LawBasket is, well, bringing law to the basket of what can be purchased online in Zimbabwe and across Africa. The startup was just founded in December of 2018 by a team of entrepreneurs that includes two lawyers. In what was supposed to be a huge thrill for the startup, it secured signups from legal professionals from more than 25 African countries on this launch.
The Law Startup Business Model Is Simple
The startup believes you can shop all legal services online the way you shop for clothing and other wares. The startup calls itself an online legal services marketplace for small businesses and startups, which bring together hundreds of lawyers in over 200 practice areas to deliver quality and affordable legal services online. The startup also offers client relationship management technology and payment processing services for lawyers.
The startup exists for both lawyers and clients.
The client can get to hire lawyers for their job from a wide range of lawyers on the platform, with expertise in various areas. They can either post a job and let lawyers bid based on expertise and client’s budget, or they can simply search for services, find lawyers and invite them to do their cases.
The startup is also giving legal clients the power to manage jobs from anywhere in the world, using their dashboard. With an integrated mailbox on the dashboard, the client can send emails to their lawyers quickly and follow up on their cases. They can also monitor proposal for posted jobs or manage their payments to lawyers for work done. Lawyers are only paid when the job is done. Through LawBasket Payments, the startup also simplifies the process of creating and managing bills for lawyers and provides a simple portal to process multi-jurisdictional payments for legal services.
For lawyers, they can search for cases that tickle their fancy, and send proposals to clients based on their expertise that suits the case, and at the same time search jobs at any time.
The startup is also giving lawyers a dashboard and a mailbox to manage their work from anywhere in the world.
According to the startup’s co-founder and head of marketing Nyasha Makamba in a recent interview, the platform presented a credible alternative to traditional law firms, providing a cost-certain solution to getting legal help for small businesses across Africa.
“In terms of the competition, and although the company is not a law firm, the firm broadly competes with traditional law firms, as well as other consultancy companies that provide technology-driven legal solutions. LawBasket is different from traditional law firms both in size and reach, as well as its approach to pricing legal services,” said Makamba.
How Law Basket Expects To Make Its Profit
Although LawBasket has been funded by its founders, Makamba said it had a “clear path to revenue generation and profitability in 12 months”, with revenue expected from commissions on LawBasket jobs, premium membership, and payment processing fees through LawBasket Payments.
Already, the startup has gained traction with over 153 lawyers from more than 25 African countries registering on its platform.
“It is almost 10 times bigger than the largest law firm in Zimbabwe, and is less than 40 lawyers away from surpassing the largest law firm by lawyer number in South Africa and Nigeria,” Makamba said.
Law Basket is also getting a hit from potential clients from more than 15 countries. Its client base is already over 106, ranging from small businesses and startups.
“With these demographics, this means that the legal services payment processing aspect of the business is operative in 25 countries in Africa, including South Africa, Nigeria, Zimbabwe, Kenya, Zambia, Botswana, Senegal amongst other countries,” Makamba said.
“We plan to increase user numbers both on the client side and the lawyer side in the current markets, with plans to introduce more lawyers from the Francophone and Lusophone markets within 12 months.”
Globally, the legal technology industry is still growing, but the industry has quietly built up a number of emerging categories over the last few years. As of 2017, legal tech companies raised just $739M in aggregate funding since 2011. However, there is still a lot of opportunities to improve processes within the legal industry still attached to manual and paper-based processes.
The least popular areas in legal tech in 2018 are e-Billing and intellectual property, where machine learning is widely used. These areas are represented by three companies on each side. In 2018, only one of them has raised investments, a company which is developing an IP-solution.
On the other hand, e-Discovery is one of the most popular destinations in the whole legal tech industry. e-Discovery, mostly used in common law countries is an electronic service for finding relevant information about lawsuits and investigations. In common law countries, e-Discovery does provide great help to lawyers, saving them time and improving the accuracy of finding suitable court cases.
In 2016, $224 million was invested in the industry; in 2017, $233 million was invested. Investors were eyeing a fairly young business area and refrained from large transactions.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Tech startups in Africa are having a field day. In fact, the amount raised through funding, by tech startups in Africa is two and a half times larger than the GDP of Sao Tome and Principe, an island nation off the coast of Central Africa.
The Afrobytes and Viva Tech conferences in Paris this week are providing an opportunity to analyse the growth of tech startups in Africa. Fund-raising is one of the key growth areas. Partech Africa, a venture capital firm, hinted that 146 startups in 19 African countries raised $1.16 billion for African digital entrepreneurs in 2018.
Key Analysis
Kenya, Nigeria and South Africa in all saw a 78% of the total funding, with Egypt close behind.
French speaking countries are not way behind:Senegal is the leading tech ecosystem among them with a total of $22 million raised in four deals so far.
Forty Senegalese startups last November secured a total of $2 million in government funding alone.
Side by side with their Anglophone peers, African Francophone countries, Partech noted, operate in smaller markets, and lack capital and mentors.
