Startups solve Africa's fundamental challenges and their future

Introduction

In my last blog, I blogged about a national survival strategy that doesn't have a large market in its own country. One of the reasons why each country's market is not significant is its population. For example, Estonia has a population of 1.3 million. The population of the city is about the same as only one-tenth that of Tokyo.

It is clear that the population is a force and an essential factor in driving economic growth. Ex. China, India, and Indonesia.

Because of the proximity to Japan, information about these countries can be relatively easy to hear, but the growing population of Africa, the last untapped market, is honestly not well known in Japan.

So, I visited Africa for about three weeks and talked with people who are active there. In this post I would like to share some of the learnings from the "now" of Africa that I have actually visited and felt.

Startups in Africa

In the first place, what is the image that comes to mind when you see the five letters "Africa"?

The photo shows the animals in Nairobi Park where I've been. There are some great places that are full of such nature. But more than that, what was personally fascinating to me were the people at the startups.

Being a developing country, there are many challenges within each African country. And because the country has not yet solved this problem, they are unable to receive the public services that are commonplace in developed countries. And it's the startups that are meeting those challenges. It was really fascinating to see startups solving fundamental challenges and making a huge impact on society. I'd like to introduce some of the startups I've actually met on the ground.

Flare makes 'ambulances save lives' a reality

How do I call for an ambulance in the event of an accident?

You can push 911 in the US (119 in Japan). That way, they'll get an ambulance that will be the first to come to you.

In Nairobi, Kenya, the situation is quite different.

Surprisingly, you have to call every single one of the nearby hospitals yourself to call an ambulance. You don't have time to call every single one of them in an emergency, and you might not even know the number of the nearest hospital. There's no room for complicated things, especially if you have an injury. The average time from the time of the accident to the arrival of the ambulance is about three hours. If it takes this long, it may not save your life if you are severely damaged.

The solution to this problem is "rescue.co," a service provided by a company called Flare, founded by two women entrepreneurs, that offers optimal Uber-like dispatch for ambulances.

In the event of an accident, rescue.co can help you find and arrange the best ambulance to get to the place of the accident the fastest and save your life.

This service is not an NPO or NGO activity, but a product provided by a startup. The business model is a subscription. Uber, Bolt, and other car dispatch services are active in Nairobi, but the number of road accidents is not low. This service is used to prevent them from losing their lives, and as a benefits subscription service for them, it is increasing sales.

In developed countries, this type of service is run by each country, but there are still many challenges in Africa. The number and size of challenges is an opportunity for startups. Once you solve fundamental problems, you can be an infrastructure for people's life, like Flare.

Access Afya creates a community with 'access' to healthcare

Next is Access Afya, a startup that runs a clinic in a slum. Healthcare in Africa has so many challenges. In fact, it is not only the lack of doctors and medicines but also the lack of proper medical care in the slums, which can lead to worsening of symptoms and death due to wrong treatment and diagnosis. The solution to this challenge is Access Afya.

Access Afya is cheaper than the existing clinics and offers the right treatment at the same time. The company has also computerized all of the patient's medical records and kept data that shows the actual condition of patients in the slums, which had been invisible until now. In addition, They have begun to develop projects with pharmaceutical and medical device manufacturers who are attracted to it.

Besides, what is unique about Access Afya is that it creates and operates a community that cares for its patients despite being a slum. Specifically, they have hired local community managers who regularly monitor their health and follow up on post-diagnosis symptoms via SMS and other ways. I actually went there and was surprised when I saw the clinic suddenly appear in the middle of the slum.

And the Access Afya logo was painted on the wall of the house near this clinic. It's not just a clinic; it's a community with access to health care that locals adore.

Rwanda aims to solve problems with startups

The two startups above are focusing on Kenya for their services. Africa is a vast continent with 54 countries and ethnic groups with various cultures. One such country is Rwanda, which has an entirely unique approach. The country is very open to new initiatives, both domestic and foreign, and is very committed to IT.

The hackathon was held in the same building as the company I visited on the first day, and there was also a conference at the convention center where IT companies gathered, so I could feel that this country is putting a lot of effort into IT. To be honest, I never imagined I'd see such a scene in Africa at first.

