tweets by Mazi Nnamdi Kanu, the separatist group leader.

But the Twitter ban seems to support the notion that the Nigerian government does not like to be held accountable for its actions and scrutinised when it falls short. It reeks of censorship and is reminiscent of non-democratic institutions. The president did not have to use the platform to air his views and should have been advised that using Twitter means being subject to its rules.

If the spat between the Nigerian government and Twitter is not de-escalated, the country’s thriving technology sector will suffer. This at a time when Nigeria needs to tap into technology to address its socio-economic challenges. Chief among these is the urgent need to reduce its dependency on oil and improve its infrastructure. Technology can help with that.

Tolu Olarewaju teaches Economics at Staffordshire University UK

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

South Africa’s Food App, Fomo Hits 50k Downloads Post-Launch

June 2, 2021

Ryan Marx and Jax Du Plessis, Fomo co-founders

The recently launched food app, Fomo which helps link users with specials at restaurants or events has obtained 50 000 downloads in the last five months showing that many are interested in culinary expeditions in the continent. Fomo is the brain child of Ryan Marx and Jax Du Plessis – who previously launched price comparison platforms CompareGuru and MoneyPanda – birthed the idea for the app after a night out. After having gone out for supper and left the restaurant, they saw specials at a different restaurant in the same area and wished they had gone there instead.

“When you search Google for what to do in a specific area, we’re often given generic lists that present us with limited options that are seldom updated,” Marx said.

Fomo uses geolocation to show users specials available at nearby restaurants listed on the app. The app provides users with contact details and operating hours for each listing, while users can book a table in the app, and rate the restaurant and special they tried.

They can also contact the restaurant to give them feedback, through a direct link provided in the app. There is an in-app feature that integrates with Google Maps for directions to the restaurant or to book an Uber. Restaurateurs can be listed on the app for ZAR499 (US$36) per month and have any two existing specials listed at a time.

“Our service allows them to get business in the door and removes the digital marketing aspect of promoting their service for them. We get to focus on our core competency, which is marketing their specials and they get to focus on theirs – doing what they do best,” Marx said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Enlabeler Hopeful of Growth in the AI Industry in Africa

May 19, 2021

Enlabeler founder and chief executive officer (CEO) Esther Hoogstad

South Africa’s startup Enlabeler has expressed hope of serious growth over the last couple of years, operating in the valuable “data labelling” niche especially for the continent of Africa. Enlabeler, which was founded as a data labelling service provider with the objective of offering end-to-end solutions for the classification, cleaning-up and labelling of datasets, has been in business since 2019.

Speaking of the company’s ambition, its founder and chief executive officer (CEO) Esther Hoogstad said that “Our platform turns raw, unlabelled data into high-quality training data. Our team of domain experts works with different data types, for a diverse range of industries. With this, Enlabeler creates flexible tech jobs and fights local unemployment across Africa.”

Enlabeler’s services include image and video annotation for computer vision models, transcriptions of audio files into text, translations of video and audio content to another local language, and text classification and entity recognition to train models in the area of sentiment analysis.

“Machine learning models and algorithms require big datasets to train the models. Often data scientists or engineers don’t have the time and capacity to spend hours and hours creating, cleaning and labeling datasets for their models. So, they ask Enlabeler to help-out. Companies are looking for end to end solutions in the data space and need quick, reliable and accurate data for their internal artificial intelligence (AI) and machine learning (ML) model,” Hoogstad said.

“Global competitors in the data labelling and annotation space are Sama, Labelbox, Labelfuse, Scale AI, and a few others. However, none of these are based in Africa, and none share the same mission to create and build datasets in Africa for domestic and international clients. Ultimately, it’s about empowering a whole new generation of professionals in the data industry that will gain experiences in the growing AI and ML space. Because of Enlabeler’s price point, customised service offering and quick turnaround times, we are able to compete with some of the more automated, large players based in the US.”

Read alos:Starting With Ethiopia And Tanzania, This Company Is Migrating African Countries To Blockchain Technology

Enlabeler raised funding in the middle of last year from new VC fund Entrepreneurs for Entrepreneurs (E4E) Africa to kickstart its operations and target international markets, and has seen strong uptake since.

“We now have a growing team of nine people and a database of over 350 data labellers, annotators and language specialists that often come from marginalised communities,” said Hoogstad.