With African population expected to reach 1.4 billion by 2021, and with over 1 billion smartphones on the continent, Africa looks like the a promising center for the world’s leading high-tech and telecom companies.
What Speakers At Both Conferences Said
Marieme Diop, a venture capital investor at Orange Digital Ventures, said that‘unfortunately in Francophone Africa, it is not in our DNA. People who succeed in business or in electing positions do not necessarily reach back to help their peers to show them how to be successful. In the Anglophone world, it is a must for anyone who wants to start something: seeking advice. So the gap is not only financial’ between the regions. Africa is seen by many as the next frontier for venture capital, with its booming population and mobile-first economy. That’s why Google, Facebook and PayPal participated in Paris in Afrobytes 2019.’
We do not want people globally to see African high-tech as an exotic stuff,’ said Afrobytes CEO Ammin Youssouf. ‘We want to be heard and talk about AI, blockchain, what is happening in Silicon Valley, because it has an impact on us. We already have brilliant minds in Africa, especially in tech, to have those conversations.’Unlike the global trend, where men dominate the high-tech industry, women are leading the movement in Africa.’
Women Are Becoming A Large Part of the Tech Revolution
Ben White, chief executive officer of venture capital platform VC4Africa, who has been supporting startups on the continent for more than 10 years analysed this situation:
‘‘Actually, what we see in the statistics is that women’s involvement and participation on in the African continent is much higher than what you would find in New York, for example, or San Francisco. I think it is an advantage. It also means having women investors who are very sensitive to gender-related questions and can also ensure that the system we are building is inclusive.’’
Can Government Help Tech Startups By Way Of Funding?
Government in startups? That is a two-way risk:
Kenza Lahlou, co-founder and managing partner at Outlierz Ventures, said the public sector ‘should not invest [in startups].To him, governments simply don’t have the skills needed to pick good investments. However, government can bring support by way of legislation, and policy support.
Morocco, for instance, already has InnovInvest, which it is doing in partnership with the World Bank to invest in local venture capitalist funds, to lower the risk for local funds.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
In his usual collected demeanour, Mr Gene Maxon Adigu, a top leader in the Network Marketing Professionals of Nigeria, does not see himself giving up soon on network marketing.
He is the business and the business is his friend. Out of school since 2010, Mr. Adigu now boasts of an annual base income in millions, as well as other fleet of investment and acquisitions. All from network marketing since the last eight years. For a man who read from Robert Kiyosaki to John C. Maxwell to other bestselling business and crazy books while in school, it appears the journey is still far from over.
‘‘ Entrepreneurship is not for babies,’’ Mr. Adigu told AfrikanHeroes . ‘‘I didn’t just focus on reading only the academic books while in school. And that helped me so much psychologically and mentally. It prepared me well for the world out there, after school. So when I graduated with no job in sight, I resorted to a network marketing business because it was the only business I could start then with small capital. Network marketing is a business that has helped me, and today I am living the life of my dream. ’’
‘‘Network Marketers Are Also Entrepreneurs’’
For a business model that was once valued at US167 billion (2012) globally, engaging at least 89 million network marketers with the Asia-Pacific region of the world forming the largest market with a share of 44 per cent followed by North America, Central and South America (20 per cent share, each) and Europe (15 per cent), Mr. Adigu said network marketing is your regular business with all the structures and the organisation and the workforce and the strategies of established businesses, and not a Chit Fund or some Ponzi Schemes.
‘‘Network marketers are also entrepreneurs, Mr. Adigu said‘‘Network marketing is not a different business model. In every business in this world, there is network marketing. Network marketing is a profession. Network marketing is a normal business, like every other business on Earth.’’
The World Federation of Direct Selling Associations (‘WFDSA’), which is the global body concerned with the business, and which has the membership of 60 national associations and one regional federation, defines network marketing as “the marketing of products and services directly to consumers in a person-to-person manner, away from permanent retail locations”. An important objective in a Network Marketing model is to generate sales by constant interaction with customers along with engagement of new distributors down the line.
‘‘Network Marketing Business Is A Sustainable Business Model’’
Mr. Adigu does not see the network marketing business model ending soon.
‘‘ Network marketing is a system through which you market your business. It is not the type where you, for instance, pay CNN to run adverts for you. Network marketing is word-of-mouth marketing, which makes it a unique system and can never be outdated. Network marketing will always be a reliable business; in fact, for the next 100 thousandth year. It is a system of referring some other persons’ products and services to your friends and families and you get paid for doing so.’’
Mr Adigu may not be so far from the truth. Vorwerk & Co. KG, a German network marketing company was founded in 1883, and is still in existence 136 years after. The company has presence in over 76 international markets across the world and reported revenue of $3.7 billion in 2013 alone. United States’ Alticor (Amway) founded in 1959 is the world’s leading network marketing company, posting a revenue of $11.8 billion in 2013, and has presence in over 100 countries.
