How Do You Say Unicorn In Your Language?

This article first appeared on LinkedIn, follow me there.  

Earlier this week I attended a talk on the 4th Industrial Revolution and as expected, some of the usual buzzwords were thrown around, including “this could be the first African unicorn”. To date, American and Chinese startups have dominated the unicorn rankings with India a distant third, however, there is yet to be a unicorn from Central and South America or Africa. Chances are the world will not see an African unicorn anytime soon and here is why.

A time before unicorns

Before getting to the impossibility of the existence of an African unicorn, nevermind a decacorn or hectacorn, a little history. In 1999 VeriSign bought South African internet certification firm Thawte Consulting for $575 million, at the time some believed VeriSign had grossly overpaid for a company that few outside the tech sector had ever heard of. Turns out Thawte was VeriSign’s biggest and only competitor as a digital internet certificate provider and acquisition made more sense for both companies rather than competition, VeriSign also took into account Thawte’s future revenues in it’s valuation. At the time Thawte founder and then 26 year old Mark Shuttleworthe was quoted as saying the sale was the best way for his company to unlock it’s value. This begs the question, if Shuttleworth had held on for a few more years could Thawte Consulting have been Africa’s first unicorn?

..could Thawte Consulting have been Africa’s first unicorn?

South African founded Dimension Data, or DiData, as it later came to be known, was Africa’s first breakout tech star. Listing on the Johannesburg Stock Exchange in July 1987 for a modest 150 cents a share and raising R7,5 million, DiData went on to list on the London Stock Exchange in 2000 raising over $1,5 billion. The dotcom crash of the early 2000s was not kind to DiData seeing its share fall from R70 in late 2000 to less than R2 in 2003. Though they did ride out the storm and manage to rebuild, DiData were eventually sold to Japan’s NTT Dokomo in 2010 bringing an end to an era in African tech companies. Whilst being founded in Africa, DiData does not qualify as a unicorn, they’re 1987 IPO barely raised $1 million.

Follow the money

Since then, a number of tech startups have emerged across the continent garnering significant interest, notables include Nigeria’s Andela, online retailer Jumia which now spans from West to East Africa and a slew of fintech startups. It is amongst fintech startups that much of the hype around Africa’s first Unicorn is focused. Flutterwave, billed as the next big thing in payment platforms raised $10 million this July in Series A funding led by Silicon Valley venture capital funds Greycroft and Green Visor Capital, to put this in context, between January 2015 and August 2017 African fintech startups raised just over $100 million in funding. Also in July, Andela raised $40 million in Series C funding led by African venture capital firm CRE Venture Capital to bring it’s total funding to date to $80 million. Now, whilst these are not numbers to be sniffed at, they’re not exactly shooting the lights out when compared to what is required to even have a chance of achieving unicorn status.

between January 2015 and August 2017 African fintech startups raised just over $100 million in funding

Much of this startup funding originates outside of Africa which presents entrepreneurs with a number of problems not least of which is competing for the attention of a small investor base. Whilst, as will be explained in the next paragraph, Africa has significant private and public cash reserves, the appetite for tech investment is simply not there. On a continent where spending on telecoms is still seen as a nice to have, spending on basic infrastructure and poverty alleviation takes the bulk of public investment funds and tech is barely a consideration, if at all. This disconnect sees businesses across sectors looking offshore for funding even from inception. Ironically, technological advancement is partly to blame for this as the growth in mobile money in Africa races ahead of traditional banking.

Unlike in the United States, Africa has incredibly limited financial resources to direct towards new industries and with a financial sector dominated by global players who have other priorities besides the continent, talent and foresight are the least of our worries. In a 2017 study funded by South Africa’s Department of Trade and Industry, the University of Johannesburg found that country’s top fifty listed companies were sitting on R1,4 trillion in cash reserves as at 2016 up from R242 billion in 2005. Added to this, in 2012 South Africa allocated R827 billion to the National Infrastructure Planmeant to fund healthcare facilities, schools, water, sanitation, housing, electrification, construction of ports, roads, railway systems and electricity plants. My point, even the continent’s most developed and financially complex economy has basic priorities it has to put ahead of creating unicorns coupled with an incredibly conservative private sector when it comes to investments in general but particularly in Africa. That said, one cannot go without mentioning South African firm Optimal Energy’s attempt to build a commercially viable electric car, a valiant effort that ended in 2012 taking over R300 million of public investment funds with it.