“During 2020, we’ve created approximately 45 labelling jobs. In 2021, this has already been surpassed by more than 25 per cent. The current client mix is approximately 70 per cent South Africa-based and 30 per cent international.”

Business development wise, the team is growing its international footprint, and is currently in talks with several large scaling partners that will help Enlabeler grow.

“As Enlabeler works 100 per cent remotely and offers a fully integrated and secure data pipeline with the main cloud providers, such as Amazon Web Services (AWS), clients from anywhere in the world can be serviced by the Enlabeler team,” Hoogstad said.

“The current client portfolio consists of AI and ML companies, but also big infrastructure players based out of the Netherlands, the US and Canada. The team is actively working on onboarding new clients from mainland Europe and other regions.”

For the core labelling work, Enlabeler charges clients per dataset or per unit of labeling, with the client only paying for the output that meets their agreed quality standard. It also offers additional services, such as data pipeline integration, building of customised APIs, dataset creation and cleaning, for which it quotes clients on a case-by-case basis.

“This is in case of a longer-term need, where the client is looking for a continuous stream of labeled data to train and retrain their ML model. Enlabeler works on a retainer basis,” said Hoogstad.

Unlike many startups, Enlabeler was not really affected by the COVID-19 pandemic and associated lockdowns, as it has always been 100 per cent remote.

“The AI developments keep accelerating, and for all of these type of ML and AI models, big structured and clean datasets are a must – so we foresee a growing demand for our services,” Hoogstad said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

How Africa’s Uber and Bolt Drivers are Confronting their Platforms

April 26, 2021

Since Uber lost a class-action lawsuit in the UK; the Supreme Court ruled that its drivers were employees, not independent contractors, and were entitled to minimum wage, holiday pay and pensions plans, there have been a flurry of confrontations across the world as other drivers are rising against the platforms. In South Africa, Uber drivers are set to file a similar class-action lawsuit against the ride-hailing giant. They’re being assisted by Leigh Day, the law firm that, to get this, also represented Uber drivers in the UK.

The demands by Uber drivers in South Africa and the United Kingdom are similar: classify us as employees. However, in South Africa, Uber seems to have already weakened its case significantly.

In 2020, during a Competition Commission Inquiry the company acknowledged that, due to factors like income disparity and high rates of unemployment, South African drivers are unlike gig workers in the USA in that they usually have to work full-time and often drive vehicles they don’t own.

By the way, this is also true for drivers in many other countries around the continent.

In the final analysis, driving for ride-hailing companies is often marketed as an opportunity to be self-employed, “be your own boss” and that sort of thing. But while these companies promise autonomy, on the one hand, they use technology to tightly control, monitor and evaluate their drivers on the other.

And that’s the crux of both class-action lawsuits. If ride-hailing companies want to control drivers like employees, drivers are demanding to be compensated like them. Citing the UK case, drivers in Nigeria are filing a lawsuit of their own against Uber and its main competitor, Bolt.

These cases are now trickling in, while frequent strikes and protests provide the backdrop. In SA, the latest protest against ride-hailing companies was held last month. In Nigeria, there were protests last week. While in Kenya, there are fresh protests scheduled for next month.

The ride-hailing industry is still in its infancy, with no big player, not even Uber, currently making a profit. Acceding to driver demands will, therefore, only deepen the losses.

The problem is with the business model: ride-hailing companies are often drawn into price wars where the winner is not them or the drivers, but the customer. As more countries in Africa and across the world assess what happened in the UK, those questions will get more, not less.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Why Andela Expanded Beyond Africa

April 25, 2021

The Africa focused software company that is best known for connecting African developers to global clients has expanded their talent pool beyond the continent to welcome Latin and South American developers. Andela according to company sources took this step to expand its talent pool which it says is open to Africans and non-Africans in those regions. According to Andela’s CEO, Jeremy Johnson, the company “has always been part of our long term roadmap, and we’re excited that the world is ready for it.”

He describes the move as a reflection of the “future of work,” one that is remote and not restricted by geographical boundaries or a need to share physical spaces.

In July 2020, Andela closed its physical offices in Nigeria, Uganda and Rwanda to become a fully remote company. The particular rationale at the time was to increase the number of Africans who could apply to work for the company as software developers.

