The African tech start-ups eyeing global markets

African start-ups are expanding into Europe and other parts of the world, betting on providing more affordable services with a growing tech talent pool, at a time when many established tech firms are cutting back staff.

Nigerian data company Bluechip Technologies, which has worked for Oracle and Microsoft, is opening an office in Ireland, according to a statement on Monday. The firm, which provides data warehousing and analytics services, will rely on developers and data scientists from the continent to offer services to financial and telecommunications firms.

“We can do it cheaper than India and cheaper than Eastern Europe because the cost of living here is way lower and we have the talent,” Olumide Soyombo, the co-founder of Bluechip Technologies said in an interview.

In a slowdown in tech hiring, Africa stands out as an exception as the underserved populations on the continent outweigh inflation and slowing economies.

Bluechip joins a growing list of African technology companies including payment unicorn Flutterwave and drone delivery company Zipline, in expansion into developed markets. The drone medical delivery service first developed in Rwanda and Ghana. The company now primarily operates in the US, in partnership with Novant Health and customers including Walmart.

While Africa’s developer pool is still small accounting for less than 0.5% of the non-agricultural workforce, it is growing rapidly with the number of developers on the continent increasing by 3.8% to 716 000 last year, according to the Africa Developer Ecosystem Report by Google. Nigeria added 5 000 developers, the most of any country, to the ecosystem.

Bluechip’s expansion into Europe was prompted by the growing trend of remote working post-pandemic, a shortage of tech talent, and an increase in the demand for more efficient data management, Soyombo said.

Leveraging

The Lagos-based company that operates in five African markets has seen its revenue grow tenfold since 2014, crossing the US$50-million mark last year, said Soyombo, who co-founded the company in 2008.

By leveraging its experience working with some of the biggest technology companies in the world, Bluechip projects the company revenues to increase to $250-million in the next five-years, primarily from the European market which is estimated to grow to $105-billion by then.

The opportunities are not just from Africa to the developed markets, according to Surabhi Nimkar, partner at GreenHouse Capital who is seeing African start-ups expanding into other emerging markets including Latin America and Asia. “If you are building tech that’s specific to your region in Africa, it is actually super scaleable because the fundamental challenges are the same.”

Kuunda, a South African payment company that gives overdraft services, is now operating in Pakistan and Nigerian founded Helium Health, a company that digitises hospital networks and operations, has expanded into Qatar and the United Arab Emirates.

The Dubai- and Cairo-founded Swvl Holdings has been on an acquisition spree since now listed on the Nasdaq in the US after merging with blank-cheque company Queen’s Gambit Growth Capital. Blue Technologies plans to expand into francophone Africa including Cameroon, Senegal and Ivory Coast.  — Samuel Gebre, (c) 2022 Bloomberg LP