One company that has taken advantage of this government attitude towards IT to become a unicorn company is Zipline, which raised $190M in May 2019. Its valuation was over $1B. It isn't easy to transport blood products for transfusion in a short time in a country like Rwanda, where the infrastructure is not well developed. That's why Zipline is working to solve this problem by using drones to deliver blood products to hospitals. In some cases, deliveries that used to take four hours by motorbike have been reduced to tens of minutes by Zipline's drones.

In developed countries such as the US, it was impossible to use drones to transport blood products for transfusion due to regulations. However, as a country, Rwanda is flexible in its rules, working with startups to create institutions and use technology to make the country a better place.

Zipline is beginning to expand into Ghana in April 2019. This would be a good example of a startup that took a progressive initiative within Rwanda and took the results to another country.

Nigeria, The largest market in Africa

Nigeria's population is already 200 million. It ranks 7th in the country in terms of the mobile internet population. And the future GDP projections for 2050 by PwC's study show a massive growth of 8th in the world. It's promising. The Nigerian-born startup, which is also a graduate of Y Combinator Fintech company Flutterwave has partnered with Alibaba. It is strengthening its presence in global.

I could not visit during our trip around the world due to visa reasons, but I wanted to visit Africa's largest market. I wanted to see Nigeria with my own eyes, so I revisited Africa after my round-the-world trip. I had the pleasure of spending time with lots of Nigeria's amazing entrepreneurs.

Let me introduce you to one of those startups, MVXchange.

In Nigeria, the foreign exchange market is dependent on the oil sector, which accounts for 95% of exports and 80% of the country's revenue. Every day, many ships carry fracked oil from offshore oil fields as a source of export, and this is where the MVXchange has turned its attention.

Until now, the booking process for chartered vessels and ocean freight has been inefficient. Specifically, negotiations have taken place over the phone and face-to-face, and the presence of middlemen has caused unnecessary costs to be incurred.

So MVXchange provided a B2B cloud-based platform to the industry. It is directly matching the supply of ships with the demand for logistics and transportation services in the maritime trade. It makes an enormous impact on the industry by allowing them to optimize their processes. The business model is a fee-for-match model on the platform. Many users have already accepted because they can cut costs by saving time in finding the best ship and eliminating the middleman.

Additionally, CEO Tonye (pictured far left) is wonderfully ambitious. He has moved from the optimal matching platform for shipping goods by ship to land as a logistics. They're trying to provide service all the way through.

I got to meet a lot of great people in addition to Tonye there. Here's what I tweeted about on my last day in Lagos

Startups solve Africa's fundamental challenges

Someone says, "Isn't that what the country should deal with these problems?" However, instead of it, many startups are solving these fundamental challenges in Africa.

As I mentioned at the beginning, these startups were really attractive. The businesses created by startups are changing people's lives and having a substantial social impact. Its huge social impact has given entrepreneurs a strong sense of fulfillment and has attracted many entrepreneurs.

Is there a chance for Africa as a market?

(You can see the detail here)

As I said at the outset, the population is a force and an important factor in driving economic growth. As can be read from the figure, similar trends are found across Africa, including Tanzania and Uganda. According to the United Nations World Population Projection 2019, the population of sub-Saharan Africa is expected to double (99%) by 2050.

Africa is now experiencing an influx of technology from a truly underdeveloped state of infrastructure. We will see more and more of this as startups solve fundamental challenges, and startups themselves become the infrastructure of life.

Deep Appreciation and Next

To be honest, Africa was more exciting than I expected before my visit. This time, too, I had the opportunity to meet people who are already very active in the startup field, and I was able to make a fulfilling visit. Thank you again to everyone who has been involved.

I'm now staying in Colombia, South America. In Latin America, where SoftBank has established the $5 billion SoftBank Innovation Fund to invest in companies in South America and Mexico, such as Brazil and Argentina, and where it is pouring its attention, there are unique markets, cultures, and startups that have a different appeal from those in Africa.

After a few more trips around Central and South America, I'll be heading to North America. I will visit New York, where there are startups that are slightly different from the Bay Area. And will go to Seattle, where MS and Amazon are headquartered, and Toronto, Canada, where AI research is flourishing. I can't wait to get my hands on the latest technology!

By the way, people I've met have asked me "Where you're going next. You're going to tell me an update!" So I made an English twitter account, and sometimes I'll tweet. If you have any requests or impressions, I'd be happy to have you on Twitter to motivate me to write the next post.

So, I will continue to learn in the next country! 💪