While the pandemic’s restriction on physical movement influenced that change in policy, there was some logic to it. Andela’s physical offices were sited only in major cities in each country they operated (Lagos, Nairobi, Kampala; their Cairo operation was remote-first from day one). Anyone who wanted to be an Andela developer had to move to these cities.

It is the expectations of the company that by going remote, a qualified developer anywhere in Africa could apply to Andela. At the time, Johnson said it opened Andela up to 500,000 potential engineers from the previous 250,000 available under a physical-office model. However, the remote logic was destined to extend naturally; if going remote opens Andela up to more African developers, it also opens them up to developers everywhere in the world.

In the past six months, Andela says it has witnessed a 750% increase in applications from qualified engineers outside of Africa. More than 30% of inbound applications in March 2021 alone were from outside of Africa; half of that 30% were from Latin America, according to the company. Latin and South American countries are Spanish and Portuguese-speaking countries from Mexico on the southern border of the United States, through Colombia and Brazil to Chile and Argentina.

Andela frames this diverse base as an advantage for their clients. Companies who have people from different geographies on their engineering teams stand to get the benefit of diverse backgrounds, lived experiences and approaches to work that improve the quality of their products.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Lessons From How Ghanaian eHealth Startup, mPharma, Is Conquering Older Incumbents In Africa

April 21, 2021

April 2019. Gregory Johnson, the co-founder of mPharma, a startup that runs inventory management for healthcare practitioners, was at one of the highest peaks of his life. An important deal was about to be sealed in Kenya with Haltons Pharmacy, just six years after he ditched the last lap of a series of employee interviews with the global tech giant, Google.

A major trail blazer, the deal is one of the very rare occasions when a six year-old startup would be swallowing a major pharmacy chain, Kenya’s second largest to be precise.

It didn’t last up to two more years before Rockson returned to Ethiopia, Africa’s second-largest country by population size and a country he had visited four years ago in 2018, again, to seal a follow-up, backed by a humongous $17m in funding raised at the peak of the coronavirus pandemic a year before in 2020.

mPharma lessons Gregory Johnson — *Gregory Johnson is the CEO and co-founder of mPharma*

Ethiopia’s deal was easy but symbolic in many ways. It was easy because the coast had been cleared and insights gleaned from Haltons’ success in Kenya. In fact, Rockson’s mPharma noted that since the acquisition of Haltons, the number of Haltons’ pharmacy outlets in Kenya had increased from 20 to 30, a figure more telling when it is remembered that before mPharma’s acquisition, the Kenyan pharmacy chain had sliced the number from 50 to 20 as a result of poor financial standing.

The symbolism in mPharma’s Ethiopian inroad stems from the fact that in a notoriously closed economy, a smart strategist must find a wide gaping hole in the legal system to wing on. And so, Belayab Pharmaceuticals, a subsidiary of Belayab Group, one of Ethiopia’s biggest and most diversified conglomerates, presented a partnership opportunity for mPharma to hammer a bolder franchising presence in the country.

But perhaps what is even more surprising is that mPharma meanders through Africa acquiring, partnering and launching out new products with relatively meagre funding.

Doctolib in France, comparably, has a war chest of $267m in equity funding. mPharma has less than $50m, to-date. And even more surprising is the fact that with Ethiopia’s latest addition, mPharma is now present in eight African countries, of Zambia, Zimbabwe and Rwanda (via the Kumera pharmacy retail chain), Nigeria (via GoodHealth pharmacy chain) as well as Kenya, Cote d’ivoire, and of course Ghana, its home country.

While the seven year-old company continues its high-growth explosion on the continent, a few insights may be gleaned from its journey so far.

mPharma lessons — *Tracking the major activities of mPharma and the lessons to be learned by startups*

Replicating The Franchise Model In A Sector As Closed And Unpenetrated As Healthcare

Perhaps, mPharma’s most notable signature model is not its vendor-managed inventory of prescription (although it is part of the entire story) but its retail pharmacy operations, most notably done through the QualityRx franchise model.

Launched in November, 2018, QualityRx (which goes by GoodHealth in Nigeria) has single-handedly ensured that the startup has been on a rollercoaster ride of international expansions.

The QualityRx franchise model, which repeats similar features seen with co-operative retailers in the US and Europe, employs common branding, inventory systems and collective purchasing for all pharmacies enlisted in the QualityRx franchise chain.

