Africa’s Tech Leaders Turn From Startups To Factory Floors

A unique USD 100 M philanthropic fund, backed by some of Africa’s most consequential tech founders, is betting that the continent’s startup economy has missed the trick chasing funding rounds instead of factory floors.

The Africa Jobs Fund (AJF), launched today by Wasoko founder Daniel Yu and counting Andela and Flutterwave co-founder Iyin Aboyeji among its senior advisors, is targeting large-scale formal job creation, a problem that venture capital has largely sidestepped.

“Persistent poverty is at its core a jobs problem,” Yu said. “Those same people, in the right job at home or abroad, could earn significant multiples of their income. AJF exists to back the companies that create those jobs and opportunities.”

Sub-Saharan Africa adds 15.4 million people to its labour force every year but creates only about 3 million formal jobs. By 2040, approximately 600 million of the world’s extreme poor are expected to reside on the continent. Meanwhile, nearly 9 in 10 workers remain in informal employment, such as street vending, gig work, and subsistence farming, with little income growth or social protection.

AJF’s thesis is deliberately targeting export manufacturing and international labour mobility, two sectors that have historically lifted countries out of poverty.

The logic is that a worker moving from subsistence agriculture to a factory job can increase productivity fivefold. The same worker securing a care or logistics role in a high-income country can see their annual income jump from roughly USD 2 K to USD 40 K or more. Yet these pathways remain blocked by high setup costs for pioneer manufacturers and predatory recruitment fees for migrant workers.

AJF aims to mobilise USD 100 M over five years to de-risk early-stage companies in both sectors with the goal of generating USD 50 B in cumulative income gains for African workers and doubling the lifetime earnings of at least 250,000 low-income individuals.

Unlike a traditional VC fund, AJF is a program of Renaissance Philanthropy, the nonprofit founded by former White House science advisors Tom Kalil and Kumar Garg, and includes former USAID Administrator Samantha Power as a senior advisor. With a focus on venture-style execution for social good, the fund aims to “bet early and activate the founders who can act on that thesis,” as Garg put it.

Yu, who built Wasoko into a B2B e-commerce platform serving over 150,000 informal retailers, said his experience taught him that “traditional businesses can be just as impactful — maybe even more so — than glitzy tech startups”.

This new chapter was signalled eight months ago when Yu announced he was stepping back from daily operations at Wasoko after the company’s merger with MaxAB. At the time, Yu said he was moving to India to focus on personal projects, including his role as board chair of Malengo, a nonprofit that facilitates international educational migration. His experience at Malengo, which helps low-income students move to Germany for university and work, directly influenced AJF’s labour mobility pillar.

Yu is not going it alone. The fund has recruited Ben Hyman, founder of the African recruitment firm Talent Safari, as Operating Partner.

Aboyeji, who has since pivoted to his own job-focused venture called Learn2Earn, a tuition-free, stipend-supported, 24-month programme that guarantees jobs for elite software engineers, struck a similar note having been tapped as an advisor. “African founders have shown they can build category-defining companies. The next decade is about building the ones that put millions of people to work,” he said.

A decade of venture capital has produced nine African unicorns and attracted billions in funding. But those companies, for all their innovation, have not moved the needle on mass employment. AJF represents a recognition that solving poverty may require less disruption and more manufacturing.