Eric Osiakwan
Since Nairobi, Kenya was officially announced as host city for the 11th Angel Fair Africa (AFA@11), scheduled for November 7-8, 2024, some entrepreneurs and investors from neighboring African countries have wondered why and how Nairobi earned the right to host the prestigious AFA for a second time, whilst Kinshasa, Kigali, Addis Ababa and other emerging cities on the continent have never been chosen for the event.
Yes in 2016, AFA@4 was organized in Nairobi, with historic keynotes by the late tycoon Chris Kirubi, who was ranked by Forbes as the second richest man in Kenya in 2011 and the VC heavyweight Dave McClure, a former Paypal executive and founder of 500 Global. The much talked about AFA 2016 in Nairobi also featured an all-female investor panel at a time when there were noticeably few female investors. Kanini Mutooni of DRK Foundation who was on that panel has a thought leadership piece on that.
That event saw pitches from Daniel Yu of Wasoko (then Sokowatch), Sam Wanjohi of Popote, Caitlin Dolkart of Flare, Tito Munhequete of Izy Shop, Melissa McCoy of Connected Med, Joanna Bichsel of Kasha, Waweru Kuria of Inuka Pap, Ken Grifiths of Ajua (formerly mSurvey), Trevor Kimenye of Ongair, Moka Lantum of MicroClinics Technologies, to mention a few. Majority of these companies raised and have gone on to expand their ventures. Well-publicized case studies include Wasoko’s recent merger with Egypt’s MaxAB. Melissa McCoy joined Google after her Connected Med was taken over by MERCK but has recently left Google to co-found a new startup in Brazil. Moka Lantum sold MicroClinics to Huawei and used the proceeds to start CheckUPS COVA – he has grown the business into a scaleup and would be making his second debut at AFA@11 – this time in the company of his co-founder, Renee Ngamau.
Kenya has headwinds, but she also has some strong tailwinds especially when it comes to the evolution of the digital economy in Africa. In Digital Kenya, Prof. Bitange Ndemo led a team of practitioners and scholars to unearth Kenya’s quest. Since then, Kenya has ridden its tail winds (the headwinds not withstanding) to be recognized as the Silicon Savannah of Africa. In my chapter on the KINGS (Kenya, Ivory Coast, Nigeria, Ghana and South Africa) of Africa’s digital economy as part of Digital Kenya, I made the case that Kenya would lead the KINGS and that is now evident.
The overwhelming success of M-PESA by Safaricom takes the attribution for Kenya’s national cohesion with respect to the digital economy. The widespread use of M-PESA in East Africa in the early 21st century has now scaled globally as a uniquely Kenyan innovation. The phenomenal rise of M-PESA laid the foundation for subsequent innovative ventures like Cellulant which started as a mobile content business but pivoted into payments – attaining great success and scaled into 35 African countries. Cellulant has birthed about twenty plus founders who left to start their own tech ventures in the last decade. These disruptive African entrepreneurs may be referred to as the Cellulant mafia. Ushahidi, a crowd sourcing platform, is another uniquely Kenyan innovation that has scaled globally. Ushahidi has given birth to products such as Crowdmap, SwiftRiver, SMSSync, etc. The scalability of these ventures is a testament to the environment created locally in addition to the companies’ own inherent grit and the founders’ fortitude.
Chanzo Capital, which I run with my colleagues, has decided to focus the next decade on scaleups – via taking high-powered tech ventures that are operating in one country and expanding them into multiple African markets. It became apparent to us that Kenya is the right market to carry out this experiment. Coincidentally, Centum, the leading investment firm in the region had created the Two Rivers International Finance and Innovation Center (TRIFIC) – a special economic zone focused on services and innovation. This special economic zone has created the framework and developed incentives like reduced tax, one-stop-access to government services and a nurturing environment to export innovation through their Innovation Hub.
This is the exact environment we need to put our thesis to work so in the second quarter of 2024, we partnered with Onespace – a leading provider of office space and admin services at TRFIC to launch the Chanzo Onespace Startup and Scaleup Accelerator (COSSA). With this accelerator, we are going to actualize our hypothesis that for companies to scale, they need a combination of Capital, Capacity and Community. Capital alone is not enough and so is Capacity and Community but the right mixture of these three resources could work magic for businesses that are looking to scale.
Capital is needed to take care of the capex and to some extent the opex of any business that is scaling. In the same vein, one needs to build the capacity of the business to scale. It is next to impossible to scale a business into multiple countries using the same capacity it is operating with in one country. And when the business launches into the next market (after getting the required capital and building its capacity), it needs to be connected to the business community in the new markets to minimize the risk of operating alone in the new space – a recipe for failure.
From its growing portfolio, Chanzo Capital has selected three Kenyan scaleups as the first COSSA cohort namely; SaveApp led by Aziz Omar, AtLarge Innovation (Popote) led by Sam Wanjohi and CheckUPS COVA led by Moka Lantum and Renee Ngamau.
In collaboration with local partner ASSL, COSSA is taking the potentially disruptive firms through a structured capacity-building program to prepare them to pitch on the second day of the 11th Angel Fair Africa focused on scaleups, where they seek to raise the requisite capital for expansion. Leveraging its extensive business network and access to strategic firms and capital in thirty-two African markets, COSSA would connect the young and ambitious companies with the business community in the respective countries into which they plan to expand. Kenya’s Silicon Savannah is priming itself as a destination for scaleups in Africa.
