Unlocking Africa’s Digital Entrepreneurship Potential: Insights from the Tech Hub Landscape post-Covid

Exploring the Resilience and Evolution of African Tech Hubs in the Digital Entrepreneurship Landscape

During a session focused on unlocking Africa’s digital entrepreneurship potential, Aissata Tambadou of the International Trade Centre moderated a panel that explored the transformative role of tech hubs in fostering entrepreneurial success across the continent. The session highlighted the often-overlooked significance of over 1000 tech hubs in Africa, which serve as the backbone of the digital ecosystem by providing entrepreneurs with resources, support, and visibility.

The COVID-19 pandemic’s impact on these hubs was a central theme, with digitalisation emerging as a critical factor for their survival. The pandemic forced tech hubs to adapt their methods and approaches to market shifts, leading to a reinvention of business models and an expansion of their reach beyond local geographies.

Martin Labbé presented a report on tech hubs in Africa, identifying five business models: grantees, networkers (co-working spaces), consultants, agents, and builders. Each model faced unique challenges during the pandemic, with a notable shift towards digitalisation. The report also stressed the importance of community building, new startup development, and ecosystem collaboration, while pointing out that most ecosystems fail to meet these goals.

The panel discussed the increasing trend towards sector specialisation, particularly in agri-tech and fintech, and the range of services offered by tech hubs. Despite the critical role of these hubs, only a minority can provide direct financial support to startups, highlighting a persistent challenge in the ecosystem.

Policy recommendations from the report called for policymakers to focus on improving the quality of existing hubs rather than creating new ones, helping hubs define a core purpose, and building ecosystems that address systemic issues. The panelists concurred that the quality of entrepreneurial support provided by hubs has improved post-COVID, becoming more tailored and result-oriented.

Audience questions raised concerns about the challenges startups face in securing funding without losing intellectual property and the role of hubs in supporting vulnerable and displaced populations. The panelists emphasised the importance of multi-stakeholder engagement and the need for innovative financial models to support startups at various stages.

The session concluded with insights into the evolving role of tech hubs as centres of multi-stakeholder engagement, bringing together government, corporates, and academic institutions to support innovation and development. Policymakers were urged to support hubs by enacting appropriate policies, providing infrastructure, and fostering an enabling environment.

In summary, the discussion underscored the resilience and adaptability of tech hubs in the face of the pandemic, the improved quality of entrepreneurial support, and the necessity for continued engagement and tailored financial models to support the diverse needs of startups across Africa. The session highlighted the systemic approach needed to nurture innovation and the potential for tech hubs to drive economic growth and development on the continent.

Aissata Tambadou:
Hello, everyone, thank you for your patience and thank you for joining us. Hello, some of you are writing emails, maybe you’re sending chat on WhatsApp. Welcome again, thank you for your patience. My name is Aissata Tamadou, I work for the International Trade Center, which is a joint agency of the UN and the WTO. And I work in the tech sector development section. I’ll be moderating today for this session about how to unlock Africa’s digital entrepreneurship potential, and we will have insights from the tech hub landscape post-COVID. I am not sure if all of you here have a deep understanding of the African tech ecosystem, but if you research it, you’ll easily find success stories about entrepreneurs, growth rate, crazy fundraising, VC going mad about unicorn and also like photo wave or wave. But the critical role of the tech hubs we work with and we know in nurturing these successes is ultimately unnoticed, which is a shame. And they are, in my sense, the backbone of this entire ecosystem, which is flourishing in Africa. Across the continent, we count over 1000 hubs. They empower entrepreneurs, they give them resources, they support them, they give them visibility. But this entire ecosystem is shifting and it’s mainly impacted by the COVID episode. These hubs, they have to give them themselves, give them their methods, their understanding of the market, which is shifting. And in this context, digitalization is a key factor for their survival. We’ve seen for the past years, funding, reducing, we’ve seen startups changing their approach to markets and they are the one who are going to support them to thrive in these challenging times. And this is the reason why our third… take-up report in Africa focused on post-COVID resilience. And we have the chance today to welcome four esteemed guests with years of experience in Africa. But before I give them the mic, I will invite Martin Labbé, my colleague here, to present a brief summary of the report. So please, join me in giving him a warm welcome. Thank you.

Martin Labbé:
Thank you. So this is the third edition of the Take-Ups in Africa report. I see that maybe, I assume, maybe not everyone is involved in the African ecosystem. So for those of you who are not, I think there’s a lot of valuable insights that you can gather from this report. We actually had an Accelerator founder from Zurich who took the second edition and found many interesting things in it. So if you want to download it, we have some flyers here afterwards. It’s also available on our website. So this is part of the effort of the International Trade Center to enable as many SMEs as possible to connect and trade online. The Take-Ups play a very important catalytic role in this effort. So for us, they are a new area of focus and we basically consider them as the next generation business support organizations. And our Digital Moonshot is a recent initiative from our Executive Director, Mrs. Pamela Cooke-Hamilton, which is basically putting together all our efforts in this very busy space of digital photovoltaics. At our level, in terms of tech sector development, specifically where we work with tech companies, tech startups, IT and DPO companies, freelancers, we have really this approach of working at the policy level, designing national policies, working with intermediary organizations, increasingly those tech hubs. And also, of course, directly with the companies, connecting them with the markets, investors. And so we do that in partnership very often with these institutions that are represented here today. The report itself and this session here is generously supported by the Netherlands in the framework of the NTF4 program. So the report itself, it’s Brighter Bridges, our partners for the research, as well as Bondinov and Impact Hub Network. We have put together the findings of a survey across Africa with 52 in-depth respondents and an access to a database of more than 1,000 tech hubs across the continent prepared by Brighter. As you can see here, the research itself is starting with a focus on the goals of the tech hubs. So the community aspect is extremely important, as well as the enabling of the development of new startups, and then collaboration between ecosystem stakeholders. On all three goals, very often in most ecosystems, we’re failing. So these are really important issues to be addressed. And so for that, you have five business models that we have identified across the tech hubs we work with. The grantee that gets money from governments, corporations, international organizations, and that during COVID was heavily hit because these forces of funding had become less. And as a result, their activity reduced significantly. The same for the networker. The networker is a co-working space. So you might have heard about the innovation village in Uganda, Kampala. which offers seats and chairs and offices. And so obviously during COVID, these places were as directly impacted and could not welcome entrepreneurs. And if they had nothing else to offer, they were not able to sustain their revenues. And so they took a very heavy hit. The consultant is working as a contractor for any kind of funder, very often also from the private sector with an open innovation approach, connecting big companies with innovative startups. And so they saw a smaller reduction in revenues, especially also because they have been able to go digital. And this is the most important finding from our research. It’s the digitalization of the services, which means that all of a sudden Francis here is no longer just bound to Dar es Salaam, but he’s able to reach out to startups across East Africa and beyond if he wants to. So that’s really the most important change we have noticed. And that I think will be discussed later on also. The agent and the builder is a minority kind of business model. So this is about investing directly in the company, helping companies to be built. So M Studio in, for instance, Abidjan is a builder. So is the startup factory in South Africa. This is an emerging model, which requires a lot of firing power. It’s very costly to have this model, but it’s also a very effective one, we believe, because we don’t know how many of those startups that have been churned out by the startup factory are still around. So we have to get some additional research on this topic. And I think Dario is working on this for this team. In terms of the different types of hubs, I see I’m already over time. So just to say that it’s the accelerators. incubators, co-working spaces, it’s the hacker spaces, it’s the venture vendors I just mentioned, and also corporate venture hubs. So all of these are part of the tech category and they are increasingly focused on specific sectors because if they are generic everyone is competing for the same entrepreneurs which you see very often still happening. So it’s important to have a focus. Agriculture in Africa is a very big topic, agri-tech, and then fintech, it’s the first vertical in terms of attracting venture capital, extremely important, and then you have e-commerce, waste management, and so on. So cleantech is also with waste management emerging, as you can see the greening ICT aspect is very important. In terms of the services offered, as you can imagine, it’s our training, events, access to networks, and the more value addition you have in the service, the less hubs you have capable of delivering that. It’s a human resources problem very often with the hubs. So they have to specialize and they have to increase the human resources, the capacities of the human resources that they have, and that’s very complicated because it means accessing resources. Types of financial support offered, only 8% are able to provide financial support. So obviously this is a minority, we always have the same problem of cash constraints. These are under-resourced organizations and so they don’t have the cash to deliver these kind of services, and very often we see that programs like the ones the International Trade Center is implementing don’t go through the hubs to, for instance, give out grants, because for us it’s technically complicated, but it would be something really required to empower the hubs also and give them more resources. And last but not least, for those of you here who are funding hubs or policymakers, you have a very important role to play, of course you know this. So first of all is don’t build new hubs, please, because there are too many already, most of them are not sustainable, so it’s important that even if it’s very tempting because you think all the other ones are crap, that you focus on those that you have in the country already, that you discuss with Francis and his colleagues, with the help of the of the networks, that you can actually improve the quality of the existing hubs. So that is the first thing. The second one is define a core purpose for the hub that doesn’t know what to do and is doing everything because they have to access any source of funding that is available, help them focus on a particular topic, whether it’s agri-tech, early stage, women, help them focus, but also give them the resources for that. And last but not least, it’s an ecosystem that you need to build, not just a hub, so you need to address the systemic issues that slow down the development of your ecosystems. We are working with the Ministry of Digitalization in Abidjan, for instance, on the startup labeling process, so that they have a channel, a way to support startups that is structured and built on a private-public dialogue. Don’t have startup support from government going through a process that is only government-led. You need to have the private sector in the room when you hand out cash and other benefits. These were the three recommendations I picked from this report. We have many more and I see I’ve taken double the time, but I heard we have no one after us, so we can really expand. So thank you for your patience and over to you, Aissata.

Aissata Tambadou:
Thank you, Martin. I’m interested to understand that these hubs, they have similar challenges to the entrepreneurs they are supporting. find sustainable business models. They have to find some things in a supportive ecosystem also. So they are really entrepreneurs, supporting entrepreneurs in Africa. And that’s the difficulty. Today with me to dive more into this topic, I have Nanko Madu, Director of Programs at AfriLabs, a network of tech hubs present in 53 countries in Africa, so almost the entire continent. I have Dario Giuliani, CEO of Brita Bridges, a business intelligence center that informs businesses and leaders across the reserve markets in Africa and now expanding in Asia and Latin America. I also have Francis Omorojie from Tanzania, the founder of Innovate Ventures, a tech venture factory supporting entrepreneurs. And online, maybe we’ll have Ninon Duval from Bond’Innov if we can, but hopefully. So Francis, how do the findings of the reports that I’ve presented compare with your experience of running Innovate Ventures in Tanzania? And what’s the post-COVID situation? I know it’s been three years already, but how it is impacting businesses and hubs?

Francis Omorojie:
Yeah, so before I start, how many minutes do we have? So two minutes, right? Two minutes. OK, yeah. Yeah, I’ll just make it very short. So for us, it’s more like a new normal. Before, we were talking about, we were very happy before the COVID, a lot of physical interactions, maybe coworking spaces during trainings that are very structured in a physical manner and all of that. So I mean, it was like during COVID, I had eight months to be able to really think through, how are we going to move forward? Because people weren’t coming to the offices, the coworking wasn’t working, and even the funding went down because people don’t know what is. So all of this, we went back to the drawing board and started thinking through how do we support companies? What kind of infrastructure do we need? What kind of skills do we need? How do we really translate what is physical into virtual but also keep the impact? So that actually kind of helped us turn to a more venture driven, not like short programs. So that we have enough time to support the startup through that journey. So not just like coming to the training and buy it. So that’s how we turned to becoming a virtually structured venture builder at that point. And we moved most of our program online. For example, with what we were doing, we created a platform where we now have online courses. So people can actually take these courses and we provide even online mentorship. So we try to replicate the experience even to be like almost as if it’s physical. And also the opportunity that we got was we’re not able to even support entrepreneurs beyond Tanzania. Because it’s online, it’s virtual. And there’s startups in Kenya, Uganda. And in the last program, we had startups that came in from Rwanda, Kenya and actually invested in them. And also in Nigeria as well. So it gives us kind of opportunity to a larger market. But it took us time to really find the best way to be able to transition. But yeah, we’re happy it’s working. And I think this is how it’s going to continue for a very long time.

Aissata Tambadou:
So your experience is pretty positive regarding the impact of COVID. It was a way for you to reinvent your business model. Do you think it was the same for everyone in your country?

Francis Omorojie:
It wasn’t, but yeah, now it’s positive. But during COVID, it wasn’t positive. I mean, you know, they were in cash flows. They were in work for like eight months or thereabouts. So that was a really tough time. And people, most hubs, not just hubs, even entrepreneurs, SMEs actually kind of shut down. Within that period because there was no way to survive. So just like people have like tough skin. find a way to be able to navigate and continue to scale. So right now it works, yes. But that time, over 70% of SMEs really went down. In Tanzania, from WE. And these people, because they had less than three to four months runway, so with the continuous impact of COVID, they weren’t able to sustain at that point. And there were no alternative financing to keep them in this kind of area. So it wasn’t a business as usual, and people took time to find their feet while some couldn’t actually come back.

Aissata Tambadou:
It’s really interesting that you’re sharing this from the Tanzanian point of view. You, Nanko, you have this perspective over the entire continent, because you’re working in 53 countries, working with your hubs in your networks, what have you noticed from the impact of COVID on them?

Nanko Madu:
For us, it’s very similar to what the report says. And Innovate Hub, being one of our member hubs, has resonated what we’ve experienced with the other hubs. We need to think of it as an organization around all the companies and mentors. That’s how we’re able to gather data from our hubs. So during the pandemic, we had to increase that, because like you said, these hubs were shutting down, no cash flow, they were confused and all. So one of the things that we noticed very quickly was the digital shift to digital transformation. So the moving of most physical services to digital, right? The engagement with their communities became part of the digital services that were offering those things and trainings had to be moved to digital. It took a bit of a while, but they figured it out eventually. The second, and just to add, that most of the folks seeing the pandemic. and then as a blessing, just like you said. So initially it was really not so good, but eventually it was a blessing because as they saw that they could move in more programs that were virtual, less costs, capital cost intensive and things like that, so actually the same impact. So that’s the second is enhanced community engagement. So rich, you know, you’re able to stay. So where you have a physical training and you need people to be there and you wake up and they’re like, oh, there’s no transport, there’s traffic, there’s this, there’s that. People are able to join virtually from wherever they are in the comfort of their home and so that enhanced, you know, community engagement. So you’ve had a lot of calls running webinars, you know, running sessions that just, brown paper sessions, share what they do, you know, running their programs online. And so the activities were really much at the time and very positive and I feel like we supported them, you know, in most of those nights. So we saw that happen. Another thing that we noticed was resilience. You know, it forced the hubs to be resilient as entities. It forced everybody, but for the hubs particularly in just saying that I can do this, but just in a different way. Yeah. And like, was there like experience sharing between the hubs? Like from country to country? Yeah. So for us as AfriLABS, what we did at the time, in fact, that was when our capacity building program for the hubs had just kicked off. And so we also had a delay, but we, you know, moved everything online. And so we have, we were running webinars, you know, called the weekly webinars, like learning sessions. And so in those webinars, identify experts in certain topics but we’re also bringing hubs that you know have experience so there’s a lot of learnings. Francis was part of many right so hubs that have navigated their way around either diversifying funding you know or learning to leverage on current infrastructure but embedded they were able to come and share with other hubs so we created an online community over the course and continue to support them in that regard. Now another thing that we saw was in terms now of the the second level of startups there was a navigation towards you know generating health tech and ed tech solutions at the time which has been sustained so a lot of ed tech solution health tech solutions emerged of course to meet the challenge that was being faced at the time. So funding and access support mechanism so like he mentioned in his report the grants reduced obviously because you know the fear of the future and risk and all that but what we’ve seen that you know through some of our programs we were able to mitigate that to the house by providing them with a grant through some of our programs that then enabled them to survive at the time yeah.

Aissata Tambadou:
Do you want to say it also did it provided for these uh

Nanko Madu:
absolutely so we provided grants we provided consultancy opportunities for them to mitigate that and for some coming out of that they became consultants you know on certain topics so that funding source wasn’t really there but because of the opportunity of the grant even into that as a means for sustainability?

Francis Omorojie:
Yeah, so just to add to what Nanko had said, actually, when COVID came, and I think the first people that actually provided grants to us was AfriLabs, through the capacity building program, and that gave us the opportunity to kind of even test our model, our venture capital model, and then we were able to sustain it. So that’s one of the supporters that actually, you know, helped us to come up again.

Aissata Tambadou:
Community was clear, I mean, like, it was people as in our daily lives, but also in the business way we do things. You, Dario, you doing research in this intelligence, what was your point of view on the situation? And what was the, what was the evolution since the two, three last years, you know? And do you think also that things are going back to what, the way they were before? Or you think that we’ll keep having these programs online and everything online?

Dario Giuliani:
I think one of the aspects that got us excited was that COVID revealed, I think, the weaknesses of a, or like the inconsistencies of a system that we thought was present and wasn’t. So when we started, we were actually working in GMA, we were working with AfriLabs on the first reports and even just the, I would say, the sophistication of the terminology. It was very plain, you know, there would be like the incubator, there would be like the accelerator. And it felt almost like the terminologies had taken a step too far compared to where the hubs were. And so, like, you had, especially as Dr. Wu was doing this definition of hubs, and we’re bringing them down by microservices, like it’s an incubator if it doesn’t provide a certain amount. of cash and it’s only for companies that are dissolved or like if it’s accelerated it provides more and faster. And then when you actually looked at the space, 95% of the hubs were not even giving cash. So my first experience with hubs has been in 2016 in Impact Tabacraft and it was a great example because like they were not giving cash, they were hosting a bunch of events as one of the revenue sources. They were, they built a hackers out maker space and they were hosting MPGs and delegation and those sort of things. And I think one of the campaigns that I’ve personally been trying to put forward was the like showing that these hubs for like cities across Africa represented a big safe haven for the youth. And I still, I still think that being, and I was very happy to see that the results at the beginning, the first result was community building aspect, not even the venture building aspect. And because that’s what 95% of the hubs were doing. And then what happened of course, like we, there was a lot of the Americanization of the narratives, like a lot was of YC doing equity. So hubs were supposed to be giving equity, but most of them didn’t even have cash to swap equity for. And so it was, it was interesting to see the results because then what COVID revealed was that at the end of the day, you take out rent from these hubs and you take out the programs and events organization and their skins. And then the, what that revealed was that some of the major hubs. were led by individuals that were well-known in the space and would have a history in the space and would have an understanding of the space and likely would have skills that would allow them to be consultants, for instance, or program implementation partners. And those are the same hubs that ended up surviving because many of these became ITC consultants, World Bank consultants, MasterCard Foundation program implementation, and so on and so forth. And so it really, at the end of the day, went from equity funding companies, basically hubs operating like funds, which never happened. To date, I do not know a single hub that has made the cash back out of a thousand hubs that were planned. But there are phenomenal community building organizations all across the continent that have a sustainable model, or more or less a sustainable model. And so to go back to what I said at the beginning, I think the most interesting aspect right now, and I think this fits within a whole reconfiguration of the whole VC space in general in Africa, is that now we’re questioning some of the conceptual pillars that we had five, six years ago. And so I was just saying yesterday, and Martin, that I think within a matter of five, six years, we’ve already managed to overcome this conceptual limit.

Aissata Tambadou:
This American conceptual limit.

Dario Giuliani:
Yeah, I would say so. Like the flattening of the complexity of what these organizations do. And I always say that the VC space in Africa’s first role in Africa is being a PR. Because the African continent went from being the dark continent on The Economist in 2000, to being like the new frontier for the youth and saving the world for young demographics. like bridging with digital transformation. And this, I think the startup, the innovation space is a single most important, I’d say like, game changer in the narrative. And I think this is the narrative that then brings all of us to be here. A lot of universities introducing entrepreneurships in emerging markets courses. And this is how I think the paradigm shift. And it’s gonna take a long time. So the reconfiguration of the narrative and the maturity, the process of maturity of the narrative is a very important one. And I think this type of research or the networks are doing, it’s very important.

Aissata Tambadou:
It was a good thing to reinvent the African way of doing startups and business and to approach take care innovations in our ecosystems.

Dario Giuliani:
I don’t think we have reinvented anything. I don’t think we’ve invented anything. I think we’ve analyzed what we were analyzing wrongly.

Aissata Tambadou:
Okay. Then it is a reshape of the narrative for the Africans. But you’re saying that the apps that survives are one of the most wealthy apps or those who have the most advanced skills in project management or consulting. So are you saying that in the next years, the only apps who can survive are those who have like rich or experienced vendors? What about the others? Are they supposed to disappear? What would happen for them?

Dario Giuliani:
I think, I mean, it’s the market gives a market day but there’s space for different actors. Like there’s a, the co-working space market in Africa is becoming big. Like you start having bigger names and co-working spaces in Nairobi are packed, right? We’ve changed four in Rwanda and they were packed, right? And to the point that now we’re thinking like we need to change again because like, it’s too crowded. I’m sure Legos is probably the same, I’m sure Dart is the same, so people are going back to work at the office, first. Second, the industry is actually starting to have world-class co-working spaces, which are great, great aggregation centers. So I would say this is a fairly sustainable model, unless another COVID happens. The fact that many of the hubs are run by now, I would say, veterans in the space is also a fairly sustainable model. It’s hardly scalable, because effectively you’re a consulting company, based on one, two, three founding members’ experience, but it works. I think what no one is now thinking is that a hub can just give out equity and make money out of it, being an accelerator.

Aissata Tambadou:
But this model doesn’t work anymore?

Dario Giuliani:
I don’t think it’s ever worked. Okay, so it was a smooth creation. I don’t think it’s basically a hub thing, it’s just a market thing, how many equities do we have anymore? So you can’t really say that this model is going to be sustainable in the long run or not, at this point. Except what we were talking about yesterday, maybe using the YC model to want to invest in Africa, then maybe we can start looking at what the numbers are going to be, what the model is going to look like. Then of course, in terms of equity, maybe in the next 15, 20 years, I don’t know. The other aspect is that all these organizations, including networks, as Martin was saying, they act as middlemen for cash deployments, for foundations, for corporate foundations, for grant donors, for governments, for NGOs that can’t mobilize cash directly.

Aissata Tambadou:
Do you think that they should have one business model and focus and be experts on this, or they should like a variety of business models in case something happens?

Nanko Madu:
Just to add to that, you see the categorization of the type of grants, right? So that’s the reality. So firms depend on grants to survive their own programs, you know, through funding. Also, my consultancy like the Sandbox in Kenya, consultancy, you know, you come in business, you need legal advice, you need business development, very clear you pay and they offer that and you go. While others have funds like venture platforms in Nigeria, they have fun like, you know, these ventures, you know, they have funds that they’re running. So, you know, some are very community based because it doesn’t mean that to answer your question, like, oh, we should forget about them. They’re not going to work. It’s just their own focus is different from another. And so in our labs, you know, we run capacity building programs for them. These are the things that we’re telling them, you’re not on the same level and it will be unfair to assess all of you as though you’re on the same level or even offer support to you as though you’re on the same level. So we’re categorizing the hubs by the category that you have. Yeah. Say this was a community, guys. Let them continue to do what they’re doing. We’re going to do that to be able to be efficient and impactful in the kind of community building initiatives that we run. But these are funds. How do we get more funds to them? You know, to continue to do what they’re doing for consultancy. How do we push and navigate more of those offers? How do we, you know, build their capacity to be able to be sustainable? So it’s looking at them from those different lenses rather than from hubs.

Dario Giuliani:
And then also, like, there’s something that I’ve learned. It. There’s a lot of international money going into this house, donor or commercial, but it’s it’s overseas. And you have places like Nairobi or Lagos or Cairo where you have very specialized hubs, but then you have places. is like Bhojambura or like Lubumbashi. But there are only three people that really know what’s going on there. And so if you’re someone who wants to enter the market and do market strategy, you throw money at them. We’ve thrown money at them because we were, 2019 Brighter was contracted by the IFC to do study in Congo. We went to the only people that we knew were doing something in Lubumbashi. And that’s the reality of things of Africa, Africa, but always we’re talking about four and a half cities. So what about everything else? And so when you actually start factoring in all these other smaller places, the market supply of expertise remains small. And so what happens is that then the donors go to the hubs that maybe isn’t a professional consultant, but it’s the only place that has knowledge of what was going on in Arusha and Mombasa in Argeza. And they would then double up as consultants, of course, because they get $25,000 coming from the World Bank for some degree of study. And that’s how to do things. That’s how the market operates. But on the other hand, the bright side of it is that they get an opportunity to develop new splits and to develop a business model that may see them like evolve.

Aissata Tambadou:
Do you think that this post-COVID era impacted the quality of support that hubs are doing? Because from what I hear, they are here for survival. They’re trying to find a business model, trying to find a grant, the money, they’re answering to any call for tenders they can find. which is understandable, like their relationship with the entrepreneurs, do you think that they’re receiving more quality in their support or less quality? To be honest, like honest here.

Dario Giuliani:
I would say, I would say more, I would say like the fact that we understand what they do better and the very fact that like ITC for instance, ran a diagnostics of it, means that there is a, like no one wants to waste money, right? So the donors that then put money into these companies, because hubs are companies, want to make sure that they know what they’re funding. So I would say funding is becoming more tailored. So as funding has become more tailored in the VC space and now there’s debt, now there’s…

Aissata Tambadou:
We know that VCs are sometimes irrational, even lenders. They have this big conception of things, but they don’t really on the ground entrepreneurs. You as a hub runner, what do you think about the impact of your, of the quality of the support you give or that other people are giving?

Dario Giuliani:
So I’ll say like, from my experience and also working with other hubs, the quality has quite increased. Reason being that LRO has a few different infrastructures to support the trainings. So for example, you have maybe the diagnostics tool. I think we use it across all our programs. I always beg Martin for it every time. So that kind of helps us to kind of really identify the pain points that we want to really solve. It’s not like, you know, creating like generic causes anymore or trainings right now, because it has to be online, it has to be very tailored. So you want to now look at, use that kind of tool to kind of streamline the pain points, the gaps and create training or mentorship sessions or activities that really can answer to those pain points. So now it’s more streamlined, but also more quality because you have like, in terms of key outputs, for example, we brought in some consultants for a program. working currently and the TA or the technical assistance that they have to provide to the startups must have like a result-based. So we want to see, we want to see maybe 10% on your revenue or you want your raising funds, you want to say that you’ve raised a fund. So we want to be able to see, like you said, the money is not free anymore. We want to really be able to report numbers and report what makes sense. So that kind of forced us to not do something more general, but now very tailored and can be considered.

Nanko Madu:
I absolutely agree. The number, the quality has increased, if anything, or improved working with the hubs. So because sometimes we run programs that, you know, targets the entrepreneurs through the hubs, a number of them. And so we review the hubs and identify those that are able to, but in that implementation phase, there’s a number of quality checks, quality assurance exercises and assessments in during the program. And then there’s monitoring and evaluation, you know, so we’re checking the impact, whether it’s a six week program or not right in the middle, we carry out an assessment and that’s just, we’re talking to the entrepreneurs, we’re deploying services to the entrepreneurs, asking them what they feel, what they’ve learned, you know, the impact of the training, their challenges, and this number quickly feedback in the hubs, training with the hubs quickly adjusts their delivery methods and curriculum, right? And then that just improves it. So even if I just take a look at what we’ve run in the past year, a program that we ran a year ago, for example, the Rebel Women program, we quickly learned lessons documented in applying it across other programs and we’re implementing things. And so the quality is getting better for sure. One of the things that he said, I would encourage that hubs needs assessment, don’t just go and run a program for the sake of running, you have to conduct a needs assessment on the entrepreneurs, on the targets, and then follow that to, you know, deploy your intervention and support.

Dario Giuliani:
The level of scrutiny is higher. And money is very targeted at certain things right now. So you have to, like when you say awareness is the first step to like improvement, it’s true. Like Elisa, now we know what we’re talking about. From the VC’s race to the hubs, to what like models and startups can do and handle. When I went to Nairobi first six years, six years ago, there were like 12 ride-hailing companies. There is none, all across the continent. There’s Uber involved and Careem, like that’s it. There are models that have succumbed to like global competition and race to the bottom of prices. Like, this is what I mean by like, it’s part of a whole reconfiguration, systemic reconfiguration in the whole space. The hubs are part of the process and as such, have their own process of improvement. But like companies, startups, investors, donors, the financial space, yeah, the financial space has changed. Now you have debt, you have convertibles, you have asset finance, revenue-based finance. You have grants, you have technical assistance. Before it was just like a big meatball of stuff, right?

Aissata Tambadou:
Last time, we have time for a few questions. So if you have any questions for us, please feel free to ask. Right, one, two questions. Okay, Rob first.

Audience:
Thanks for this. The report also talks about the importance of the hubs in terms of supporting innovation and it talks about an ecosystem approach. So thinking about what’s the ultimate impact of the hub. So I wanted to hear from you also. So COVID also presented an amazing new opportunity in terms of trust in digital, people working online, people buying online and so on. So what did we learn about that, about ecosystems and about the ultimate impact of these hubs in terms of supporting innovation and driving development?

