Weekly Roundup 9-11-15: Accelerators for VCs, Ugandan-made EVs and other rare ‘unicorns’ of global development spotted
Unitus Seed Fund this week rolled out what could be a novel tool to help fix the lack of local venture capital and investment expertise in social enterprises. It announced the creation of the Capria Accelerator, designed to train and support first-time venture capitalists based in South Asia, Southeast Asia, Africa and Latin America.
Capria is calling would-be fund managers interested in investing in the base of the pyramid enterprises to join the cohort in Seattle; the deadline to apply is Oct. 31. Those making the cut will receive $5,000 to cover travel/living costs and qualify for up to $45,000 in additional capital upon completion of the program.
David Bank at ImpactAlpha has a breakdown: “Capria will make up to three such investments and ‘warehouse’ them for the fund manager until that first fund is raised. At that point, Capria will transfer the investments to the new fund, quickly creating a portfolio the new manager can market to potential investors. Capria will sell the investments at cost, while retaining some of the upside potential.
“Capria plans to seed at least eight, and perhaps a dozen or more new fund managers in 2016, and to warehouse 10 to 15 investments of $50,000 to $300,000 each.”
For more on Unitus check out our interview with Will Poole, one of the co-founders of the fund and of Capria.
— ImpactSpace (@impactspace) September 9, 2015
M-PESA Enters its Next Phase
After years of unfulfilled anticipation, Safaricom has opened up its API for M-PESA, the payments platform it runs in Kenya and a growing number of countries in Africa and around the world. For the uninitiated, an API is a set of instructions and standards that guide programmers in designing new uses for existing software. By making this information public, Safaricom has given developers the tools they need to come up with a new generation of applications for M-PESA, the world’s leading mobile money service.
Safaricom sounded ebullient about the prospects: “The future we once thought very distant of machine to machine payments is here and now,” it declared. “The only limitation … is the developer’s imagination.” But developers themselves – though excited about its potential – weren’t entirely thrilled with the API’s design. One called the guide “probably the worst you’ve ever seen,” and others complained about its unwieldy format: lengthy Microsoft Word documents compressed into .zip files. More worryingly, some analysts raised concerns that the complex application process and technical hurdles could stifle innovation to some degree. (Safaricom is, however, organizing workshops and releasing additional documentation to help developers along.)
But though there will surely be kinks to work out and its format screams “late 1990s,” the API could spark some groundbreaking new services. Nex-gen M-PESA applications could accelerate the development of e-commerce in Kenya, make payments between users and merchants easier and more secure, and enable automated bulk payments from companies to their employees, among many other possibilities. Say what you will about Safaricom’s competitive practices – it has really advanced the ball with this move.
— Graham A. N. Wright (@GrahamANWright) September 6, 2015
Disrupt Africa is hosting a fascinating debate about what type of entity might become the continent’s first unicorn (an Internet company valued at $1 billion) and whether it will cater to BoP consumers.
Alan Knott-Craig, a serial entrepreneur, argues that any unicorn “must tap into the needs of poor communities, whilst simultaneously riding the wave of the growing middle class. The numbers are in the former, the money is in the latter.”
Peter Matthaei, Knott-Craig’s former partner, counters that no consumer product can start at the BoP. He says early-adopters are never the poor – “The biggest irony of Internet access has always been that those with the least money paid by far the most for it” – so consumer products should first target the middle class or rich. Knott-Craig, meanwhile, believes age is a better early-adopter predictor than income.
Matthaei takes his prognosticating a step further: Africa’s first unicorn, he says, will be “an existing solution, but made applicable to Africa. … In Africa, we don’t really invent things, but we’re pretty good at ninja-ing things to solve our specific problems. … America invents, China assembles, and Africa re-invents.”
Here’s hoping we don’t have to wait long to find out who’s right.
– Kyle Poplin
— Sidney Ochieng (@princelySid) September 11, 2015
A Paradigm Shift
Africans solving Africa’s health problems. That’s the idea behind this week’s launch in Nairobi of the Alliance for Accelerating Excellence in Science in Africa (AESA).
The alliance was created by the African Academy of Sciences and the New Partnership for Africa’s Development Agency with $5.5 million in seed funding from the Bill & Melinda Gates Foundation, the Wellcome Trust and the UK Department for International Development.
Dr. Fredros Okumu, a malaria researcher, told The Guardian: “A lot of research takes place in Africa but the leadership of the research teams is rarely African. This … will mean that we can come up with research ideas that reflect local needs and our key priorities.”
Africa has 15 percent of the global population, 25 percent of the global disease burden, but produces only 2 percent of the world’s research output.
Julia Kramer, writing recently in the Stanford Social Innovation Review, said, “To move beyond good intentions, the development paradigm must shift toward collaboration, community involvement and empowerment.”
AESA represents exactly such a shift.
– Kyle Poplin
— Saskia Heijnen (@SaskiaHeijnen) September 10, 2015
(Tail) Pipe Dreams
Everyone’s comfortable with the notion of Africans buying and selling 3-volt, battery-powered solar lamps to Africans. But how about a hybrid gas/electric lithium ion battery-powered sedan produced in Africa and sold to Africans? Impossible, right? Don’t tell that to Paul Musasizi, president of the state-run Kiira Motors Corporation.
The press has been more than a little skeptical about his goal of manufacturing 7,000 versions of the Smack sedan in Uganda. The lack of both a manufacturing infrastructure to produce the vehicles and power grid to keep them energized (they run a purported 80 miles per charge) is fueling questions from skeptical press reports – see Quartz and The Wall Street Journal (paywall) – in recent weeks. But this project, which the government has poured $40-plus million into, appears to have more to do with lifting Uganda’s manufacturing prowess.
Arguments abound that taxpayer dollars would be more wisely invested in lower-tech agriculture processing instead of chasing a Tesla-like pipe dream. Perhaps, but we shouldn’t count out the intangible ROI of national pride that comes with achieving something that’s never been done before, and the ripple effect that can have on communities and countries. The technology might not be the biggest barrier to success. After all, how many successful purely government-run auto companies can you name?
— Gregory Branch (@gregbranch) August 10, 2015