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A TechCabal roundup of the
impact of the coronavirus pandemic
on tech & innovation in Africa

MARCH 29, 2020
This newsletter is a weekly special focused on the effect of the novel coronavirus, COVID-19 on African tech and innovation ecosystems. Subscribe here to get it directly in your inbox every Sunday at 3 pm WAT.

Hello,

Since Africa’s first coronavirus case was reported in Egypt Valentine’s Day 2020, numbers have skyrocketed. At press time, there are 4,080 confirmed cases in Africa, out of this number, 117 are dead and 249 recovered. 

With economic repercussions currently rippling across the continent as businesses feel the burn of a global crunch from this black swan event, technology and innovation ecosystems across Africa are not spared.

In the past weeks, how have startups and players in these ecosystems responded to the global pandemic?

WHAT’S HAPPENING

Coronavirus and ride-hailing companies.

Ride-hailing startups across Africa have slowly begun to feel the effects of the pandemic. This weekend, Uber Kenya suspended night pickups due to a national curfew imposed by the government. 

The ride-hailing giant suspended rides in Nairobi and Mombassa between 6 pm and 5 am daily and this could be challenging for its business in Kenya.

In 2017, it announced that its most popular request time in Kenya was Friday 8:00pm. With many people staying home, the pandemic will significantly reduce the number of rides completed the longer it lasts.

Uber’s most popular request time in Kenya is Friday 8:00 pm. Source: Uber (2017)

Per its last public figures, Uber had 363,000 active riders and 5,000 drivers in Kenya, its most important market in East Africa. Kenya is arguably Uber’s largest market in Sub-saharan Africa, only after South Africa.

Uber is not the first ride-hailing app forced to make critical changes in Africa due to coronavirus. Some weeks ago, French ride-hailing company, Heetch reportedly suspended operations in Cameroon. The company announced that the pandemic back home in France made it reconsider its priorities which meant shutting down in a number of countries. Heetch raised $38 million in May 2019 to take on Uber in francophone Africa.

There are no less than 60 ride-hailing companies in Africa, many of whom opened in 2016 which some have called the “Year of African Ride-Hailing”. A longer lockdown will have a devastating effect on the industry.

A map of the African ride-hailing industry in 2016

Globally, ride-hailing has experienced a downturn as coronavirus hit harder. Uber’s CEO Dara Khosrowshahi said at its last investors’ call that ride volume has gone down by 70% in hardest-hit cities. One American driver told CNBC that his ride-hailing income has gone from $600 every week to $0. Uber shut down some of its services including Uber Pool to stop the spread of the virus. It is now looking to focus on Uber Health to deliver medical supplies. The ride-hailing giant could make a similar move across its African markets.

While Bolt (previously Taxify), Uber’s biggest competitor regionally hasn’t made a major announcement about changes in its African market, it issued precautions to its drivers globally, earlier this month. In the UK, it suspended the accounts of infected drivers just like Uber and is paying them a sick pay after initially saying it wouldn’t.

Bolt (Taxify) is Uber’s biggest competitor in Sub-saharan Africa. Source: Enterprise (2018)

To cushion the impact of the pandemic, Uber could look to its delivery business, Uber Eats in Kenya. As more people shift to online services and e-commerce companies for essential products, demand for delivery services could go up. But economic issues could dash that hope as disposable income disappears for many people.

FROM THE CABAL
TechCabal takes the coronavirus fight a step further.

Beyond providing proactive information, and analysis on the epidemic, we are providing data from our “The State of Health Tech in Nigeria“ report.  In Nigeria, the 81 confirmed cases are most likely grossly underreported for a lack of testing capacity. And we believe this free dataset will help identify players for collaboration and impact.

As the world grinds to a  halt, some African startups are weathering the storm and innovating. As expected, most are from the telemedicine and primary healthcare sectors. There are also startups in e-commerce, delivery and logistics.

Two  African biotech companies, Koniku and 54Gene, are in the news for good. The latter has raised $500,000 to ramp up testing in Nigeria by about 1,000 per day. Meanwhile, Koniku’s Konikore device is merging genetically modified brain cells and traditional silicon to revolutionise disease testing globally.

Learning will go on. Regardless of isolation rules, these schools in Nigeria are leveraging edtech tools to keep classes going in what is likely going to become a norm across Africa in the coming days. Also, with looming timelines, physical tech talent accelerators are facing trying times and may have to temporarily tweak models to stay afloat.

Ecommerce startups in South Africa are experiencing an uncomfortable surge in patronage. As quarantine and self-isolation measures are enforced, people are forced to shop online. In South Africa, orders on e-commerce platforms have quadrupled over the last week, and while learning that there is such a thing as too much business, these startups are creatively adjusting with new methods, adjusted business models and new hires.

NEWS FORM AROUND THE WORLD
WhatsApp has seen a 40% increase in usage as people stay at home.

Research company, Kantar released a report showing an increase in the usage of social media apps. The report says WhatsApp, Facebook and Instagram have all experienced a 40%+ increase in usage from under-35-year-olds.

In the US, the FDA has approved a 5-minute test kit for COVID-19. The test device, ID NOW from the medical device company Abbot is tiny and does not need to be sent back to a lab for analysis. This is the second point-of-care test device approved by the FDA and a big improvement from the first: a  45-minute kit from biotech company Cephid. Report says as early as next week, Abbot will begin shipping 50,000 units daily.

WHAT WE ARE READING

How 3D Printing can save the world.

From nasal swabs to ventilators parts, manufacturers in the US are pooling resources and collaborating in an exemplary move, to  3D-print much-needed resources for hospitals. In the MIT Technology Review, James Temple reports on these collaborative efforts. 

COVID-19: There is over $14.5 billion in capital relief available – can you find it fast enough? This is a resource that helps entrepreneurs find the funds backing COVID-19 solutions.

Best Wishes for a Great Week

Remember to wash your hands, and stay at home, pretty please.

You can subscribe to our TC Daily Newsletter; the most comprehensive roundup of technology news on the continent, and have it delivered to your inbox every weekday at 7 am WAT.

Follow TechCabal on Twitter, Instagram, Facebook, and LinkedIn to stay updated on tech and innovation in Africa.

Victor Ekwealor, Managing Editor, TechCabal

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