‘‘Network marketing business lasts,’’ he said. ‘‘ The question is the company you are partnering with: are you going to last with that company? You are not supposed to ask whether network marketing business would last. The question should be: would the company you are partnering with last? Are you going to last with that company till you succeed? This question is very important.’’
‘‘The Greatest Challenge of Most Network Marketers Is That They Take Things Personal.’’
For a business that involves selling a consumer product or service from one person to another, in an environment that is not a permanent retail location, Mr. Adigu expects that this would not come without a fight.
Hence, when the mind-spinning, rapid and unexpected rebuff comes, he also does not expect network marketers to swallow it hard. But they have to do so, anyway, if they would want to get ahead. And because most network marketers don’t usually do so, he sees it as a major challenge.
‘‘When you start a network marketing business, learn how to recruit the right network marketers. You need to keep teaching them how to market their products effectively,’ he said. ‘Also, learn how not to take things personal. If somebody tells you that he is not interested in your deal, learn how to swallow it calmly. Don’t take things personal.’’
Mr Adigu also pitched some advice for marketing products. Marketing products is fun, he said, as long as you believe in them and make some research about them. You have to also study why the products are necessary before passing them over to your network.
‘‘ I was promoting a business back then, about some coffee products. Nigerians don’t normally take coffee, but my team researched about these products and we started building the business. It was surprising to suddenly see Nigerians using the products, making coffee from them. In fact, the business was so successful that I averaged over a million naira a month from it. This happened because we were interested in the coffee products; did some research on them and tabled the products’ exceptional health benefits to our target customers,’’ Mr. Adigu said.
Breaking The Ice and Making Profit From Network Marketing
Earning from the Multi-Level Marketing or Network Marketing usually follows an arch: each direct seller recruited can potentially recruit new distributors and create a down line of direct and indirect distributors or sellers. Distributors purchase products to sell to the consumers. They receive commissions and bonuses on the sales made by them and the sales made by their down-line sellers and retail markups.
Mr. Adigu said network marketing business is so profitable that he once averaged over ₦200 million ($556,000) from the business in a year.
‘‘In a year, for starters, depending on the work you put in, you can earn two to three million naira ($6000), with additional earnings depending on how hard you work,’’ he said.
Global direct selling was a USD 167 billion market in 2013 and employs around 90 million people worldwide. While the industry grew at a low rate of 5.4 per cent in 2012, over 2011 (growth rate of 19.7 per cent), due to global economic slowdown, the long term growth prospects of the industry remain robust. Cosmetics and personal care is the biggest category capturing more than 35 per cent share globally in the network market, followed by wellness products and household goods.
‘‘If You Don’t Have The Stamina To Grow A Business, Just Go and Get A Job’’
Mr. Adigu does not see himself giving up any time soon. He has other plans, though; to work harder and live the best of his life.
‘‘Being an entrepreneur is not for people who easily give up,’’ he said. ‘‘ When you start a business, be prepared that you would give it all your best. Sometimes, giving all your best doesn’t even work. The only thing that usually works in the end is consistency. Consistency is the ice breaker.’’
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
The Genome Group has just released its 2019 edition of the global startup ecosystem performance. The fastest growing startup sectors were listed as:
Advanced Manufacturing & Robotics, which grew to a five year high of 107.9% and accounts for about 1.8% of the share of global startups.
Blockchain, which grew to a five year high of 101.5% and accounts for about 2.7% of the share of global startups.
Agtech & New Food which also saw a five year growth rate of 88.8% and also accounts for 0.8% of the share of global startups
AI, Big Data, & Analytics, which saw a five year growth of 64.5% and has a highest growing share of global startups of 7.1%.
Below Are Key Insights From The Report
The Fastest Growing Startup Areas
The average growth of Advanced Manufacturing and Robotics,Blockchain, Agtech & New Food, and AI, Big Data & Analytics over the last five years is 90.7% while their average exit success over the same period is 110.5%.
Among Growth-Phase sub-sectors AI, Big Data, & Analytics is the largest one, comprising 7.1% of all global startups. It is also the sub-sector that is growing the slowest among its Growth-Phase peers.
Nonetheless, if we separate AI by itself, excluding Big Data & Analytics startups from the cohort, we see that a standalone AI-sub-sector is growing about twice as fast as the AI, Big Data, & Analytics sub-sector as a whole.
*Genome Startup Ecosystem Report
Startup Areas That Are Fully Mature, Although Their Growth Is Slow
The four startup sub-sectors in the Mature Phase are :
Cybersecurity — with an 87.3% growth rate over the last five years and 0.9% share of global startups;
Cleantech — with a 26.2% growth rate over the last five years and 2.9% share of global startups;
Life Sciences — with a 15.0% growth rate over the last five years and 2.6% share of global startups;
Fintech — with an 105.8% growth rate over the last five years and 8.7% share of global startups;
Reasons:
These mature startup areas collectively still grew a respectable 15.9% in early-stage funding and 58.6% in exits during the past five years.