South Africa’s top fifty listed companies were sitting on R1,4 trillion in cash reserves as at 2016 up from R242 billion in 2005. Added to this, in 2012 South Africa allocated R827 billion to the National Infrastructure Plan

Where the founders are

Last but not least, founders are exiting before they realize the full potential of their businesses because, sooner or later they figure out that nobody with the money to do it, is really willing to risk funding a potential African unicorn when they can invest that money in a Silicon Valley firm with much greater chances of success. The thing is, this becomes a self-fulfilling prophecy, if nobody is willing to put hundreds of millions into an African business then nobody will put hundreds of millions into an African business and there will be no billion dollar African startup. This has been true of Thawte Consulting, MXit, Jumia, Optimal Energy and Andela to name a few. A common thread amongst founders is that they are serial entrepreneurs who after exiting their startups have gone on to new businesses, never mind that the startups that we know them for are likely not their first businesses but just their best known. No matter where in the world you are, serial entrepreneurs are necessary for progress because economies can only grow through doing, the more we do, the more jobs we create and the more we create, the faster and more inclusive this growth will be.

A common thread amongst founders is that they are serial entrepreneurs

There is always something new out of Africa

Whilst Africa has been a leapfrogging champion, creating unicorns will not be one of those instances, much still needs to be done to deepen African economies before we can even dream of creating a conducive ecosystem. This may very well just be an exclusively American phenomenon but the news is not all bad though, the desire to create Silicon Valley clones across Africa may very well be the impetus to create something completely new that the world didn’t even know we needed.

“ex Africa semper aliquid novi”

Pliny the Elder

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Based in Johannesburg South Africa, Ricky Marima is a recovering economist and twenty year veteran of building businesses across a variety of industries. He currently works at knowledge startup RemNes where he guides clients across the continent to ask the right questions about the 4th Industrial Revolution. You can reach him on ricky@remnes.com

Cooperation Over Competition Is Africa’s Economic Future.

This article originally appeared on my LinkedIn page.

Good economic news has been in short supply for South Africa in recent months. From shocking allegations of state capture to the second cabinet reshuffle in less than two years and stagnant growth. A ratings downgrade proved inevitable in 2017 but there was a glimmer of hope with cautious reports of in September of green shoots emerging.

In continental news Egypt was named Africa’s top investment destination by RMB, knocking South Africa off the top spot for the first time in the seven years of the rating. South Africa and Nigeria continue to tussle for the title of Africa’s biggest economy but with a larger population and better overall growth prospects, the odds are in Nigeria’s favor. The news is not great either when you look at South Africa’s ranking in the 2017-18 WEF Global Competiveness Index (WEFGCI) or the World Bank’s Ease Of Doing Business Index.

This is by no means strictly a South African story, look at any African country and you will find they are struggling with at least one index or another. But what if we looked at things differently? What if instead of focusing on who is the best African country, region or city we looked at how through cooperation, African countries, regions or cities can overcome their individual weaknesses? It makes no sense for the African Union to trumpet African economic integration but in practice intra-regional cooperation has been woefully slow, for example, SADC’s intra-regional visa is still a dream after more than a decade of negotiations despite obvious economic benefits. It also makes no sense that a continent endowed with incredible resources competes for global investment and countries find themselves in a spiral to the bottom trying to attract foreign direct investment by giving up non-renewable resources that could fuel long term growth through beneficiation for immediate gain, the trade in unexploited oil blocks all along the east coast comes to mind.

Intra-Africa trade has only increased to 15% of total African trade in the period 2010-15 after languishing around 8-11% for the prior eight years due to numerous logistical and political bottlenecks. There is, however, hope that the fourth industrial revolution (4IR) will usher in ways to circumvent many of these bottlenecks as red tape lags behind technological advancements such as blockchain and industries now possible thanks to increasingly ubiquitous high speed internet. Faster internet speeds, rapidly mushrooming local content across all online platforms, increasing inward as every country has at least one international airport and growing intra-Africa travel is showing we Africans, are all the gateway to Africa. With blockchain cumbersome foreign exchange regulations that have long hindered intra-Africa trade could be a thing of the past. Couple this with high speed internet, one is now able to have cross-continental teams across all sorts of industries working simultaneously on the same project and not having to wait an eternity for payments or juggle exchange rates.

