Innovation has become a constant topic in Africa, but there has been an emphasis on doing things and less time has been spent thinking about the impact of what’s happening. RUSSELL SOUTHWOOD, CEO of Balancing Act, tries to understand what it means.
Everyone involved in innovation in Africa likes to hear a warming story. As one of the presenters at Fail Fest London put it last week, there’s got to be an image showing a girl looking into a computer screen that puts a golden light on to her eager, upturned face.
Africa’s Innovation agenda has two threads – one donor driven and the other focused on private investment – but as with much else on the continent, each is intertwined with the other.
So whether it’s a donor driven competition or a private investor, there are always parable narratives that capture the spirit of what everyone is hoping to achieve. Whether it’s farmers using phones to get better crop information, a young women buying insurance on her mobile or a young start-up winning a competition prize, these seductive narratives work a bit like the fraudster’s pitch.
I want to be told that innovation is changing lives and Africa is on an upward curve but the danger is that we all end up believing our own propaganda. Because it becomes widely circulated in the media and on social media, it doesn’t necessarily mean it’s true. So what follows is my attempt to try and take apart what might be working from what isn’t.
Start-ups in Africa will tend to work in the larger markets where there are sufficient consumers with mobile phones and enough disposable income for them to get user numbers. Without user numbers, there will not be continuing investment and/or more grant funding. On this basis, start-ups are more likely to be successful in Ghana and Nigeria and Tanzania than they are in Mali, Mozambique or Malawi to take three smaller economies at random.
Start-ups have the same problems that larger companies do in Africa. It’s hard to trade across national boundaries, something that Mo Ibrahim has made one of his constant themes. Many country markets are simply too small but operating in more than one small country is challenging. The absence of common market rules across countries makes the continent a nightmare even for well-endowed multinationals. So it is perhaps hardly surprising that the majority of African start-ups stay in a single country market.
Multi-country roll-out requires capital and some degree of patience and neither of these are in steady supply at the moment. There are a couple of good examples like Africa Internet Group and One Africa Media but these are the exceptions rather than the rule. Despite the constant drumbeat of the Africa Rising tune, there is actually a shortage of investors for African start-ups.
There have been several straws in the wind. Kresten Buch’s pioneering accelerator 88 Mph has pulled back from further work as it tries to find ways to get money out of the start-ups it’s already invested in. Overall, the number of exits from the African start-up ecosystem has been tiny. Another incubator operator told me that only one deal was on the table when they when they went looking for investors so it was not a long queue. For the few bigger international investors, Africa remains a tiny part of their investment portfolio.
Mbwana Alliy of the Savannah Fund (an accelerator and seed fund) told me that almost everyone he was able to raise money from had some connection with Africa and that connection was often personal: for example, they had been on holiday to the continent. Investors are not sitting on the West Coast of America saying I wonder what’s happening in Silicon Savannah. Indeed quite a few would probably be hard-pressed to find it on a map.
Worse still, the current international Internet boom will soon reach its bust: there have been at least two of those since I started following events on the continent. Even worse still, the constant currency devaluations in major markets like Ghana, Kenya, Nigeria and South Africa mean that the value of any investment and its revenues erodes along with the currency.
But let’s put the money to one side for a moment and just look at impact. Start-ups have been responsible for creating a new atmosphere of innovation and are changing how things are going to be done. Although it’s not explicitly stated, all of the good energy and ideas generated by African start-ups is supposed to rub off on the wider society. And they have gone a long way to helping change the mood music in some countries about what can be done if you’re young and have an idea.
Also as Bastian Gotter of Spark told me, the start-ups can offer young Nigerians the chance to break out of the need for connections, patronage and bribery. When you’re able to connect directly with a consumer market, you don’t necessarily need those things. However, both of these things – the rub-off effect and breaking away from patronage structures – may be long-term goals that will take more than ten years to achieve.
So let’s look at some of Africa’s bigger problems and see whether start-ups and innovation can bring about change. Nairobi has gone from being a busy city to one where when there are heavy rains, there is complete gridlock. People sleep in their cars overnight. Despite all the new road-building, even when it’s not raining it can take 2-3 hours to get across the city. This is a productivity issue on a massive scale. Has there been innovation from start-ups or Government to tackle the issue?
There is the ever-dependable Twitter feed @Ma3Route but that simply is about negotiating chaos not changing it. There is much that can be said about Uber (and other local Kenyan versions) but they are unlikely to crack Nairobi’s gridlock. I’ve picked on Nairobi but there are a dozen other African cities with problems that are as bad. Car sharing? Public transport? Rail systems? Park and ride? Bicycles? Electric vehicles? You know the answers to these questions.
Energy is a pressing problem of huge scale for the continent. It’s also a productivity problem as every time the power goes off, people can’t work. Furthermore, everything has to be constantly rebooted and breaks down more often as a result. Local diesel fuelled generators are hugely inefficient.
