Andela’s unicorn status increases buzz around Africa’s startup scene

by MMC
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Seven unicorns and counting.

The speed at which unicorns are emerging on the African continent is a key indication that the startup scene continues to flourish, helped by the booming FinTech and e-commerce sectors and a young, tech-savvy population.

Learn more: SoftBank makes first foray into Africa with OPay investment

After payment startups Flutterwave, OPay and Wave reached “unicorn” status this year, software developer training and outsourcing company Andela is the latest Africa-focused company to join the unicorn ranks – a private company valued at over a billion dollars.

See also: Mastercard invests in Africa-focused Unicorn Jumia

This brings the total number of these disruptive companies operating in the region to seven, when Interswitch, Fawry and Jumia are added to the list. And the fact that four companies have reached this coveted milestone so far this year is, by any measure, a notable achievement for a developing continent.

A global network of top remote talent

Andela announcement On Wednesday, September 29, it raised $200 million in a new funding round that values ​​the company at $1.5 billion, an important milestone for the Nigerian startup launched in 2014.

The round was led by SoftBank Vision Fund 2, a $30 billion venture capital fund that is part of Japan’s SoftBank Group. Existing investors who participated in the round included former US Vice President Al Gore’s Generation Investment Management, Chan Zuckerberg Initiative and Spark Capital, as well as new investor Whale Rock.

With more than 300 employees worldwide, the seven-year-old startup has a 96% job placement rate, connecting some of the world’s largest technology companies with the best remote technical talent around the world.

Commenting on the milestone financing, CEO and co-founder of Andela Jeremy Johnson said companies building remote engineering teams have long viewed Andela as “the high-quality option” and an “obvious choice” for finding the best talent, faster.

Earlier this year, the company partnered with US cloud software giant Salesforce to train and certify developers across Africa; In line with this goal, Andela said it will use part of the funds to expand its talent offering to include new verticals such as design and data.

A magnet for venture capitalists

Funding is the lifeblood of rapid business growth, and startups able to secure venture capital funding can grow and grow at a much higher rate.

And that’s exactly what African tech startups are doing, raking in millions of dollars in investment every year. According to a study According to the Boston Consulting Group (BCG), the number of African tech startups receiving funding between 2015 and 2020 increased by 46%, almost six times faster than the global average.

And even as countries across the continent buzz with growth and investment, Africa’s largest economy, Nigeria, remains the undisputed leader.

Five of the unicorns – Flutterwave, Interswitch, Jumia and OPay and now Andela – are linked to the West African country, which is home to the largest number of startups in the African tech ecosystem, according to a recent report by fDi Intelligence, a subsidiary of the FT.

Further reading: Lack of trust and government support are key barriers to digital progress in developing markets

Earlier this month, serial entrepreneur and co-founder of Andela Iyin Aboyeji told PYMNTS that Big Tech and FinTech are driving the innovation agenda in developed markets like Africa, leading the way in how digital payments and commerce are happening.

Aboyeji, who is currently the General Partner of Future Africa, also said that payments innovation and cryptocurrencies work well together in developing markets as there is a desire to interact with the global economy, what cryptocurrencies do very well.

Related news: Crypto-based remittances are on the rise; Nigeria at the head of the African peloton

Again, Nigeria is leading the way in the use of blockchain technology on the continent, ranking third globally in terms of countries with the highest bitcoin trading volumes last year, behind states -United and Russia, according to the BBC.

Egypt, where fintech unicorn Fawry is based, is another strong contender that has attracted massive funding from venture capitalists in recent years. According to the fDi Intelligence report, the North African country has replaced South Africa as the second destination for foreign direct investment (FDI) projects in the African region, recording a 60% increase in the number of projects funded between 2018 and 2019.

Learn more: UK-based Dopay makes payroll cashless for Egyptian workers

In a recent interview with PYMNTS, CEO and Founder of dopay Frans van Eersel spoke about the changing landscape in Egypt and the huge untapped potential of the market. For its UK-based payments platform, making payroll cashless for local workers in Egypt has been key to business success.

He explained that the North African country has seen a major leap forward over the last year and that there are greater growth opportunities for companies like Dopay, which is a sign of a bright future.

The country’s central bank is also very encouraging of FinTech, he said, adding that the many innovations happening in the country’s payments landscape will eventually lead to a “complete revolution.”

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