After a board meltdown that shook Kenya’s first cloud infrastructure startup Angani, its former CEO Phares Kariuki and CTO Brian Muita are returning with a new venture within the cloud computing space.
The Angani saga, as it came to be known, brought the relationship between founders and investors to the fore. When startups take funding, they often have to cede some control and equity in their startups. While this is standard practice, the situation at Angani is an example of when founders and investors disagree.
One of the outcomes from the Angani saga was a round table where Kenya’s tech community gathered to discuss what the fallout from the Angani situation meant for the country’s technology startups and the industry as a whole.
Startups like Angani often start out with nothing more than barebones equipment and a game-changing idea. They are often financed with savings and borrowed money, leaving the founders in debt. Once the idea takes off, investors come in and the small venture can outgrow its initial constraints. This growth alters the fundamental nature of the business, however, and the founders can find themselves with more than they can handle.
It is at this point that startups need to read through the clauses in investment agreements to determine what exactly will happen to their startups once they take external funding. They need to put safeguards in, while at the same time ensuring that investors get value for their money.
Word of the development first came to the public eye via a Techweez Forum thread, which captured a Twitter conversation in the fallout following the Angani saga.
After Phares and Brian left Angani, they were approached by Erin Smith, an angel investor who has previously invested in payments platform PesaPal.
I am an investor @PesaPal and starting new digital biz need you @kaboro life after #Angani lets do it right together
— erin smith (@tecknomama) November 25, 2015
Soon after, Phares announced that he was working on a new project.
Life moves on, working on a new project
— Phares Kariuki (@kaboro) November 25, 2015
Node Africa, as the venture has come to be known, will focus on enterprise and retail cloud solutions. Node Africa will hit the ground running, having secured partnerships with VMware as a managed service provider, and Microsoft as a sales and service partner for Azure.
There is demand for local cloud hosting, as was demonstrated with Angani’s initial success. Some users migrated their hosted services, websites and data to Angani, although the scandal has since shaken user confidence.
A local cloud hosting and storage service would have to attract the interest of local developers and content creators, while challenging the likes of Amazon and other established players in the cloud computing industry. Node Africa also has the added task of overcoming the ghosts of the Angani saga in order to achieve profitability and gain a significant market share.
It should be interesting to see how the Kenyan tech community will respond to this new venture.
Node Africa will be launched later this month.