To tell a better story of how the QualityRx franchise model works: in 1996, Mr. Amankwah founded Fresh Spring Chemists in Tema, Ghana. It used to be Tema’s largest pharmacy, but it went through a difficult time in which it lost business to new pharmacies. Mr. Amankwah was on the brink of shutting his pharmacy when he learned of mPharma’s new QualityRx programme for neighbourhood pharmacies. Fresh Spring was refurbished and restocked at no expense to Mr. Amankwah thanks to QualityRx. As a result, Fresh Spring is now regaining all of its lost clients and supplying them with decent service.

From a more complex and profit-making perspective, mPharma takes over inventory procurement of retail pharmacy and hospital chains within its franchise using its supply-chain software while remotely running pharmacy operations using proprietary technology infrastructure.

The software generates data that is then used to forecast demand. Because it owns a large network of hospitals and pharmacies, the information helps it negotiate lower prices with suppliers (distributors and manufacturers).

Aside from that, mPharma provides medications on consignment to all of its franchised clinics. As a result, income is determined from direct prescription purchases to customers rather than what is sold to hospitals on a regular basis. Because it differs from the traditional “pay-for-supplies” model offered by distributors, this creates a disruptive business model for hospitals and pharmacies.

mPharma makes money by charging a fee on the medications it buys. It also sees an opportunity to benefit from the selling of its data on drug use.

This explains why the startup was on an acquisition expedition in Kenya recently, and why it launched out the Haltons Brand in Ethiopia. Ownership of its own pharmacies will give it a bigger shot at profitability. To show the extent of the profit it could make if it runs its own pharmacy chain, Kenya’s Haltons, for instance, raked in $1.5 million in revenue in 2018, alone.

“We’ve not always been able to control the customer experience and fully address the issue of drug affordability with our pharmacy clients particularly because they manage their profit margins,” says Greg Rockson.

“Through our QualityRx service, we’re starting to invest in improving the customer experience and pricing that patients get from pharmacies. Haltons will serve as a testing ground for us to develop patient-centered services we can provide to our franchise pharmacies. This way we can encourage lower margins and pass the savings on to the customers.”

Raising Enough Funds At The Beginning, Then Raising Only Strategically When There Is Need For It And It Has Become Relatively Easier To Raise

mPharma seems also to be strategic with its funding, only raising on major acquisition, partnership or expansion needs. For instance, the $9.7 million Series B round it raised in January, 2019 from investors such 4DX Ventures, an Accra/San Francisco venture capital firm, and Nairobi-based Novastar Ventures, was used for the acquisition of Kenya’s Haltons later in April that year. And although, Rockson described its $17m fundraising in May, 2020 as “opportunistic”, the startup had already drawn out detailed plans on how to launch operations in Ethiopia, launching there only in March this year, immediately countries began announcing extensive Covid-19 vaccination programmes.

It could be argued that while mPharma spent its earlier fundraising of $6.6 million raised in Nov, 2017 and a seed round of $5 million raised in 2015 on building out and scaling in Ghana, Rwanda, Zambia and Zimbabwe, its subsequent fundraising had been driven by expansion or partnership plans.

Courting In Strategic Investors After Series B Round

Another interesting insight into mPharma’s funding activity is that while its earlier investors had stemmed from the need to just bring in investors, its subsequent fundraising tilted towards strategic investors. For example, although the startup had settled for investors such as 4DX Ventures, Gold Palm Investments, Breyer Capital, Olive Tree Ventures, Social Capital, The Skoll Foundation, etc. for its earlier fundraising, its subsequent fundraising, especially its last funding in May 2020 had seen it bring in key industry leaders such as the CDC Group (the UK’s development finance arm); ex-chief executive of Novartis, Silicon Valley investor Jim Breyer; and Dompe Holdings, the family office of the Italian pharmaceutical giant.

Predictably, the strategic investors may play huge roles towards the startup’s exit.

Filling The Company’s Board With Influence, Experience And Leadership, And Then Using Those To Its Advantage

mPharma has also been strategic about who it brings onto its board. Last year, when it raised its $17m, it announced the appointment to its board of Helena Foulkes, former president of CVS, the largest pharmacy retail chain in the United States. The appointment to the board added to existing board members such as early Facebook investor Jim Breyer.