While this level of growth is sufficient to make them mature in terms of startup sub-sectors, these are figures most traditional industries would be envious of.
Fintech, an important startup sub-sector, shows two major signs of approaching a successful late Maturity: first, it has grown massively, and now nearly one of every 10 global startups is working in this sub-sector.
Second, it still shows very strong performance and growth in terms of exits. This shows that while not as much money is coming for early-stage startups (later stage and mega rounds are another story), founders and investors are able to still exit in impressive numbers.
Interestingly, Life Sciences and Cybersecurity are the only two startup sub-sectors in the Mature Phase that have grown in the latest period. This could be a sign of renewed vigor for startups in these spaces.
*Genome Startup Ecosystem Report
Four Startup Areas Are Fast Declining
They are:
Edtech (educational technology)— with an early stage deal concluded by the startup sector declining by 15.8%, the sector still maintains a share of global startups of 3.1%;
Digital Media —with an early stage deal concluded by the startup sector declining by 38.9%, the sector still maintains a share of global startups of 20.7% ;
Gaming — with an early stage deal concluded by the startup sector declining by 40.4%, the sector still maintains a share of global startups of 4.5%;
Adtech ( advertising technology) — with an early stage deal concluded by the startup sector declining by 47.9%, the sector still maintains a share of global startups of 4.2% ;
Reasons:
Sub-sectors in the Decline Phase are shrinking in terms of early-stage funding deals, although mega rounds and later funding rounds might still be happening. In addition, each one of them is still experiencing growth in exits, although they are under-performing the typical startup sub-sector.
The main change to this group since last year when we published the Global Startup Ecosystem Report in 2018 is in Edtech — a sub-sector that was in Mature Phase that now has edged towards Decline Phase.
While exits Global Startup Ecosystem Report 2019 are still growing, early-stage funding deals — a key indicator of future potential from both founders and investors — are declining. While these sub-sectors are declining overall, they still have meaningful presence and size, and can be renewed by new technologies — for example with the potential for Virtual Reality and Augmented Reality to rejuvenate Gaming.
Why You Should Care About These Startup Areas and Their Performance
According to Startup Genome, these startup areas are the major part of their report for two main reasons:
1. It Will Enable Ecosystems Around The World To Focus on the Most Viable Startup Areas.
Identifying and building on local strengths is one of the main levers that policymakers and ecosystem builders can use to boost ecosystem performance. No small ecosystem can perform well and compete with places like Silicon Valley, London, Beijing, or New York across the board. But what they can do is be a hub of excellence in specific startup sub-sectors and use that advantage to build spillover effects that improve the ecosystem and the economy as a whole.
Take San Diego, the #3 ecosystem in the world for Life Sciences even though it is relatively small with only 1,000 to 1,400 tech startups — less than 10% the size of Silicon Valley and only 14% of the size of New York. That strength spilled over and helped San Diego become a top 30 global startup ecosystem despite its small size.
Frankfurt is a similar case. Although it is small, with only 300 to 500 startups, it is incredibly focused on Fintech. It has many Fintech accelerators and corporate startup innovation initiatives, about half of the VC funding in the ecosystem goes to the sub-sector, and the city is home to a very strong traditional financial industry with five Forbes 2000 companies in finance and the presence of the European Central Bank headquarters. That focus led to the largest German Fintech exit of all time taking place in the city (360T, for nearly $800 million) and high ecosystem performance across many Success Factors.
2.The Findings On These Startup Areas Would Provide Insights for Startup Founders
As a founder, knowing how your startup sub-sector of interest is growing — and which ecosystems have the biggest competitive advantage in them — can help you make better decisions. It tells you the places you should be considering networking or opening operations at (e.g., if you are Life Sciences founder in Europe, you would do well to make connections in London and Lausanne-Bern-Geneva) and it tells you about the funding and exit environment (e.g., if you need capital for a Gaming startup not overlapping with growth startup sub-sectors, be prepared for a tough funding environment and consider more bootstrapping).
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Startup Genome has launched its latest report on the global startup ecosystem. The group says the report is a result of an independent research with data on over a million companies across 150 cities. It also said working side-by-side with more than 300 partner organizations, frameworks and methodologies.
Key Highlights Of The Report
The top five startup ecosystems overall in 2019 are Silicon Valley, New York City, London, Beijing, and Boston.
Based on Success Factors such as Funding and Knowledge, the top five ecosystems for Life Sciences are Silicon Valley, Boston, San Diego, New York City, and London. This is the very first global ranking of Life Sciences ecosystems.
Deep Tech startups — those relying heavily on intellectual property — are the fastest-growing group globally.
The four fastest-growing Startup Sub-Sectors are Advanced Manufacturing & Robotics, Blockchain, Agtech & New Food, and Artificial Intelligence.
