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There’s no intention to make it look like so much of a biggie, but the truth has to be said. 2018 is fast-ending, and once the New Year begins, umpteen entrepreneurs will be looking to break into markets, expanding and all sorts of 2019-is-the-year kind of business moves. There’s no doubt that the African economic ecosystem will have to make room for more entrepreneurs because this year could have been for some a water-testing period, as they would want to call on all forces necessary just to get to the top of the startup chain.
But before you take that quantum leap in 2019, perhaps taking a look at which sectors made the most millionaires this year could ultimately make even the tiniest step you take make your to-be company’s revenue looking like a premium phone number.
While the term “millionaire” has taken on a whole new meaning on the continent, you shouldn’t just be all excited about the money. Being successful is all about making an impact – and there’s no way you can make an impact without being a millionaire.
Looking to create values that would touch and better the lives of people? Then these impact entrepreneurship sectors may be the best for your startup.
Image courtesy: ABC News
While a marine lecturer from the University of Ghana uses drones to monitor Ghana’s eroded coastline and looks to bring solutions to the challenged Fuvemeh people, Africa is cashing in big on the industry of these devices.
Drones are no longer just the classified tools used to chase terrorists and take breathtaking high-altitude snapshots. They’ve gone from that to find versatile and impactful roles in Africa, helping from logistics and farmland management to humanitarian deliveries and conservation support.
Rwanda’s Zipline is a drone delivery startup that distributes blood and medical supplies in the country, which has seen successful pilot operations that are making its expansion into Tanzanian territory possible and a necessity.
President of the African Development Bank (AfDB) said in August that future farmers would sit in their homes and use drones to monitor their farms. While this is largely true, Ivorien Investive Group, an agritech startup is already helping in fulfilling this prophecy by using drones to help farmers conduct pre-activity studies on their farms and harvest forecasting with the aim of optimizing production.
In 2015, Maisam Pyarali alongside five peers built a drone to help Tanzanian farmers monitor their crops. Aerobotics in South Africa is a startup that uses drones to provide bird’s eye surveillance for farmers to provide essential data that can boost crop yields by up to 10 percent. This drone services now operates in 11 countries including the United States, the United Kingdom, and Russia.
Sudan’s Massive Dynamics develops drones that can plant trees all by automation. The first breakthrough invention is being used to plant Acacia trees from the sky. While South Africa’s Rocketmine uses drones in the mining industry for data collection, Cameroonian Drone Africa builds drones that could be used in gas mine detection to reduce the risk of accidents, and then Panmarine Technology is solving the problem of waste and chemical hazards by collecting both with drones from canals and ports. While this set of drone startups are impacting climate and environment, others are making significant strides in warehousing, media, natural disasters, archaeology, and others.
The African drone industry is yet new and emerging, but relatively so. With a wide range of possibilities for this millennial technology, Africans could have, today, entrepreneurs to thank for a continent where ease-of-doing-things is the culture. And, with thanks comes revenues.
image courtesy: The British Mountaineering Council
Garbage and scrap are no longer useless, despite the fact that they lie around in streets and constitute a nerve-racking nuisance.
They have nagged along and troubled urban Africa for decades, which led to advertent burning, burying or dumping. But rather than dumping waste in water bodies and clogging them, making rivers and lakes inhabitable for wildlife, perhaps a business idea could suffice and make an impact.
No, not perhaps. More than 80 percent of the continent’s waste ends up as landfill, and given the rising nature of Africa’s population, it won’t be long before the waste problem would become a full-blown disaster.
Speaking of impact, clean-tech startups are on the rise, armed to the teeth to combat Africa’s waste problem, impact the lives of Africans and cash in on what the sector has to offer – and so far the withdrawals have been big. I love clean-tech because it is one of the few business ideas that don’t quite require capital and sourcing of expensive materials. As odd as it may sound, waste is free, and raising millions from it is more or less free money.
In South Africa, it’s a different ball concept in that it entails converting waste into animal feed. AgriProtein grows maggots from waste collected from a variety of markets, household and business. The company processes the life forms into highly nutritious protein supplements that have all the characteristics of a fish meal animal feed. This company has raised up to USD 30 Mn in funding, which makes it one of the best-funded insect farming businesses known.