Disrupting The Supply Chain Is Key In An Industry As Secretive As Healthcare

Perhaps mPharma’s biggest industry is participating in each of the levels of African healthcare supply chain. Even Rockson was quick to admit that his startup would have been long dead if they had not pivoted to different products targeting the entire healthcare industry.

“We processed almost 6000 prescriptions in our database in the past three months,” Rockson said in an interview with Eva Nean of Startupbrics. “But our mission is much more complicated than just giving software. We invest in the hospitals we select. We realized that if we wanted to bring onboard health facilities we had to go beyond just thinking about software; we had to look at the whole ecosystem. So we connect hospitals and pharmacies to our network and we bundle connectivity, device and the application as a service.”

Its sudden orientation towards a more comprehensive coverage of the entire African startup ecosystem led it to launch its famous QualityRx franchise model in 2019. It also launched a pharmacy management software called Bloom (as AWS is to Amazon). The Bloom technology creates an operating system that can enable the startup to transform community pharmacies into primary healthcare providers. It also now allows shop owners to monitor daily revenues and keep track of inventory.

*The Bloom allows you, for instance, to monitor the popularity of goods through different facilities over time. Source: mPharma*

“We want QualityRx to represent the best pharmacy in the neighbourhood. To do this, we are challenging what it means to be a pharmacy by enabling QualityRx members to proactively provide basic healthcare services in their neighbourhoods,” Rockson noted in a Medium article he wrote at the launch of QualityRx.

The QualityRx model also goes by the name GoodHealth Shops in Nigeria where it is funded by the Bill and Melinda Gates Foundation. The GoodHealth Shops pilot scheme, launched in 2019, hoped to expand mPharma’s QualityRx model to 20 Patent and Proprietary Medicine Vendors (PPMVs) in Lagos, Nigeria. The model had been largely successful as indicated, partly in the diagram below.

*The GoodHealth Shops, a type of the QualityRx model, helped fastrack major improvements in foot traffic and revenues for participants. Source: mPharma*

“I have opened my shop for over 30 years, but only a few people in my area patronize me. My business wasn’t growing and there were days when I didn’t make any sales at all. Partnering with mPharma changed everything for me. I became more popular, and a lot of people now patronize me’’ —said Bolanle, a Patent and Proprietary Medicine Vendor (PPMV) based in Lagos, Nigeria.

Apart from enlisting retail pharmacies, mPharma sought a way to significantly alter the customer experience previously available in the healthcare industry.

To that effect, it launched Mutti, a health membership programme. Mutti members receive discounts on their medications as well as funding options to assist with healthcare expenses. Mutti is particularly beneficial to uninsured patients who pay for their medications out of pocket and therefore bear the brunt of high drug prices. For every pharmacy chain mPharma maintains, it attaches the Mutti brand to it.

“The significant revenue growth at the GoodHealth Shops have been driven by Mutti members who account for 65% of total sales,” noted Weiwei Bi — Country Lead, QualityRx Retail (Franchising) at mPharma.

*Mutti membership is positively associated with basket value and purchase frequency, according to mPharma’s data, and has risen over time. Source: mPharma.*

The success of the QualityRx franchise model has been phenomenal for mPharma, and with the launch of its own retail pharmacy chains — either by acquisitions (Kenya’s Haltons) or otherwise (Zambia and Rwanda’s Kumera and Ethiopia’s Haltons) — the startup now looks fully set to conquer its last territories in the African healthcare industry.

Finally, mPharma’s entire coverage of the healthcare industry may not be complete if it does not include hospitals in its chain of focus. Through its mClinic, doctors prescribe medication and send a prescription code to a pharmacy and the patient’s mobile phone. Once a patient is registered in the system, their doctor can easily access their information and prescription history. Doctors may also view stock details for all of the partner pharmacies, allowing them to avoid sending patients to pharmacies where medications are not accessible. Lastly, mPharma’s messaging system allows doctors and pharmacists to communicate directly.

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How The Coronavirus Has Revealed The Need For More Venture Capital Funding For African Healthcare Startups

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

Morocco, Senegal to Increase Cooperation in Business, Research

February 11, 2021

Morocco’s Head of Government, Saad Eddine El Othmani

Morocco and Senegal have pledged to work on increasing bilateral cooperation in the fields of business and scientific research. Morocco’s Head of Government, Saad Eddine El Othmani, met with the President of the Senegalese Economic, Social, and Environmental Council, Idrissa Seck, on Wednesday, February 10, in Rabat. The two officials discussed strengthening bilateral ties between the two countries and agreed that the fields of business and scientific research should be prioritized.