Startup Sub-Sectors showing decline are Edtech, Digital Media, Gaming, and Adtech.
There is no “next” Silicon Valley — instead, there are 30 startup ecosystems around the world that will soon lay claim to a parallel vibrancy and economic productivity.
Movement within top 30 ranking: Paris cracked the top 10, moving up two spots to #9 overall; Amsterdam-StartupDelta moved up four spots to #15 overall; San Diego and Washington, D.C. cracked the top 20 for the first time.
So Who Are The Next 30?
The report that some ecosystems show the potential to make the top 30 within five years. The ecosystems are referred to as the Challenger.
The Challengers ecosystems are currently outside the top 30 ranking but growing rapidly.
This is a diverse group, with Lagos and Jakarta alongside Moscow and Melbourne.
Each Challenger ecosystem has at least one company in the billion-dollar club (unicorns and exits).
They also share key characteristics: – Regional leadership: some are major focus points in their areas of the world, as São Paulo is in South America, Lagos is in Africa, and Jakarta — the 4th most populous metropolitan area in the world and home to four unicorns — is in Southeast Asia.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Leaving the security of a daily job for something as uncertain as running your own startup could be one of the hardest experience you could ever have in life. Behind the hard calculations and planning and stiffness, we found some random thoughts from top startup owners, some of whom even started out as losers.
Jason Njoku, Founder of iROKOtv
In 2010, the Nigerian Jason Njoku and the German Bastian Gotter launched irokotv, a web platform that provides paid-for Nigerian films on-demand, which is usually dubbed ‘the Netflix of Africa’ and which is believed to be one of Africa’s first mainstream online movie streaming websites. With its headquaters in Lagos, Nigeria and offices in London and New York. iROKOtv brand was so valuable that Jason said in less than a year old at the time, investors paid $80,000 for 10% of the iROKOtv but sold to other existing investors, for $2.4 million. In some of his posts, he made the following points about starting out.
‘I remember when I started iroko. Everyone thought I was an idiot. That’s fine, it wasn’t a bad conclusion. I was x10 failure in startup hits. When we started making investments in Nigeria back in 2012, that seemed stupid. We were way too early. Pretty stupid. I agree. Consumer internet in Nigeria is so early; it’s pretty scary today. Breaking rocks and bleeding stones for every Naira of revenue is the least fun thing to do… I don’t believe in game changing strategic moves. I don’t believe that there is one decision you make which fundamentally certifies your success. I believe in iteration, in inch by inch tactical hits and misses……I believe in a thousand small decisions.’’
On why IROKO has remained profitable, Jason wrote thatIROKO has diversified the business where no one unit represents more than 35% of revenue.’’
Alemu owns SoleRebels, an Ethiopian company that makes made-to-order sustainable footwear handcrafted in Addis Ababa by Ethiopian artisans. The company has a distribution network in over thirty countries worldwide; selling to market kings such as Whole Foods, Urban Outfitters and Amazon.
‘‘ Stop looking at consumers and start looking at them as what they are: people! Being a successful entrepreneur is not simply hard work. It is about having good fortune and also a great team beside you! These multiple factors have allowed me to take SoleRebels to the next level.’’
Mostafa Kandil, CEO SWVL, Egypt
Mostafa Kandil, Mahmoud Nouh and Ahmed Sabbah were all below 30 years of age when they founded SWVL, a premium mass transit system in Egypt’s capital city, Cairo. The goal was to make it easier for Egypt’s residents to book bus rides at fixed rate on existing routes. Users schedule trips, pay online or in cash and are given virtual boarding passes. Even with fierce competition from the likes of Buseet and Uber vying into premium public transport service, SWVL’s application has been downloaded for well over 360,000 times on Google play store and Apple iStore. The platform completes 100,000 rides monthly. It was the first company to introduce the service in Egypt in 2017 before Careem and Uber joined the sector late last year. SWVL has expanded to Kenya.
In a recent interview with Start Scene, he shared some of his experience:
“I had graduated in Petroleum engineering, but as I started working I hated it; I felt it was too stiff for me,…I was also part of something called the Growth Team, which directly reports to the CEO [Mudassir Sheikha]. I remember it was my first week and he came to me and said: “when I quit McKinsey [& Company], I knew I could come back. The same goes for you; if you leave Careem now to start something and fail, you can always come back.” That was on my first week. I kept meeting him every day, and something we used to check at the Growth Group was the average trip fare, which in Egypt was about 3–4 dollars. I knew that was a lot for an average Egyptian; so in February I decided I would leave to create something new.
…..Around the world, public transportation is a loss-making machine. If you can take this load off the government and privatise it in a way that is super cheap and create job opportunities, you are revitalising a sector. We now have a huge fleet; we have 40 routes and 300 buses on the road, but we don’t own any assets, so it’s super scalable”
“You need to have the right people around you — you can’t do everything yourself. A lot of entrepreneurs think they need to be good at every aspect of the business but this is not the case.”
