Fintech: The trend of African start-ups chasing telecom talent

By Kévin Poireault
Posted on Tuesday, 28 June 2022 16:58

Telecoms executives are increasingly leaving their jobs to join the ranks of fast-growing fintech start-ups ©Getty Images

Booming African fintech start-ups are increasingly recruiting talent from the telecoms sector to drive their growth strategy. Oluwabankole Falade had spent more than ten years at MTN when he was recruited by Flutterwave in June 2021 as chief regulatory and government relations officer.

Pardon Mujakachi, who recently joined Chipper Cash as vice president of strategy and partnerships, boasts eight years’ experience at Econet and more than a year at Etisalat. Wave has welcomed Ibrahima Mall, a digital marketing manager with six months’ experience at Orange, and user growth regional lead Fabrice Zadi, who had spent his entire career in telecoms, first at Orange and then at Moov (Etisalat).

As these examples illustrate, telecoms executives are increasingly leaving their jobs to join the ranks of fast-growing fintech start-ups.“Very often, we go looking for them ourselves,” says Omar Cissé, founder and CEO of Senegalese fintech InTouch.

Although it is difficult to illustrate this trend with concrete figures, the fifteen or so African tech interlocutors we contacted have all confirmed its existence.

“We are snatching up this type of profile because they are already at the heart of the fintech ecosystem, which significantly reduces the adaptation period,” says Cissé, who lured Salla Niang away from Free (ex-Tigo) to become InTouch’s commercial director in 2018.

“In this field, the talent pool is quite small,” adds Aude Juglard, CFO of the Ivorian fintech CinetPay, who confirms that start-ups in the sector are engaged in a “real war for talent” against Orange, MTN and others.

“Convincing these types of profiles to join our start-ups is at the very heart of our business model,” adds Tobi Lafinhan, co-founder of Venture for Africa, a customised recruitment platform for African start-ups.

Strategic positions

If fintechs and telcos speak the same language, it is primarily due to one phenomenon: mobile money. “In sub-Saharan Africa, the adoption of the internet first came with the mobile phone,” says Souleymane Gning, founder of the Senegalese start-up Assuraf. “Then, in recent years, given the difficulties banks have had in penetrating African markets, it is also via telecom operators that digital finance has spread.”

It is perhaps no coincidence that Nigeria, the exception that proves the rule since mobile operators have long been deprived of a mobile money licence – Glo and 9Mobile received theirs in 2020, MTN and Airtel only last April – was the land of the first big success stories in African fintech, with start-ups such as Paystack or Flutterwave. Some operators, such as MTN, are seeing the wind change and “are now claiming to be fintechs”, says InTouch’s Cissé.

“African fintechs will be poaching telco executives, especially for strategic jobs (growth, partnerships, marketing, product management, etc.)” says Venture for Africa’s Lafinhan.

And for good reason: these start-ups target the bottom of the pyramid, the “unbanked” populations, these potential customers that operators have been luring for years, first via communications services (SMS, calls, data) followed by financial offers (airtime, mobile money…).

I’ve heard that Wave pays as much as or better than Orange in Senegal

With their knowledge of the regulations in force and their close relationship with governments, “the [telco] operators’ executives also make good country or regional managers”, says Cissé, who has hired Franck Bossa, formerly of MTN, to take up the post of West Africa manager at InTouch.

Developers – a rare commodity in Africa as elsewhere – are however little affected by this trend, since African operators are used to outsourcing this skill.

Growth phase

According to the entrepreneurs, managers and experts we interviewed, this trend is still mostly confined to fintechs in the growth phase, i.e. those that have raised at least one round of Series A.

“While they operated in a more ‘chaotic’ way at the beginning, at this stage, start-ups need to structure themselves,” says Lafinhan.

“As they grow, fintech start-ups need more specialised profiles, very similar to those found at the big operators,” adds Justin Norman, founder of The Flip, a site that analyses the tech scene in Africa and hosts a job platform.

“Telcos are also incredibly good at growing the user base, which is a crucial skill for these big start-ups,” says Toffene Kama, founder of Eywa Miles, a Senegalese logistics start-up, who has just moved to the investment side of Mercy Corps Ventures.

Telco operators can still offer more important advantages than start-ups, such as company cars or even apartments

But there is a more trivial reason why telco executives give priority to mature start-ups: they can easily meet their salary expectations.

“Lately, for executive positions in Côte d’Ivoire, the candidates we meet are asking us for between two and three million CFA francs net per month (€3,000 -4,500),” says CinetPay’s Aude Juglard.

While she admits that her company has not yet managed to attract these kinds of profiles for strategic positions, the unicorns are now able to offer salaries that are close to the sums offered by telecoms operators. “I’ve even heard that Wave pays as much as or better than Orange in Senegal,” says Kama.

The buyout card

So have telcos lost the battle? Nothing is certain. “[Telco] operators can still offer more important advantages than start-ups, such as company cars or even apartments, and the possibility of joining competitions to win prizes,” says Juglard. But start-ups do offer a great advantage to employees signing a contract: stock options.

Having become commonplace in the African tech ecosystem, they are “a key argument for fintechs to attract talent”, says Justin Norman. An argument that “an Orange or an MTN cannot afford to bring to the table”, says Kama.

African operators who understand the need to buy start-ups will stay in the innovation race and will be able to keep their talent

For all that, the major African operators still enjoy a solid reputation and should continue to recruit talent, particularly from schools in French-speaking Africa, according to Juglard: “In Côte d’Ivoire, for students at the Institut National Polytechnique Félix Houphouët-Boigny (INPHP), one of the country’s most prestigious engineering schools, it is still a source of pride to go back your family and say that you work for Orange,” she says.

So that reputation still benefits Orange Money, a separate entity from Orange, over a lesser-known competitor. The success of Wave may well reverse this trend.

While he admits that this exodus of talent to start-ups is likely to increase in the future, Lafinhan believes that telco operators still have a few cards to play in order to retain them: “On the one hand, they need to provide more support to start-ups and partner with them; on the other, they need to allow their employees to develop their own projects, by promoting intrapreneurship programmes or by taking inspiration from Google’s 80/20 rule, which encourages its staff to devote 20% of their time to innovative personal projects.”

Kama’s perspective is much more radical: “Partnerships between start-ups and telecom operators have never worked! The only way out is through mergers and acquisitions.”

And he quotes Bob Collymore, Safaricom’s legendary CEO, who died in 2019: “In his last letter, he regretted that Safaricom had behaved predatorily towards Kenyan start-ups, with lots of lawsuits, people coming to pitch an idea to the Vodacom subsidiary and then finding the product marketed without them, etc., and for not having developed an acquisition activity instead. Today it is more or less the same story between Orange and Wave in Senegal. If Orange, instead of fighting Wave, had bought start-ups, it would certainly be more competitive. The first African operators who understand the need to buy start-ups will stay in the innovation race and will be able to keep their talent”.

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