YCombinator is undoubtedly one of the most prestigious accelerator programs in the world. Having taken in its first batch of startups in 2005, the California-based accelerator has gone on to onboard 4198 startups, with Africa making up 86 of those startups.
Some of YCombinator’s most illustrious alumni include Airbnb, Doordash, Dropbox, Reddit, Stripe, Coinbase, Flutterwave, Twitch, (need we go on?), showing the quality of the accelerator in helping build valuable startups.
Despite a vibrant ecosystem which has seen a fair amount of innovative startups sprout and even go on to achieve exits, southern African startups have not had much success in getting into YCombinator over the years. Of all the 86 African startups which have gone through the accelerator, only five startups have been from the southern African region.
For context, in west Africa, Nigeria alone has had 59 startups go through YCombinator. Nonetheless, the startups from the region which have managed to successfully go through the accelerator have gone on to have mixed fortunes.
In this article, we take a look at them and what they have been up to since going through the accelerator.
Union54 (Zambia, Summer Batch 2021)
Union54 is perhaps the region’s most “interesting” YCombinator alumni. Through its debit card issuing API, the startup claims to have issued millions of debit cards to African consumers from almost every country on the continent which have gone on to be used for hundreds of millions of dollars of transactions across different merchants from various industries and locations.
Since YCombinator, Union54 has gone on to encounter what one would call mixed fortunes. The startup raised $15 million over two rounds and embarked on a rapid pan-African expansion, facilitating dollar-card issuances by numerous fintechs across the continent.
But in July 2022, disaster struck the Zambian fintech startup. A surge in chargeback fraud instances caused the startup to suspend its operations up to this day.
Speaking to TechCrunch recently, CEO Perseus Mlambo stated that at the time, it underwent a compliance audit and expected to get its platform up and running in two months at best. That has not been the case.
However, Mlambo added that Union54 is still well-funded and will be launching its next product in the near future with “better adjustments.”
Passerine Aircraft (South Africa, Summer Batch 2017)
Passerine Aircraft was a drone startup which developed electric-powered aircraft that can attain flight speed using a jumping mechanism, eliminating the need for a runway to take off.
This article explains in much more detail how the startup’s drones worked.
According to Crunchbase, the startup raised a $120,000 seed round from YCombinator and no other fundraising afterwards.
After YC, Passerine went through NVIDIA’s Inception program, a virtual accelerator program that helps startups during critical stages of product development, prototyping and deployment.
According to the official YCombinator website, the startup is now inactive.
Floatpays (South Africa, Summer Batch 2021)
Floatpays is an on-demand wage access platform that helps employees access, spend, save and manage their money.
Through a mobile app, the fintech startup gives employees access to a portion of their earned income at any time during the month.
The app’s other features include financial education, a budget planning tool, cash access, and voucher purchases all from wages earned but unpaid.
Founded by Simon Ward in 2019, since going through YCombinator, Floatpays has gone on to raise a further $4 million with contribution from the now-defunct Naspers’ Foundry.
The startup was recently awarded Heavy Chef’s South Africa’s Top 5 Most Exciting Startups Award and is on a pan-African expansion drive.
GlobeDX (Seychelles, Winter Batch 2019)
GlobeDX is a global cryptocurrency derivatives exchange whose flagship product is bitcoin VIX, the “first low latency perpetual futures exchange” in the world.
The platform also claims to allow crypto holders to trade global markets with Bitcoin and grants users the same access to data leveraged by institutional investors.
The startup, which has dubbed itself the “Coinbase for derivatives,” was founded by Shaun Ng and James West in 2018 and since its YCombinator days, it has gone on to raise over $21 million in funding.
JABU Logistics (Namibia, Summer Batch 2021)
JABU Logistics helps shops and bars place orders digitally to stock up their shop. The startup’s product fulfils the demand on the same day through tech-enabled warehousing, last-mile distribution and payment collection.
On the FMCG side, JABU claims to empower brand managers with live dashboards where they interact with the new frontier of retail. The startup is also in the process of launching a wallet, merchant services for banks and merchandising services for brands.
Since going through YCombinator, the Namibian startup, founded by David Akinin, has endured much success, both on the operations and fundraising aspects.
It has steadily expanded across southern Africa, with a presence in Namibia, Zambia, and South Africa, and planned entries into Botswana and eSwatini. Funding-wise, JABU has raised over $18 million in funding, the latest raise being a $15 million round led by Tiger Global in 2022.
There is no doubt that the southern Africa region’s participation in what is arguably the world’s most prestigious accelerator for tech startups has been lacking over the years. For those startups who have been part of YCombinator, their success has been mixed.
While others like JABU Logistics and GlobeDX have gone on to achieve relative success, others like Passerine Aircraft and Union54 have not been so lucky.
With applications for the next batch of startups to go through the accelerator still open until Friday 7th April, one would be hoping for more representation from the region henceforth.