Blockages that have existed for decades are set to be overtaken by a new breed of entrepreneurs who do not see borders and lethargic legislation as they lead Africa’s resurgence. Cooperation, not traditional ideas of competition, is how Africa’s much talked about youth dividend will be realized. Rather than aspiring to be Africa’s top -insert favorite index here-, in the next thirty years national borders will give way to regional economic blocks anchored by mega-cities modeled by unique population growth, migration and urbanization patterns. Governments will focus on facilitating this cross-border entrepreneurial spirit through relevant educational systems, infrastructure development projects and meeting their developmental mandates.

The Trap Of Instant Digital Gratification.

Recently I attended a two day conference at Goethe-Institut in Johannesburg called African Futures where we spoke about aliens, comics, science fiction and the pervasiveness of social media, some of my favorite topics. It was intoxicating to hear people speak with such passion about ideas that I had previously thought too far-fetched to even conduct conversations about. There was so much to take in but weeks later, one particular talk has stuck with me, speakers were asked how they use social media in their work and the answers caused me to pause.

I spend what is probably an inordinate amount of time on social media, mostly Twitter and Instagram, but of late I have been wondering how this is shaping my worldview. Asked how he uses social media, Faustin Linyekula a choreographer from the DRC, spoke of how for him it is functional but at the same time invasive. He went on to speak of how social media forces us to live in the now, not seeing the immediate past or future, how we’ve become so transfixed on the absolute immediate present, as finite as it is. A great example of this is Twitter, where it is said 9000 tweets per second are tweeted and depending on how many people or trends you follow, your timeline can become a raging river of tweets where you can easily drown in your attempts to stay current.  In Japan in 2013 this peaked at 143199 tweets per second. This is typical of other modern media sources, constantly updating the latest news story literally by the second.

We’ve become so conditioned to seeking instant online gratification that by the time we get it we are already seeking the next new shiny thing. It is a cruel, cruel irony that in our search for instant gratification that gratification itself is nonexistent. If it did exist logic follows that once we we were satisfied we would log out until the next craving.

I realized that I was as much a perpetrator as a victim of this vice. That morning I started to think critically about just how much time I spend online and what benefit I derive from it and contribute to those I interact with. How much information am I actually consuming and what am I doing with it? What is the mental shelf-life of all this data streaming past my eyes and into my sub-conscious somewhere to be pulled out in random conversation later? Do I really need to be out here as much as I am? How much of this is me actually engaging with people for greater understanding and how much of it is me feeding my ego? Retweets and those exploding red hearts can be so addictive.

I realized I couldn’t introspect whilst remaining plugged into the machine so for the first time in years, I took a Twitter break. I spent the time reading articles and instead of tweeting out every next thought, taking the time to think that thought through. Till then I hadn’t realized just how mentally trigger-happy I had become. The whole world slowed down, the immediacy ebbed away, I started having conversations with myself again.

I really must thank my cellular service provider though, without their ridiculous data charges I might never have considered tuning out as a real option. I find tuning out is therapeutic for me, I can’t live life at the speed of the next big trend, that way of life is not great for my goal-setting. Life is more fun when you decide just how fast it comes at you.

The Law Of (Un)intended Consequences

Much has been said about South Africa’s new Immigration Law and regulations, most of it negative. As someone who has been directly affected, I have read as much on this as I can in the hope when I need to interact with the Department of Home Affairs, I am fully informed. Yesterday, I encountered the painful side of these regulations.

I am a Zimbabwean citizen and for almost two years, it’s our anniversary in a month, I have been married to my South African wife. We have been blessed with a beautiful daughter who was born at Sandton Medi-Clinic sixteen months ago today. We always joke about how we had three weddings and so three wedding anniversaries, the first in her hometown Kimberley on 21 September, the second at my home in Bulawayo on 28 December and the third on 14 February when we signed in Johannesburg. I swear the last was pure coincidence, it just happened to be the first available date and we have no photos.

