A Subsequent Wave of 2023’s Subsequent Waves

Hey good friend!

Thanks for sticking with the Subsequent Wave group all through the perma-crisis of this yr. We revealed 51 Subsequent Wave editions this yr. Within the second half of the yr Joseph Olaoluwa and Kenn Abuya, each senior reporters at TechCabal, joined me to jot down these Sunday letters, and we crossed the 50,000 subscribers mark.

A few of you wrote to inform us what you favored about specific Subsequent Wave editions. Some wrote virtually full-length replies with recommendations, questions, and extra perception. We loved studying your ideas. Understanding you learn this article makes it worthwhile!

2023 has been a yr of maturing for everybody who’s a part of the progress of Africa’s know-how and enterprise capital business. And there was no lack of schadenfreude or “I informed you so”. To wrap up this yr, we’re bringing again 5 Subsequent Wave editions which might be neither a grievance nor an I informed you so.

Pleased re-reading! 🤗

1. A contemporary retail wave is increase throughout Africa

Certainly one of our lengthy reads this yr was this piece about how supermarkets and small malls are arising throughout components of Africa and main within the formalisation of the retail enterprise on the continent. I wrote: “Small-scale fashionable retail in Africa is not going to fully exchange open markets in Lagos, souks in Cairo, or storied markets like Karatina in central Kenya. However a delicate shift that may turn into a serious marker of African retail is underway.”

Africa’s Coming Retail Revolution was written in the midst of September. Two months later in November, the Economist revealed Africa’s Supermarket Revolution. It felt good to be forward

2. The laborious limits of retail digitalisation in Africa

Early within the yr, our mates at DFS Lab contributed this gem on why digitising Africa’s huge retail sector is more durable than most individuals anticipate. As we’ve seen from information protection on the topic, this essay has borne itself out.

“When you consider acquisition and distribution prices, these fashions break and are compelled again to serving these dwelling on $10/day or extra, that are solely 5% of the continent’s inhabitants,” Chernay Johnson former director of analysis, DFS Lab, wrote. “Until you’re capable of essentially innovate round your price construction, B2C market fashions promoting meals and requirements probably break beneath this logic.”

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3. The psychological value of being a founder

Entrepreneuring in Africa will take a toll on the well being of the individuals courageous sufficient to aim it. Bodily well being issues are dangerous sufficient, however the unseen psychological scrimmage that early-stage entrepreneurs face every day might be extra paralysing.

In a yr the place well-funded firms have fallen aside as a consequence of mismanagement, outright fraud, an incapability to boost funding, and even management fights, Joseph Olaoluwa reminded us that tech bros and sisters are human beings too.

4. What has $15 billion of investments in African startups taught buyers?

Within the final eight years, African startups have obtained no less than $15 billion in enterprise capital investments. Briter Intelligence knowledge places this determine at $20 billion since 2013. When danger cash is invested we’re alleged to study what works, what doesn’t work and the way to create outsize returns in a market system. Outsize returns don’t solely need to be capital features, though that’s fascinating and the first motivation in lots of circumstances. However the perfect metric to measure outsize returns is the social affect of a enterprise, in a market system.

Twenty years in the past, we noticed the cell revolution take off and create a sea change by facilitating communications. As we method the primary decade of institutional enterprise capital in Africa, we have to discover the boldness to share knowledge, information and classes.

5. Is francophone Africa taking the stage?

In 2021, Wave, a fintech based in Senegal grew to become the primary $1 billion+ firm in Senegal, and the primary to emerge outdoors of the Large 4—Nigeria, South Africa, Egypt and Kenya. Three of the Large 4 have the English language as one of many languages utilized in official paperwork in enterprise, usually. So when Wave raised a $200 million warfare chest, it was assured to get consideration.

If any African firm raises $200 million, it’s large information. However buyers, together with the IFC, placing $200 million into an organization in Senegal has arguably performed, for francophone Africa, one thing akin to what Stripe’s acquisition of Paystack in 2020 did for Nigeria. It put a highlight on the largely unheard progress of know-how within the area. Individuals sat up and took discover.

Bonus

• This overview sequence of the tech ambition and alternative in Tunisia, Mauritius, Rwanda, Ethiopia and Kenya.
• And this essay on how to sell the “Invest in Africa Message”.

Companion Content material:
WeTech, the group for girls in Nigeria’s tech ecosystem hosted their first convention earlier this month. Here’s what it was all about.

You may as well browse the complete archive of 2023 Next Waves. Do tell us which Subsequent Wave version was your favorite?

Pleased holidays!

Abraham Augustine, for group Subsequent Wave

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