VC4Africa has an admirable accelerator scheme for energy start-ups. Microsoft has put money into a real wind technology innovator Saphon Energy. But against the scale of the task, these are but tiny gnat bites on the elephant’s bottom. Akon Lighting is a fascinating
initiative (see Energy below) but it is barely off the starting blocks. Where are the micro-grids? The energy distribution players? The tech innovators proposing to import Elon Musk’s Powerwall batteries or their less efficient equivalent from China?
Education is a key part of any different future in Africa. Almost everyone who has been through the system – in whichever country on the continent – will tell you that rote learning does not breed people who can analyze and problem solve. Teacher absenteeism remains high. Projects like the late-lamented Mark Bennett’s iSchool in Zambia are heartbreakingly good. There is also a stream of impressive young African innovators teaching STEM skills through things like robotics and coding. But none of this has yet really entered the bloodstream of African education systems.
I don’t want to bludgeon the point but the impact of innovation so far has been largely marginal on anything that Government delivers. Yet each of the three areas above – transport, energy and education – offer enormous opportunities for Innovation.
Making All Voices Count – an initiative to encourage social start-ups to promote transparency and accountability – is a great initiative. But it relies on trying to persuade a deeply unproductive public sector to react to pressure to become more productive for its citizens. Where is the encouragement for the public sector to innovate? To find ways of spending public funds more effectively? Where are local city innovation schemes? The innovation schemes that get local government to promise and deliver?
But this is not just a public sector issue for many of Africa’s larger private sector companies still have not yet got the innovation message. Some banks have taken initiatives to encourage and acquire fintech start-ups but these initiatives are the exception rather than the rule. M-Pesa started the whole thing and they are trundling along behind. Many of the traditional private sector companies in Africa remain stuck in working practices that went out of use elsewhere in the 1960s and 1970s.
Why does productivity matter for Africa? Let’s just take one example that runs like a thread through all the issues raised above. Africa absolutely must have Internet bandwidth that is cheaper than elsewhere globally because it does not yet have the volume of people who can afford it. There will only be a critical mass of users if lower bandwidth costs are achieved.
In terms of data infrastructure, Sub-Saharan Africa is probably one of the most expensive places to operate globally: diesel deliveries for some base stations in one West African country require a boat and hand wheelbarrow for delivery. For data to become cheaper, the mobile companies (or someone else) need to be innovating new ways of delivering bandwidth more cheaply. Bandwidth is the petrol that fuels innovation and without cheap bandwidth innovation in Africa will be stillborn.
As Harambe’s Matthias Reichwald wrote in Issue 70 of Innovation in Africa:” I see enormous potential for the continent to take the lead in designing disruptive systemic solutions inspired by the vast infrastructure vacuums that still exist in most countries. Whether these are innovative ways to deliver health care and education, groundbreaking ideas in agribusiness and transportation or unprecedented ways for more inclusive governance or approaches to produce energy. Africa’s advantage is that it can leapfrog in areas where the West is dealing with heavy legacy structures which impede innovation”.
The challenge now is to turn this analysis into projects that fundamentally change Africa rather than simply provide seductive success parables that give their promoters a warm glow.
* Russell Southwood is CEO of and founder of Smart Monkey TV. Subscribe to Smart Monkey TV on YouTube
Naspers feeds into Latin America’s tech funding
Movile will get $400m funding from the SA-based technology investment giant for iFood expansion.
Movile is to receive US$500-million in funding for iFood in the largest tech funding in Latin America to date. Naspers and Innova Capital have committed to invest $400m of new capital into Movile to use for further investment in iFood, the leading online food delivery platform in Latin America, of which Movile is a majority shareholder.
Movile and Just Eat have already invested $100m in iFood during 2018. iFood’s extraordinary growth and the vast market opportunity in Brazil and more broadly in Latin America has driven the increased investment commitment.
iFood’s monthly orders in Brazil have fed more than 9 million customers in the past twelve months, 16 times the nearest online competitor, in terms of daily active users. This means its partner restaurants are serving the biggest population of consumers ordering food in Latin America. iFood has 50 000 restaurant partners and uses 120 000 couriers.
The increased investment commitment from Naspers, Innova and Movile is expected to accelerate growth, speed up product development and innovation, and fuel geographical expansion for iFood across the region. The company’s vision is to gain deeper knowledge of consumers through artificial intelligence technology, to personalise the food delivery experience – and at a reduced price, because of improved logistics.
“Movile is very fortunate to have long-term investors who have supported us for the past decade to help achieve our goal of transforming the lives of more than one billion people and thus we are able to continually back iFood to ensure it remains the market leader,” said Fabricio Bloisi, Movile CEO.