With all the controversy around the new Immigration law and regulations, we decided to wait for clarity on the regulations governing the status of foreign nationals married to South African citizens. This is why three months ago I started putting together my application for a relatives’ visa as the spouse of a citizen. Amongst the requirements is a police clearance, in my case I had to get one each from South Africa and Zimbabwe. Now I’ve had what can only be termed a colourful life so I was a little nervous going into a criminal records office to voluntarily ask if they were not looking for me. Thankfully, I am a law-abiding citizen and have not one but two police clearance certificates to prove it. Both SAPS and ZRP were exemplary in assisting me.

After compiling my documents I then consulted Home Affairs via their customer careline on various aspects of the application and they were extremely helpful every time. I had some difficulty getting information out of the South African embassy in Harare where I had to submit my application and eventually just went to Harare anyway. Upon arriving there were some complications and I had to wait a week before submitting. As happens with matters of such a delicate nature, there was some back and forth but at 3:30pm yesterday my application was accepted, just in time for me to check in for my 6:00p.m. flight back to Johannesburg.

That’s when they dropped the bombshell.

My passport was required as part of my application which could not be processed without it. A process that takes eight weeks. I thought they were joking, when I realised they were serious, the ground fell out from under me. My mind fogged over, I couldn’t hear the words coming out of my mouth as the strength just left my body and I had to sit down. People were speaking around me and to me, I was responding but I can’t tell you the details of those conversations. All I could think was, what was I going to tell my wife? She was expecting me back in a few hours and now I had to tell her this? I pulled myself together and went back to the counter, just in case I had heard wrong, no, I had not. The consultant told me I could take my passport, get on my flight and come back when I was ready but my application would not be processed without it and I should choose to either spend eight weeks in Zimbabwe now, or then. I called my wife and we decided I should submit the application and we will figure out what to do.

I consider myself a pretty thorough person when it comes to perusing documents and complying with regulations, I cannot for the life of me, explain how I could have missed this most important detail, assuming at this stage, that it is indicated somewhere in the requirements I read. I remember asking if there is not some exemption from the eight weeks for those with infant children, they said no. I walked out of there broken and confused. The anger came later and passed, I knew it was not going to do anything for me but make me bitter about a situation I could do little about in the middle of the night.

I understand that Immigration have to be thorough in their processes and whilst some are tedious, I am willing to comply. Coming to Zimbabwe leaving my family behind to apply for a visa that allows me to better provide for them is that important to me. What I don’t understand is, why I must now sit in limbo away from my family for eight weeks, what purpose does this serve? Everything that matters in my life is in South Africa and I feel hurt and confused that I cannot be with them for that long, in the name of compliance. With so much that I had planned now out the window, I am seized with trying to rearrange my life around this new reality. The whole of last night my wife and I were planning how my family can come and spend time with me here, wether she can get time off work and if she should take unpaid leave. In addition to the emotional trauma of all of this we now have to go through a financial one.

I considered consulting a lawyer but I don’t know if I have the stomach for a fight with Home Affairs, my family and I have faced worse things than this and we are still here. This is not by any means to say I am not going to do anything about this but I will find a way to approach them, I know they are slow but they come around eventually. In the meantime, with the looming prospect of spending our second wedding anniversary apart, my heart breaks every time I think of my daughter and what she must be going through, earlier today when I asked after her, my wife sent me this message:

“. . . She knows you’re not here and is wondering where you are, I can see. Matilda (her nanny) says every time she hears footsteps in the corridor she runs to the door to see if they are of someone coming here.”

Zimbabwe Sees Boost In Regional Exports

Today the world woke up to the news that Zimbabwe has become a regional powerhouse in an unexpected field, load shedding. Whilst it is widely known that Zimbabwe has struggled with power generation for a number of years, it has only recently come to light that Africa’s most literate country has turned this national lemon into the proverbial lemonade.

Following a state visit to South Africa in April this year by President Mugabe, South Africa and Zimbabwe signed a variety of trade pacts. It is believed amongst these was a commitment by South Africa to increase it’s imports of load shedding from Zimbabwe by 500% phased in over 3 years to allow Zimbabwe to ramp up production. South Africa is believed to have wanted an exclusive deal but Zimbabwe resisted this siting her positions as chair of both SADC and the AU. Zimbabwe trade negotiators felt this resource must be shared with all of Africa. Unofficial sources have stated that load shedding exports to South Africa could be the economic panacea that Zimbabwe has been looking for after a similar deal with Nigeria fell through.