During the meeting, Seck advocated for the development of a regular dialogue between Moroccan and Senegalese businesses to explore partnership opportunities and launch joint ventures.The Senegalese official also called for deepening joint action between universities from the two countries in order to increase research on issues of common interest.

Agreeing with Seck, El Othmani emphasized the importance of building on the quality of Moroccan-Senegalese relations, which are “rooted in history,” to expand the fields of bilateral cooperation and touching on “human, cultural, and civilizational dimensions.”

The head of government also expressed Morocco’s “pride in the brotherly ties” it maintains with Senegal. He recalled that King Mohammed VI has visited the West African country on several occasions, most notably in November 2016 when he delivered a royal speech commemorating the 41st anniversary of the Green March from Dakar. “The official visits of the Sovereign to Senegal are proof of the depth of relations between the two countries,” El Othmani said.

Seck reciprocated El Othmani’s words, saying Senegal is “proud of its friendship” with Morocco and King Mohammed VI. Other topics of discussion between the two officials included the COVID-19 pandemic and the means to overcome its socio-economic impacts.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

The role of technology in unlocking trade value in East Africa

January 29, 2021

By Pedro Guerreiro

Is it too soon to be optimistic about an economic revival in East Africa following the devastating impact of COVID-19 on the global economy?

The latest data – and the region’s continued focus on transforming its key industries, sectors and infrastructure through technology – is giving me hope that the economic outlook is brightening.

Trade in East Africa has already picked up: according to the Brookings Institute, after an initial drop in trade in Kenya during the early months of the pandemic, by July domestic exports were already 12.7% higher compared to the year before.

Impact on trade felt during early days of pandemic

That is not to say the pandemic did not have a significant impact on regional trade. For example, Kenya’s highly lucrative cut flower industry was brought to its knees earlier this year. When Europe locked down, it forced the closure of hotels and severely restricted public gatherings including weddings and funerals.

Demand for Kenya’s cut flower exports plummeted from a high of 17,600 tons in February 2020 to a low of 8,000 tons in April. Kenya is the world’s third-largest exporter of cut flowers. The industry employs 150 000 people and contributes 1% of the country’s GDP.

Flower-only export farms changed their business models by switching to growing vegetables – another of the country’s major horticultural exports – and could generate some revenue by exporting to the country’s European trade partners. Local food security was also improved, as produce could be used to feed vulnerable communities struggling with the impact of the pandemic.

Tea exports, Kenya’s second-largest earner of foreign exchange after horticulture, also declined due to the pandemic. Recent data suggests a drop in tea exports from Kenya in the period January to June 2020 compared to the same period in 2019.

However, that sector is arguably better equipped to adapt to the immediate challenges. The Kenya Tea Development Agency, an industry body that supports more than 600 000 smallholder tea farmers, has been on a sustained digital transformation journey to achieve greater automation in its factories.

The cost-savings and improved revenue resulting from greater efficiencies in the KTDA’s operations is helping it secure local jobs and support the local economy despite the impact of the pandemic. This type of technology-enabled resilience is more important now than ever, when an uncertain global outlook means organisations need the agility to adapt to changes in their operating environment.

New agreements, investments unlock trade value

Broader initiatives are likely to further support growth in trade in the region. The African Continental Free Trade Area, the world’s largest free trade area by number of countries involved, will eventually connect 1.3 billion people commanding $3.4-trillion in GDP.

The World Bank estimates that trade measures that cut red tape, simplify customs procedures and make it easier for local businesses to integrate into global supply chains could drive $292-billion of the expected $450-billion in income gains from the agreement.

For countries and ports of trade that have updated their infrastructure through investments into new technology, these income gains will be easier to realise.

The Mombasa Port, East Africa’s largest and oldest sea port, is still the main conduit for global sea trade in the region, but a new port in Lamu will further expand the region’s trade capability. The new port will form part of a transport corridor that will connect Kenya to South Sudan and Ethiopia and greatly assist with boosting regional trade.

