On 2 December, six West African heads of state stood up to the IMF at a conference it organised, arguing that development will come to a standstill if the Bretton Woods institutions do not change their approach.
Nigeria’s tech pioneer: ‘The future is not to rely on US accelerators’
A key pioneer of the Nigerian tech start-up scene, PitchDrive's Bosun Tijani is adamant that only local ecosystems can sustain the sector and prevent an exodus of talent to the West
[From our archive]
TAR: What is PitchDrive, and how does it help shape start-up finance in Nigeria?
Bosun Tijani: PitchDrive came out of working with entrepreneurs and seeing how the ecosystem worked, not just in Nigeria but across Africa, over the past five to six years. When we started, just like so many other technology hubs, the biggest challenge was finding early-stage funding for businesses. But I think we’ve gotten over that. Generally for most major cities in Africa, if you’re building a tech start-up and you need anywhere between $50,000–$250,000, there are quite a number of people who can fund that.
But unfortunately that then creates a pipeline of businesses that need money. Some have failed; but some are now somewhat successful and need more money at the Series A level ($2m-$10m). […] And most people who traditionally invest in Africa are above the Series A level […]. So there’s that huge gap to fill and the local investment community is not yet invested in that.
So what’s the solution?
We thought instead of just sitting down, folding our hands and complaining about it we should try and do something, which is showcase Africa and tech in Africa to people who traditionally have invested in Africa – and that’s Europe, to be honest. I know the US is doing quite a lot, but there have traditionally been ties between Africa and Europe in so many areas.
“If the ecosystem is entirely
foreign the deals are not
going to continue to flow”
So with Google for Entrepreneurs we brought 15 top African startups on a tour of Europe starting in London on 14 August. It was hosted by Google Campus and a few other organisations like CDC and Omedia. It went from Amsterdam to Berlin and Zurich, and it will end in Paris.
The goal is to pitch to at least 50-60 investors, and we worked with quite a number of partners in each city to help us identify and invite those investors.
It seems that the private-equity interest of the past decade has hoovered up much of the venture-capital-size African tech companies and rebuilding that pipeline is the challenge now.
It is the challenge. There’s now increasing attention on companies in Africa from the US, unfortunately for most of us who play locally. While the US money is good – it’s readily available – the sad part of it is you have to become a US company. That’s not sustainable in the long term for us because the ecosystem you’ll need to continue to inspire people locally to build businesses can’t be completely foreign. If it’s foreign, the deals are not going to continue to flow. Because you need something that is tied to your economy, that keeps generating opportunity locally.
But if all the leading African companies are now American companies and they repatriate almost all their earnings back to the US, it’s going to weaken our ecosystem eventually.
So the future is not to rely on accelerators in the US for funding African businesses, which is the trend in the last 18 months. All the serious ones, like Flutterwave, they’ve been through the accelerators – either Y Combinator or 500 Startups. They get funding, but it has it’s negative impact, which is not sustainable for the continent.
You are saying essentially that Silicon Valley outfits are harvesting African talent, right? Nigeria has a sovereign wealth fund that is said to be $5bn, why not put a third of a billion towards financing Nigerian start-ups?
I think that’s what we would like to see. The challenge with ideas like that in Africa is […] there are so many things you can put [money]into that will generate revenue that are much better known than tech. You’re fighting against those things. And being able to justify to those in charge that you should put some part of the money towards this is always a headache.