Analysis: Do African Startups Really Benefit From the Foreign Capital Craze?
By Stéphane Ballong
Although foreign funds are increasingly pouring into the continent, especially into start-ups, the real benefit to local economies is far from certain. One solution is to encourage the emergence of African-owned companies.
In the bustling microcosm of African tech, this was one of the highlights of late 2021. The Nigerian company MainOne, which was founded in 2010 and has become one of West Africa’s leading data storage centre managers and communication service providers, announced in December that it had been acquired by the US company Equinix (which had $6bn in revenue in 2020). The deal that was finalised in early April for $320m was widely applauded as it confirms that African-founded and -run businesses are successful and can attract a big name from Silicon Valley to the continent. Wall Street-listed Equinix has some 220 data storage facilities worldwide.
The MainOne takeover is not an isolated case. In recent years, the continent has seen the emergence of a multitude of start-ups, many of which have been wildly successful. “Technology-savvy young people have created types of businesses that we have never seen before,” Ngozi Okonjo-Iweala, head of the World Trade Organisation (WTO), recently told us. They include Flutterwave, InstaDeep and Copia Global.
Photo courtesy of WOCinTech.