In Ethiopia, it gets even more interesting as the Repi Waste recycling factory is converting waste to electricity. While such a solution is quite shocking (pun very much intended), this Addis Ababa-based company is producing 50 megawatts of electricity from across the city that is expected to supply 3 million homes while also significantly cutting down on carbon emissions. In Ghana, Accra’s very own Makafui Awuku is churning out wonders from plastic waste. The wastepreneur built a Christmas tree from plastic bottles, makes dustbins, sandals and other artifacts strictly from waste.
While we’re busy soundly sleeping, recycling and upcycling are going on in many pockets and saving the African environment. As World Bank has said that the 62 million tons of waste generated in Africa per year is going to double by 2025, the likes of Andrew Mupuya, Lorna Rutto, and Bilikiss Adebiyi Abiola are turning the million tons of waste into millions of cash, perhaps also hoping to double their own revenues by 2025, or sooner.
Uganda’s Andrew Mupuya, around the period the country’s government wanted to ban plastic bag use, started producing paper bags from waste. While earning the moniker Paper Bag Emperor for himself, the entrepreneur produces 20,000 of these items weekly, employs 20 people and has a clientele of more than 70 consistent customers. Even more, he took home USD 30 K as the winner of the Anzisha Prize for African innovation in the wake of social challenges.
Lorna Rutto collects Kenya’s plastic waste and manufactures commercially viable, highly durable and environment-friendly fencing posts across the country. These posts are used in houses and forest reserves, and the use of a 20-ton approximate of plastic waste to make tree-saving products has made the young lady create more than 300 jobs. Today, her company boasts as much as USD 150 K in annual revenue. As for Abiola, she is the co-founder of WeCylers, a Nigerian social enterprise that uses low-cost cargo bicycles to provide convenient waste collection and recycling services to households across Lagos and Nigeria.
Affordable Real Estate
Africa is in the thick of the world’s rural-to-urban migration as has been noticed over the past few decades.
In the search for greener pastures and in the bid to join the moving train of civilization, Africans are leaving their villages and looking to start life in urbanities.
It is projected that by 2030, up to 50 percent of Africa’s populace would be living in towns and cities. Despite the fact that we are aiming for an all-round developed continent; where nooks and crannies are impacted by innovation and development, urbanization is a great thing.
The question is now is: where will these people live? Will they hang from trees or take up residence beneath bridges? And should the government try to intervene, they possibly cannot build homes at the required pace to meet the real estate demands of the teeming migrators. This is where a solution comes in, and before we could say ‘Jack,’ African enterprises are already raking revenues from urban housing.
In Nigeria, which is Africa’s most populous nation, the housing deficit is estimated at 20 million homes, which is the reason the world’s richest black man, Aliko Dangote has expanded his cement production presence across many countries in the continent. His strides in the cement industry are in an effort to provide building materials which now accounts for a significant portion of his net worth.
But more than conventional accommodation is an interesting trend which entails homes being built from cheap and durable alternatives such as shipping containers. In South Africa where the housing deficit stands at 2.3 million homes, Cape Town-based building contractor Berman-Kalil offers sustainable and affordable housing options which are contrived by converting shipping containers into remarkably creative residential and office accommodation, doing so at half the price of contemporary housing costs. In Kenya, Denise Majani is also tackling the same problem in the same way.
As for money raised by real estate startups to combat housing problems in Africa, there is a numerousness of them. Egypt’s iCommunity raised USD 600 K Series A from Algebra Ventures in October, S.A’s HouseME landed a multimillion-rand deal this December and Egypt’s Aqarmap secured investments from a trio of investors in September among others. Investors have shown real interest in Africa’s housing developments as they have focused on the elite premium segment of the market.
Food and Agriculture
Image credit: Agribusiness
Based on how extensively informative this article is, you may have gone to your fridge to grab a snack. While that is entirely normal, it yet buttresses the inoffensive fact that the continent is filled with hungry people.
No matter what, we will always eat. Across the world, agriculture is big business, and most farmers are financially well-off. According to the United Nations, Africa’s agribusiness industry is expected to be worth USD 1 Tn by 2013. Being that the continent has a vast domestic market, owns some 60 percent of the world’s unused arable land, with abundant labor sources and a favorable climate in most parts, the projection makes complete sense.