Zimbabwe is also a major global exporter of skilled and unskilled labour with South Africa being a major market. It is possibly the runaway success of this trade that swayed the Zuma presidency to conclude the mammoth load shedding deal.

Zimbabwe will also be ramping up exports of specialist financial services to South Africa and the greater SADC community, chief among them, currency devaluation and inflation fuelling. Early gains have already been recorded in South Africa with the ZAR now at near record levels to the currencies of western imperialist states. Inflation however, has proved to be rather stubborn and a specialist team has been seconded to Finance Minister NhlaNhla Nene from Zimbabwe’s Ministry of Finance as a matter of urgency.
Other areas where Zimbabwe has provided services to South Africa include:
Service non-delivery
Ghost worker deployment
Legislative bungling
National debt maximisation
Government Accountability reduction measures

As part of a cultural aspect Zimbabwe will also be deploying experts in historical revisionism to ensure the struggle against apartheid is forever remembered as it should be.

You’re Not From Here Are You? My migrant story.

I never meant to end up in Johannesburg but I always knew my life was not in the streets of Bulawayo. I was born with a wanderlust and for as long as I can remember being on the road has always been a source of great joy. The less planned the journey the better.

The events of the last few weeks around South Africa have touched me deeply and made me think a lot about my life, my place in this country and the world at large. Though I see myself as a global citizen, I am currently resident in a country that is in flux, leading to so many questions.

How does this affect me?

What of my family?

How will I tell our daughter why people were dying in the country of her birth whilst she was preoccupied with taking her first steps? Whilst we cut her first birthday cake last Sunday a family in Alexandra, barely ten kilometres from us, was mourning the death of a father and brother killed for being Mozambican.

I have lived in South Africa on and off since 1998 but only really returned here two years ago after a decade away. At the time I even wrote a breakup letter to the country of my birth, Zimbabwe. The only place I ever really felt at home was in Cape Town over a decade ago, this time however, I’ve come to call Johannesburg home, albeit grudgingly so. Cape Town was a great place to disappear into because one had the sense that everyone there was from somewhere else, we were all foreigners of sorts. Johannesburg, has been different, whilst I have never been a victim of outright xenophobia in my face, I have often been subtly reminded of my place here, especially online.

In response to this I guard my online conversations so as not to give life to the trolls. Whenever tweeting or writing about South Africa I am careful to never use the collective “we”. The reason being once you get under the skin of locals they will be quick to remind you, “you’re not from here though are you, so who is this we you refer to?”. This will quickly be followed by a torrent of “go back to Zimbabwe” and “ungrateful foreigner” rants. I have seen it and it’s ugly with little chance of recovery for your reputation.

I’m wary to get too deeply involved in South African discussions for fear of that comment that can instantly delegitimise me. it is always there, lurking like an axe swinging inches from one’s throat. Is that a xenophobic trait amongst South Africans? I don’t think so but I really cannot say for sure, it could be but I doubt it. I don’t know if I want to find out either, some things are best left as they are.

This detachment has left me at odds with those who advocate assimilation. Those who long ago burned their Zimbabwean documents in favour of completely embracing their new-found South Africanness. I’ve even been told to tone down my “Zimbabweaness” because I may offend the locals, difference between us is unlike some my brothers and sisters, I have no fear of being found out.

In my mind my detachment allows me a level of independence to speak, write and create in a way I would not enjoy otherwise. It still doesn’t help me figure out how I will explain this time in South Africa’s history to our daughter when she comes of age. Will we still judge each other by where we are from and what language we speak? I hope not.

An Introduction To Curating

Recently I, for lack of a better term, came out as the administrator of two social media platforms CurateZAR and CurateZIM through which I run rotating curator twitter accounts. These accounts serve as virtual listening posts to what South African and Zimbabwean twitter are talking about. CurateZAR is close to it’s hundredth week of canvassing the online views of the nation from a broad spectrum of South Africans.

CurateZIM is in it’s twentieth week and has grown rapidly in that time. It has been a remarkable ride giving new insights into what Zimbabweans from all walks of life and ages are talking about.

Recently I was interviewed by The Citizen newspaper about Curate, you can find the article here.

If you would like to find out what the fuss is all about come and join the conversations on twitter with @CurateZAR and @CurateZIM. You can also find me on @rickyemarima.