Shola Akinlade, Founder Paystack
Paystack is a Lagos-based, e-payment solution founded by Shola Akinlade and Ezra Olubi. The company reported in 2017, barely two years after its founding, that its user base grew from 1,400 merchants to close with over 7,700 live merchants, accepting payments with Paystack. It also reported that in 2017, the startup reached 1 billion Naira ($3 million) in monthly transaction value, closing 2017 with NGN 2.7 billion Naira ($7.5 million) in monthly transaction value. In an interview with Forbes Magazine, Shola Akinlade, noted that:
‘‘ We started Paystack because we knew online payments in Africa were essentially broken and someone definitely had to do the hard work of fixing it… The challenge was to solve the issue of online payments in Africa, somehow connecting the super-fragmented aspects of the sector. What we did was develop multi-channel payment options for merchants across the country, enabling them to accept payments from around the world, via credit card, debit card, and direct bank transfer on web and mobile. It’s taken two years of non-stop hard work to grow it from idea stage, to the product we have today.’’
On what made them grow so fast, Akinlade said:
‘‘ When we tell people that they can start receiving payments within 30 minutes from sign-up, I think many are, initially, a little cynical. So many merchants in Nigeria have faced so many challenges with receiving payments over the years, I think perhaps they thought it sounded a little too good to be true. But they had faith, they tried us out, our product worked for them. Our customers have been our evangelists, and that has really helped us grow quickly.’’
Andrew Watkins-Ball -Founder JUMO
JUMO was founded in 2014 by the South African-born CEO, Andrew Watkins-Ball. JUMO started as a mobile financial services startup company in Ghana, providing payroll loans to government and corporate workers and consumer loans to informal and market traders. Through September 2016, it had delivered more than 10 million loans to customers in 6 countries including Tanzania, Kenya, Zambia, Rwanda and Uganda. The platform leverages an uncommon digital credit model that does not require customers to have prior financial account ownership or a credit history.
‘‘ Building something to solve a big problem is hard… Products that are designed from positive and authentic emotions will be loved by customers…. Your customer must love your product or you don’t get the adoption you need to build a big business against sustainable demand. They must feel that you care and they must feel that the product comes from an authentic objective. A great example is Wikipedia. You can feel the social objective of the product.’’
Anne Wawira Njiru, Founder Food4Education, Kenya
Wawira Njiru founded in 2012 Food4Education, the social enterprise startup which provides 2000 meals per day across 4 schools around Ruiru, a small town in the Central Part of Kenya. The startup is aimed at improving children’s health, school performance as well as increasing their chances of getting into good high schools in a merit-based high school entrance system.The startup secured US$ 300,000 funding from Draper Richards Kaplan Foundation to expand their reach over the next 3 years, in 2015. This was followed up by Wawira Njiru being awarded the 2018 Global Citizen Prize for Youth Leadership thereafter receiving US$250,000 from the Global Citizen in partnership with Cisco.
‘‘ It’s easy to get side-tracked especially if you’re talented (or think you are) in many things, but there’s a lot of value in mastering one thing and learning how to do it well. There’s also a lot of value in consistency and learning how to do things excellently. It may sound boring but doing the same thing over and over will help you become better and a master in your field.”
Christain Ngan, Founder Adlyn Holdings and Madlyn Cazalis Group, Cameroun
Adlyn Holdings and Madlyn Cazalis Group designs, manufactures, transports natural beauty products and operates in Central Africa and West Africa with more than 200 distributors (supermarkets, pharmacies and beauty institutes). Ngan was listed two consecutive years (2014 and 2015) in Forbes magazine as one of the 30 Most Promising Young Entrepreneurs in Africa.
‘‘ My greatest weakness was not having enough talent around me for a long time. It was difficult to find the right people. Then I decided to train, motivate and coach. Training is important in Africa because we often tend to choose between honesty and competency. It was difficult to find honest, skilled people. But, with time, I managed to empower my employees and they are now good managers.’’
Churchill’s Njorku was named by Forbes as one of the top 20 technology startups in Africa (Forbes Africa Magazine, 2011) and by FastCompany as one of the most innovative companies in Africa (FastCompany February 2017). Over the years Njorku has grown to serve 200,000+ monthly unique users across Africa. Njorku.com is one of Africa’s first job search engines that help thousands of job seekers daily find jobs in locations nearest to them. Mambe Churchill Nanje taught himself software engineering and is based in Buea, Cameroon.
He has this advice for startups in one of his interviews with Whoot Africa:
‘‘ To be successful in business, you must believe in yourself, be patient, extend your comfort zone, expect and be ready for failure, integrity and be very passionate in whatever you do… Business in general has a lot of obstacles but the main ones are finding the right people for the job and raising capital. I was lucky to be self-taught so I get to hire people and train them on the job. I also was opportune to make a lot of friends that trusted me and overtime they gave me loans and financing opportunities to continue with my ventures.’’