Ambitious investments into new rail infrastructure also hold immense promise. The East African Railway Master Plan aims to rejuvenate the railways serving Kenya, Tanzania and Uganda, and will add railways serving the rapidly-developing economies in Rwanda and Burundi. The application of technology in each of these major infrastructure projects will be crucial to their success in the decades ahead.

Key technology priorities for regional trade

What should regional trade authorities and organisations prioritise in terms of technology investments to ensure positive growth in trade in East Africa? Efficiency should be a top priority. Increasing the volume of containers passing through regional ports could hold huge financial benefits. PwC estimates that sub-Saharan Africa could save $2.2-billion in costs per year if container throughput is doubled at major ports. In addition, improving port performance by 25% can reduce the price of imported goods in the region by $3.2-billion per year while adding $2.6-billion to the value of exports.

Automation is also key. Africa’s long-term reliance on slow, manual processes has stunted the growth of trade at its ports. The turnaround time for vessels at African ports – the time it takes to port, offload cargo, reload and depart – averages five days. In Asia, where port infrastructure is more modern and automated, that time drops to as little as seven hours. The productivity gains from the use of automation means Asian ports are able to process more goods quicker, with direct revenue increases as a result.

In addition, deploying new technologies could help solve efficiency and productivity issues at key ports of trade. After investing in an Internet of Things platform that connected its entire fleet to a central system, the Port of Hamburg in Germany now has full, real-time visibility over truck positions, congestion at cargo terminals, raised bridges and accidents. This enables port authorities to make accurate decisions to ensure a smooth flow of goods at all times, boosting the efficiency and productivity of the port.

Africa’s lack of legacy infrastructure could be an advantage as it builds out its ports of trade. With less historic technology to adapt or work around than the more developed regions, African ports have a blank slate to implement the latest technology and realise the immense gains promised by the likes of IoT, AI and machine learning.

Pedro Guerreiro, Managing Director for Central Africa at SAP

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

How Kobo 360 Launched its Temperature-Controlled Logistics Programme

January 4, 2021

Kobo360’s Founding Partner and Head of KoboCare, Ike Abiakam

Nigerian based startup Kobo 360 has launched a Temperature-Controlled Logistics, TCL, solutions programme to assist businesses in the country to overcome challenges in the food and health sector. This project attracted the attention of the World Bank who is partnering with Kobo 360 through its private sector arm, the International Finance Corporation (IFC). As part of the partnership, the IFC announced an open call to innovators from around the world to come forward with climate-smart and TCL cooling solutions that will see to Nigeria’s food waste challenges, support its health sector, and reduce energy consumption level.

The techEmerge TCL Nigeria programme aims to offer market access and a pool of up to $1 million in funding to top innovators. The innovators will be matched with leading Nigerian companies, to jointly pilot sustainable solutions that reduce losses in cold chains, strengthen access to TCL-dependent products and markets, and build commercial partnerships.

The programme is being implemented by IFC in partnership with the UK Department for Business, Energy & Industrial Strategy (BEIS) and Kobo360, an African e-logistics platform and IFC client. TCL is essential for economic development, human health, and food security. It delivers perishable goods to shops and shipping ports and keeps medicines and vaccines from spoiling as they are transported to clinics, pharmacies, and hospitals.

Speaking on the programme, the IFC’s Senior Director of Disruptive Technologies and Funds, William Sonneborn said that “sustainable cooling technologies represent a fast-growing business opportunity with particular importance to emerging markets. We are excited to support cutting-edge entrepreneurs to pilot and scale their TCL solutions in Nigeria, and Africa more broadly.”

He added that applications for the programme are open till January 31, 2021. Kobo360’s Founding Partner and Head of KoboCare, Ike Abiakam, said, “Africa’s cold chain capacity faces a lack of investment in equipment for maintaining a specific temperature range throughout the supply chain. We’ve seen a gap in the market for shipping solutions, specifically concerning moving deep-frozen, cold and ambient goods in a safe and temperature-controlled environment.

“Temperature-controlled shipping is constantly evolving and our partnership with the IFC is a key step towards discovering the best innovations that will enable the efficient transport of chilled goods.”

The programme will also bring together tech companies and innovators selected through a competitive process for matchmaking with leading Nigerian companies. The selection will lead to discussions of piloting and commercial deployment of their innovations. The World Bank through the IFC and a panel of industry experts will provide support during market entry and tech transfer, helping tech companies and start-ups mitigate financial and operational risks.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry