In reviewing developments in the African tech ecosystem, I’m looking for trends and new developments that will presage what the future will look like.
One can’t review 2020 without touching on the major story of the year: the coronavirus pandemic.
This affected our lives since March and sadly looks like it will continue to do so for a while.
The pandemic highlighted the advances made in biotech over the last few decades, which often doesn’t get the same coverage that digital tech advances do.
For example, Moderna designed its mRNA vaccine two days
into the epidemic. It then spent the rest of the time testing and figuring out how to produce and distribute its vaccine at scale.
There are other amazing biotechnologies like Crispr gene editing
that allow manipulation of DNA, and make the development of mRNA and similar technologies possible. I am glad to see that a few African biotech and agritech companies like 54Gene
, Biotech Africa
and Gro Intelligence
are cashing in on this trend, though I’d like to see more. This is a space to watch.
Blockchain and Crypto
Another technology that is having a breakout year is blockchain and crypto. It’s not just that Bitcoin achieved a record high this year, but the fact that Nigeria became the second biggest market
for the cryptocurrency probably driven by foreign exchange restrictions in the country. Water will always find its level.
The bigger trend here is the rise of decentralised finance. Finance without intermediaries. This could be the use case, if not the killer app, that blockchain technology has been looking for.
The fact that it is being covered by mainstream business magazines like Entrepreneur
and the purchase of Bitcoin by the treasuries of companies like Square
indicates that this is a global phenomenon. This trend has not been lost in Africa more generally
Not to be left out, our home-grown BuyCoins is leading the charge to develop products
that democratise cryptocurrency for a bigger (if not yet quite mass) market. South African Exchange VALR
also raised this year.
The Tech ecosystem
Finally one cannot review the tech scene without mentioning exits like the big $200 million Paystack exit
This capped a growing trend in African exits this year, which included DPO Group exiting at $288 million
(although this has recently run into a number of issues
) and a host of others
, bringing the total exits to well in excess of $1 billion.
The ultimate goal of people making investments in tech is to have a successful exit, earning a multiple of their initial investment. While the African tech ecosystem has done very well in attracting investment
, in my opinion, too much of this has been coming from outside the continent.
I’m not one to turn my nose up at any money, but African money funding African companies solving African problems should be the foundation of our tech ecosystem.
While one swallow does not make a summer, the fantastic returns made by African investors in Paystack, DPO Group and others will provide liquidity for further tech investments by them and the company founders. And should encourage more African investors (who can be very conservative, especially at the institutional investing end of the spectrum) to come into the market.
Post tenebras spero lucem. All the best for 2021.