Arianna Huffington, Co-Founder Huffington Post
The Greek-American Arianna is co-founder of The Huffington Post and also the author of the New York Times best-seller The Sleep Revolution. She has stepped down as Editor-in-Chief of The Huffington Post to pursue her new wellness startup, Thrive Global. Her business advice for entrepreneurs who want to start a business for the first time is:
“If you’re going to start a business, you need to really love it, because not everybody is going to love it. When The Huffington Post was first launched in 2005, there were so many detractors. I remember a critic who wrote that The Huffington Post was an unsurvivable failure.”
“When you get reviews like that and detractors like that, you have to really believe in your product. When you really believe in your product, you are willing to deal with all the naysayers and persevere.”
The founder of WPBeginner, Optinmonster and several more successful online businesses, who has also learned so much in business in his 25 years as an entrepreneur has this advice for budding startup owners:
“Often new entrepreneurs wait too long to put their product out in the market. With limited resources at hand, its crucial that you get an MVP out ASAP and start getting traction. Take the user’s feedback to iterate and improve your products.”
“Not launching fast enough is a mistake you simply can’t afford to make. If you want to get an edge over others, launch now!”
Sujan is the co-founder of the content marketing agency, Web Profits. Here’s his best business advice for first-time entrepreneurs who want to start a business today:
“The most painful mistake I see inexperienced entrepreneurs make is copying or doing the same things that successful entrepreneurs have done, expecting similar results. What first-time entrepreneurs don’t realize is that the world is not a vacuum and there’s more going on behind the scenes than it appears. There’s much more effort that has gone into creating the success they see on the surface, and there’s no guarantee that a particular tactic or strategy will be successful for everyone.”
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Some Lagos Based Startups with The Nigerian Vice President, Prof. Osibanjo
What startup ecosystem is the most valuable in each geographical regions of the world? and;
Which ecosystem has the highest number of startups?
Why Lagos may not have the highest startups in town, it however has one of the most valuable startups in Africa, and here are some of the reasons.
The Size of the Lagos Startup Ecosystem Has Seen Some Appreciable Growth.
Although the ranking pointed out that Lagos does not have the highest number of startups, as at 2017, it did however state that the city has an estimated 400–700 active and viable start-ups that have sprung up.
According to Michael Porter, the more people you have in a particular industry, the higher the productivity of the industry’s participants, and the higher the level of innovation, and the higher the rate of new business entry. Notable startups such as Flutterwave, Farmcrowdy, Iroko Tv, etc are all part of a teeming ecosystem.
Startups In Lagos Have Formed Local Communities and Clusters Through Which They Help Themselves.
When the Lagos State Government collaborated with CcHUB, MainOne, TechnoVision, and others to launch a 27km fibre optic cable project around the Yaba neighbourhood in 2013, little did it know that startups would one day form clusters around the neighbourhood that would give birth to a vibrant startup community. Today, there are so many startup hubs and co-working spaces among startups in Lagos which reinforce a sense of community among startup owners. Notable among them are the:
The Facebook’s Lagos-based NG_Hub, which is run in partnership with CcHub. It is Facebook’s first community hub in Africa. The hub offers work spaces, meeting rooms, games and chill out room, an event space and a well catered café. The hub includes Facebook’s Fb Start Accelerator programme — a research and mentorship-driven programme focused on those building high tech solutions, with a focus on artificial intelligence (AI), machine learning, augmented reality (AR) and virtual reality (VR). This has helped to create a succession of successful startups.
StartupGrindis a global community powered by Google for Entrepreneurs, with goals to educate, inspire, and connect entrepreneurs . The Lagos arm, with over 7000 members, meet at least once in a month. There are other large startup hubs and communities spread around the city.
The importance of community for every startup ecosystem is captured by Michael Porter, when he wrote that the degree of interconnectivity is the second key dimension of industry clusters because “economic activities are embedded in social activities; that ‘social glue binds clusters together.
Production Scale Up and Startup Output Volume
Although the level of funding a startup gets does not determine its value in terms of production and startup output volumes, how well a startup ecosystem performs also depends on its production capacity. While information about the production scale of startups in Lagos are still sketchy, appreciable startups in Lagos have justified their existence. With $15.7 million in funding, Flutterwave (the payment processing & electronic remittance startup) for instance, has been able to process over $1.2 billion transactions for African businessmen. In fact, the total processed value for transactions conducted in 2018 signified a 401% increase when compared to $205 million in 2017.
More Startups In Lagos Are Plugging Into The Global Value Chain
A higher level of global connectedness helps startups integrate into the global fabric, raising their level of performance. Most startups in Lagos, which have gotten the strong funding capacity are beginning to get globalised. The recent listing of Jumia, a startup started in Nigeria, on the floor of the New York Stock Exchange, is a great case in point. Flutterwave has also got licenced to operate in the United Kingdom and Zambia bringing the total of countries it operates in to 7 (Nigeria, Uganda, Tanzania, Kenya, Ghana, and now United Kingdom and Zambia). However, an indicting fact is that startups in Lagos still have one of the lowest rates of foreign customers at 6% with overall average at 23%, suggesting challenges to go global. Only 11% of start-ups have plans to expand globally, according to the Genome Startup Report.