“Our entire ecosystem of companies is focused on allocating resources and energy towards our one billion people goal. iFood is leading the way, fueling unprecedented growth through its innovative technology platform, providing consumers, couriers and restaurants with the best experience in food ordering and delivery.”
Larry Illg, CEO of Naspers Ventures, said: “iFood has established itself as a technology leader in Latin America and its success stacks up with some of the most innovative food companies that are leading regions in North America, Europe and Asia. We have been impressed by their execution in Brazil and remain committed to backing the company on its path to transform the entire food chain to better serve consumers.”
Online food delivery is experiencing massive expansion globally. According to latest reported results, Grubhub grew daily average orders 39% year-on-year, reaching over 416 000 orders per day. In Latin America, iFood has reached 390 000 orders per day just in Brazil in the last week of October, compared with 183 000 in October 2017, representing 109% growth.
iFood CEO Carlos Moyses said: “We want our consumers to have an amazing delivery experience from the moment they order their food to the moment it arrives. Our partners – the restaurants and delivery fleet – make that happen by living our purpose of improving people’s lives using our services.
“iFood exists for our customers and, with an increased investment commitment of this size, we will be able to build out our state of the art technology platform, and increase our courier and restaurant partners to even better serve our current and future customers in Latin America.”
Hide your sheep, Spyro is reigniting
Spyro, the iconic purple dragon that entertained living rooms worldwide in the late ‘90s, is making a return with the release of Spyro Reignited Trilogy.
Spyro Reignited Trilogy introduces players to a fully remastered game collection with a re-imagined cast of characters, animations, environments, new lighting and recreated cinematics—all inHD. Now fans can explore more than 100 lush environments filled with new detail, that brings the Dragon Realms and Avalar to life . The trilogy is available for PlayStation 4, PlayStation 4 Pro and the family of Xbox One devices from Microsoft, including the Xbox One X.
South African distributors Megarom provided the followjng information:
In Spyro Reignited Trilogy, lead developer Toys For Bob is giving fans an all scaled-up version of the original three Spyro games that started it all, Spyro the Dragon, Spyro 2: Ripto’s Rage! and Spyro: Year of the Dragon, but with a modern-day feel that makes it fresh and fun for today’s player. Adding to the fun, voice actor Tom Kenny is returning to the franchise as the voice of Spyro in all three remastered games. Longtime fans will be treated to Toys For Bob’s reimagined version of the classic soundtracks, in addition to an all-new title-screen theme from original soundtrack composer Stewart Copeland.
Additionally, the new game brings an in-game audio feature that allows players to switch between the original and the newly remastered soundtracks, for those who want a more classic gameplay experience. Players can simply fly in to the “options menu” at any time during gameplay, unleash their preferred nostalgic or scaled-up groove, and glide right back into the Spyro action without losing saved data.
“It’s been a real pleasure to bring back one of most iconic video game characters of all time through the Spyro Reignited Trilogy,” said Paul Yan, Co-Studio Head at Toys For Bob. “We’ve poured everything we’ve got into making sure every detail was done right to deliver a great Spyro experience for fans. We hope players will have as much fun revisiting the Spyro world and characters as we did remastering them.”
In the road up to the official release of Spyro Reignited Trilogy, Activision Publishing, Inc., a wholly owned subsidiary of Activision Blizzard, created a first-of-its-kind, life-sized, fire-breathing and talking Spyro Dragon drone. The drone took off from “Stone Hill” castle near New York City, spreading his wings across the U.S. to explore the cities and iconic landscapes that resemble levels and themes from the original Spyro games. As part of the tour, the Spyro drone chased sheep, fired up some BBQ and delivered an early copy of Spyro Reignited Trilogy to fellow O.G. and entertainment icon, Snoop Dogg. Highlights from the Spyro drone’s delivery to Snoop Dogg can be found here.
“Fans have been asking Activision to bring Spyro back for some time now. The response to Spyro Reignited Trilogy has been great thus far, and we’re absolutely thrilled that we’re able to continue to reimagine and reinvigorate some of the most iconic videogames and characters of all time with our remastered experiences,” said Steve Young, Chief Revenue Officer at Activision. “With this year being the 20th anniversary of Spyro, there’s no better time to pay homage to everyone’s favorite purple dragon.”
The Spyro community is invited to geek out and elevate their fandom even further through the elite global partnerships from the Activision Blizzard Consumer Products Group (ABCPG). Collaborations with Funko, Traly Pins, Exquisite Gaming, KidRobot, USAopoly, Trends International, Rubber Road, and Changes have created new avenues for fans to share their love for the return of Spyro, the original roast master. Spyro consumer products across apparel, collectibles, figurines and more are now available at retailers worldwide. Fans can also take advantage of the GameStop exclusive Spyro TOTAKU Collection.