Francis Omorojie:
Okay, maybe I go first. So, I mean, maybe at a point, the hub, before in Tanzania, people feel like when you talk about ecosystem, it’s just a hub. But the hub is, the reason being that the hub kind of supports entrepreneurs across most of the ecosystem, in terms of trends or not market, in terms of compliance, regulatory, in terms of looking for capital, as case may be. So, all of these ecosystem, all of this aspect of ecosystem are very crucial to where start-up development is going. So, for example, right now, when we talk about supporting companies to go to market or looking at maybe other infrastructures, that’s one thing. If you want to go maybe digitally, you want to buy, you want to sell online, you don’t have the right talent, you don’t have the right system, you don’t have the right entrepreneurs or gateways, for example, for payments and all that. So, there is a lot more work that hubs are trying to do, outside just supporting entrepreneurs, in terms of making the market more accessible, building infrastructure or supporting to bringing companies or advocating for infrastructure and making maybe gateways to be ready and all of these. And also, in terms of policies, in terms of also building maybe NGR rounds or angel investors. So, for example, for us in Tanzania, when we start supporting companies at scale or at the validation level, we understood that they need money. And this money is not a busy money, because they don’t have enough transactions, but they also need money to validate. So, that’s why we started two years ago, we’re going to set up a syndicate network and we set up an angel network called Serengeti. And we syndicate, we innovate, and the angels now do those NGR rounds. So, what it does is to help them really validate their business model and create a business case for businesses that will come in. So that is also, you know, another work that hubs are really doing. How do we have to tweak a little bit of this ecosystem aspects that can make it easier for entrepreneurs to really penetrate? I think, I think, sorry Nanko, can you extend to that?

Nanko Madu:
Okay. Yeah, absolutely. Okay, so for us is, one of the things that has come out is this multi-stakeholder engagement, right? Bringing together the stakeholders and working with them. So before the pandemic, but I feel as we’re really just enabling for support to the hubs to further support the entrepreneurs is more around the angel investors, so investment, so the money and the hubs, you know, build investable startups. So we found out that there was more. There’s the R&D and you need like academics institutions for that. So we’re beginning to form partnerships with academic institutions, you know, tell them to not open hubs, new hubs, but to liberate on the existing ones and begin to run research and development of products, you know, within their institutions, right? Working with corporates, right? So either, you know, as a means to either supply potential challenges that need innovation, you know, but also funding for that early stage investments to entrepreneurs. We’re working with governments for the policies, for enacting the right policies, providing an enabling environment, not just to the entrepreneurs, but also to hubs is important. You know, you need to provide the right, as government, I think I’m getting to that, you need to provide kind of like the right infrastructure, the right costs so that they’re better able to, you know, support the entrepreneurs and things like that. So we work, it’s not, we’re moving to, we’ve moved to like a multistakeholder, really ecosystem, galvanizing and working together position. And that has really helped the hubs to. to work better.

Dario Giuliani:
Yeah, honestly, I think we’re going back to the semantics of the term, like, why are we calling it tech hubs? Like at the beginning, maybe they were not really hubs as they are right now. Right now, as Francis was saying, like I was saying, at the beginning, or this is still the case in smaller markets, they have represent for outsiders, the only center where they can find out something about what’s going on in innovation in this space. What happens is like, for instance, the I4 policy initiative, many other policy initiatives, Francis was saying, the hubs have now become like this center. They’re individuals that can be angels. So I get the angels as one of the latest networks, but like there’s now networks happening everywhere. And they work very closely. Like AfroLabs now runs this catalytic funding, which basically merges together different dimensions of the ecosystem across Africa at the Pan-African level with match funding, with angel network coming together. And so I think this is where, and this is why I was getting mad when at the beginning, the whole conversation was around equity. Because hubs, you can’t measure in a direct way, or you can’t quantify, not match, you can’t quantify necessarily in numbers, the impact of a hub. You need to apply system thinking around it. And the more the ecosystem gets sophisticated, the more the system thinking need to be applied. Because there are so many… Like, offspring of what this work is, what these people are doing.

Aissata Tambadou:
Is it real? We’ll take maybe one or two last questions and we’ll end.

Audience:
I think for me, I understand the sustainability in the heart itself, maybe from the finance streams. I think the challenge that normally arises is actually from the entrepreneurs themselves. Because sometimes you find that they need different funding models to advance their solution they want to build. And sometimes you find that the grant funding, it’s not always easy to get. And then you’ve got the commercial banks that you normally use as well. They are not very easy to find in the startups. But also now if you were to look in terms of venture capitalism, then you find that the moment you get into venture capitalism, you end up losing your IP. Whether you’ve got someone that takes an equity in your estate, and then they might end up consuming the entire entity that we’re trying to build. So how do we then bridge the gap between those in terms of finance models, while trying to protect the SME and not actually losing the IP that the startup has?

Aissata Tambadou:
Just before you answer, I’ll take the other question also.

Audience:
Mine was wishing focus to helping vulnerable and displaced populations. And kind of maybe touching on what variety of business model you would support. When would you, if you would encourage people with aspirations to have their own tech business, and have their own startup, but are coming from a very disadvantaged position, and have issues with financial access, bank account, ID issues. Would you encourage them to come in and interact with the ecosystem? So just a broad point on this.

Aissata Tambadou:
So who wants to take the question about funding?

Audience:
I mean, I will answer with a provocation and say, is it really the hub’s role to determine? I mean, what the roots is for the entrepreneur. Like I think they can, I would say five years ago, someone would have expected them to fund them. These entrepreneurs right now, I think the answer that you might get, and correct me if I’m wrong, is they might help you navigate this self-determination process of what you actually are building, but they won’t directly help you. They will indirectly assist you and give you the tools, right? It’s like I started therapy.