Few things can signify the arrival of a city as a contender on the global startup scene a visit from Mark Zuckerberg, who came to Aso Villa Demo Day to share his journey to developers and the 30 startups in attendance. As a more general trend, the ecosystem benefits from globally connected expats bringing back knowledge and financial capital after working in the U.S or U.K, writes Startup Genome.
Lagos’ Startup Ecosystem Has High Valuation
Valuations of startups, which are tied to funding rounds, occur regularly and in higher numbers, providing better and faster feedback on the quality and improvement of a startup ecosystem.
From the Genome Report, the Lagos startup ecosystem was worth $2 billion as of 2017 making it the most valuable ecosystem in Africa and only second in number of start-ups after Cape Town. Cape Town has the largest ecosystem on the continent, with between 700–1,200 tech start-ups.
The Growth Index of Lagos Startup EcosystemIs High
The growth momentum of each ecosystem varies, but it is not easy to compare them and account for different local perspectives.Startups in Lagos have grown so fast since the creation of the first startup community in Lagos in 2011.
From the original Yaba neighbourhood startups — such as Konga, eCommerce company which arrived in 2013, valued at approximately $200 million after raising $20 million in Series C rounds; Africa Internet Group, which transferred six of its companies to Yaba in 2014 with $469 million in 4 Rounds from six investors —
to subsequent startups such as BudgIT, Andela–a Nigerian-founded talent accelerator for programmers that has campuses in Lagos, Nairobi and New York; Hotels.ng, which claims to be the largest hotel booking site in Nigeria and which secured $1.2 million in funding from Omidyar Network to expand its listings across Africa,
the Lagos startup ecosystem has witnessed steady growth and development.
Other notable startups include Iroko TV— the biggest digital retailer of Nollywood worldwide with total funding of $40 million — and Paystack, an alternative e-payments company which raised $1.3 million investment in December 2016 from international investors.
The Talents of Most Lagos Startups Founders Are Above Average
Although it is difficult to quantify the extent of a founder’s talent, certain metrics such demographics, economic and educational data, may go along way. The Global Startup Ecosystem Report, 2017 hints that the Lagos ecosystem has the 9th highest rate of Founders with an Undergraduate Degree at 59% while 93% of them have a technical background, the 3rd highest rate in the world.
The number of women founders at 14% on average is only 2% shy of global average at 16%. Cape Town, South Africa however has 25%.
Lagos Startup Ecosystem Is One of The Most Funded Startup Ecosystems in Africa
Founder Irokotv, Jason Njoku
The rate at which startups obtain funding in Lagos has also improved. iROKOtv, often referred to as ‘Netflix of Africa’, for instance, has secured several funding rounds in excess of US$40m, since the company started in 2010. With a Series A Venture Capital investment of $3M from the US-based hedge fund Tiger Global, it is now the world’s largest online platform for African entertainment.
Andela which was founded in 2014 has so far also obtained more than $180 million in fundraising. Its investors include Steve Case, Omidyar Network, Founder Collective, Rothenberg Ventures, Learn Capital, Melo7 Tech Partners, Chris Hughes, Generation Investment Management—an investment firm co-founded by former US vice president Al Gore, Chan Zuckerberg Initiative, GV (Google Ventures), Spark Capital, CRE Venture Capital, among others
Hotels.ng,started in 2012, has now been transformed into one of the biggest online hotel booking agencies in Nigeria, after the startup was able to secure investment of $225k from SPARK in 2013. It also got Series A round of $1.2m funding from EchoVC Pan-Africa Fund, a seed-stage technology fund, and from Omidyar Network, and it currently has a total funding capacity of $1.5m.
Again, Vanso International Corporation, a mobile payment Company was able to attract an USD75 million investment from Interswitch Limited in March 2016.
Interswitch Limited, a payment switching and mobile payment company also attracted USD110 million in December 2010 from Helios Investment Partners and Adlevo Capital Managers, LLC and USD20 million from International Finance Corporation in September 2011.
Founder of Wakanow
The US investment giant The Carlyle Group has also invested $40m in Nigeria’sWakanow, an online travel agency launched in 2008, while the Nigeria-based trucking logistics startup Kobo360, raised $7.2m in 2018 from the International Finance Corporation and private funds in the US and Nigeria. The Lagos-based start-up is now targeting another $15m-$20m by the end of April to finance its expansion in East Africa.
A recent report by the US-based venture capital firm Partech Partners has ranked Nigeria as the number two country with the highest funding for tech startups in Africa, with $306m raised in 2018 alone. The city of Lagos was the greatest beneficiary of the funding.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