African entrepreneurs may not be cashing in so big on this yet because the continent still spends more than USD 30 Bn on annual food imports. A massive chunk of the challenge is that the more substantial part of Africa’s food is being produced by rural-based smallholder farmers who use crude implements and have limited access to substantial capital.
But that is not the end of the road for the African food business, because there’s such a thing known as crowdfarming. It is the term used to describe a situation where different people pool funds together, invest in these rural farmers and take shares of the profits at harvest time. That is a significant boost for food production, and it would as well cut down Africa’s food import bill while making more money for both the investors and farmers.
This transforming trend is what agritechs such as FarmCrowdy and ThriveAgric are capitalizing on to enable working-class and even the average Nigerian crowd-sponsor farming projects and earn a share as ROI come harvest time. FarmCrowdy raised USD 1 Mn last year from United States investors to expand its operations.
Ari.Farm in Somalia is doing the same thing by creating an online marketplace and crowdfarming platform that makes it easy for investors from across the world to play in the Somali livestock market.
In South Africa, Livestock Wealth helps investors own pregnant cows and track them through a mobile application. When the birthed calf reaches seven months, it is sold to a feedlot or slaughterhouse and the proceed from the beef belongs to the investor. This December, Kenya’s Twiga Food secured investment worth 10 Mn to scale its operations. As Africa’s population doubles over the next 3 decades, agribusiness opportunities multiply alongside, and a league of millionaires is likely to be produced from the continent’s agribusiness industry.
image courtesy: Michigan State University Online
Being that the future of Africa majorly lies in the cities, it’s probably safe to say that by 2030 up to half of the continent’s 1.4 billion people would be dwelling in the urbanites.
There are currently around 60 cities on the continent, each with a population of well over 1 million. Lagos alone is occupied by 21 million inhabitants, Kinshasa has 11 million and 19.5 million roam Cairo – these three cities are at the top of the African cities’ population pack.
With these swarms of people, which will likely double by 2030, one of the most serious challenges – which appears to be developing into an unnatural disaster – is congestion. Most African cities don’t yet have adequately diversified transportation systems, which makes going around towns for business and many other things hectic, and in some cases, a very frustrating endeavor. This makes up a load of logistics nightmare frustrating consumers and entrepreneurs alike, and that is why – thankfully – some African enterprises are already ‘getting their gear on’ to tackle this problem.
In Kenya, a startup known as Twiga Foods is leveraging technology to pool orders from a several of urban retailers, advertently saving them the stress of going to the market – by delivering these food items to their doorsteps. Twiga is now the largest distributor of a variety of basic food staples in Kenya, having raised USD 10.3 Mn in 2017 from international investors and secured USD 2 Mn in grants from USAID and the GSMA.
This December, the company raised USD 10 Mn from a round led by The World Bank’s International Finance Corporation (IFC), TLcom and the Global Agriculture and Food Security Program. The startup was founded in 2014 by Grant Brooke to link smallholder farmers in rural Kenya to informal vendors in cities, ordering fresh produce from farmers across the country at competitive prices. In Nigeria, MAX is tackling the same congestion problem in a different way – providing last-mile delivery services and on-demand motorcycle courier services for clients who have critical deliveries in need of beating the notorious Lagos traffic.
Across African cities, ride-hailing services such as Uber, Taxify, Awabike, Gokada, and Lyft are providing affordable cab pick-and-drops at different locations. More of these are surely going to emerge in the coming year, all looking to reap the fruits of Africa’s hippy cities. In December alone, Egypt’s Buseet raised a seed round extension, Nigeria’s trucking logistics startup Kobo360 raised 6 Mn, Egyptian Halan closed a Series A and Swvl scored around believed to be ‘tens of millions’. It is all in the ultimate game of cashing in on Africa’s big transport challenge, as even flying cars will soon be in the picture.
As we progress, more entrepreneurs will devise ways to outsmart the complex issues and bottlenecks in the logistics of African urbanities. In 2019, it may likely be the continent’s most promising business opportunity.
This list is –actually – endless, and it may likely continue soon. But for the meantime, African entrepreneurs should make do with these promising sectors, cash in big and send us their annual revenue reports!
Feature image courtesy: Getty Images
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