Nanko Madu:
Yeah, absolutely. But they’re also like direct chips of giving you programs and opportunities like the Catalytic Africa is early stage, do what is there and things like that. So we have a number of those that exist. So it’s just ensuring you’re talking to the right hub that has information on things that it’s willing to support. Yeah, but to answer your question, so in our network, we do have hubs in remote location. We have a hub in Aruba, for example, that border town has the displaced community. And then we run programs there, right? And specifically it was targeted at displaced communities and the disadvantaged. So depending on where their hubs, even in Kenya, we have the hubs in the rural areas. Of course, they’re not as sophisticated as those in the big cities, but they do exist and they offer support to innovators and startups. On that, some of our programs, we run like community-based innovation. And then on internet pregnancy at GM, so we funded innovations in those areas, in remote communities in Tanzania, Uganda, and the like. So yeah.

Aissata Tambadou:
Yeah, so it kind of depends based on the hub. Yeah, any last question? No? So if you could, the mic, maybe.

Audience:
Maybe just a tiny point on the Morgan Hub. What we’ve experienced is that innovation programs in like are actually run by the NGOs as intrapreneurial, so they’re not like they’re not sourced because the unit economics in this place is already problematic imagine in those environments that are usually also siloed within the economy for instance or the compound so I would I would say try to look into intrapreneurial project from like Save the Children or like whatever like World Vision they usually have their own markets of innovation in there. Yeah I work with the Danish refugee council, we have some projects as well but yeah it’s always interesting to take on your systems approach as you were saying and see what actors we can leverage as opposed to just trying to do stuff ourselves.

Francis Omorojie:
Of course when you have one thing that probably helps that maybe what they’re saying that helps might not be able to come in at the very idea level because it’s not going to be sustainable for them so but even to kind of build a partnership like a hub that’s maybe nearby city or something actually can tell you what kind of profile of entrepreneurs are looking for maybe people that have products already probably have not gone to market and looking for maybe two entrepreneurs or partners and all that so your role at that level is to prepare people to get to at least have a product and move them to say you know you can’t be able to go to this place to have the service so that’s the one thing you have to throw yourself into a place because the value chain I know this is where we are and this is we produce kind of innovators and then move them to this incubation hub or something so we have a final word especially something you want to share with policymakers really short word you’re inspired I mean, for me, it will be a few things, very short. One is supporting in, you know, enacting the rights, policies and regulations, listening to the house, the ecosystem in enacting those laws. Don’t borrow the laws, you know, make it very contextual and relevant to the ecosystem and enabling it to go. And then providing the right, like I mentioned this earlier, infrastructure, like affordable infrastructure. So internet, which is a being of, you know, a lot of hubs existing, that’s one of their offerings. So affordable internet connectivity, but also, you know, decent roads for the hubs will be what I would say. Yeah, so for me, I’ll talk about just three aspects that maybe the policymakers, the government are looking to. One is creating innovative models for financing startups. I mean, I know they have like these credit schemes and all that, but it’s not to create the one that’s more dynamic that can actually support the startups at the very end stage where business cannot come in. Another aspect is market. So maybe probably trying to think about how do you create, maybe, you know, use a market competition policies to be able to create some kind of market availability for startups to actually validate your own market. That gives an opportunity to say, you know, this is what we’re doing and we have something that makes sense. Because if you are coming, like, for example, I have an experience of like, you know, a fintech that is trying to come into, you know, trying to connect with the telco, because they are coming with the competitors, telco will charge the fintech customer over 300% than their customers. So that’s already a barrier to the fintech even succeeding. So we need some kind of policy that can actually cut off these things that they could be. fair competition and people can be able to integrate whoever they want to integrate without extra cost. So that’s the last part is also curriculum for education. You know startups have the right talents and what we get maybe actual art from school probably needs more polishing and if we can actually start changing the foundation and putting the right courses, trainings at educational level and the foundation level that could really be very interesting and be more sustainable for startup.

Dario Giuliani:
I think no matter what the success of any of these startups or project is, I think policymakers will usually touch from this should understand the like the upskilling and emancipation that is running all of this basically brings and they have the opportunity to basically invest in the new leadership of their country because at the end of the day like these people that put themselves especially in challenging contexts across Africa, people that like utilize their resources in their time, their passion to deliver something to their community no matter if their skill or not would then go on to do something similar like it’s very rare that I’ve seen people just completely step out of the game. So they are no you know that for a decade they are involved in the improvements of the community one way or the other by hiring, by running events, by running like gatherings and I think it’s very important that from a government level it’s a very cost-efficient way to train your leadership more than having a better professor in your school.

Aissata Tambadou:
Thank you for your last words. Thank you everyone for listening and participating in this panel. It was a good session for us to learn from our experts here. Thank you for your time and your expertise. That’s it for us today. Thank you for your patience also. We were a bit late, but it was really interesting for us to learn more about the tech landscape in Africa. So see you soon. You’ll find the reports here, and you’ll have this virus to kill it with. You can also find them in the ITC’s website. Thank you. Have a great day and great lunch.