DEMO Nairobi Event: Winners and Round Up
Tuesday, 30 October 2012
Another month, another pitch competition: The five winners of the recent Nairobi DEMO event will now take their start up to Silicon Valley for mentoring and meetings with potential investors. Local co-organisers CIO Magazine have the winners here:
  • Ghanaian mPawa seeks to address unemployment in the informal sector by listing informal jobs. The portal allows users to browse skill profiles. According to the founders, the portal has matched 2,000 job seekers in three months. The company has already raised USD90,000 and is looking for an additional USD100,000.
  • South African Flowgear was amongst the few pitches targeting the B2B sector providing ‘cloud management tools for firms allowing them to interconnect the different cloud solutions they have deployed, such as Salesforce and SharePoint. Flowgear provides a codeless dashboard which allows a fast deployment.’
  • Egyptian Qabila is a multimedia content crowdsourcing platform with currently 20,000 contributors. Clients to date include the World Bank, UNESCO and UNDP. Qabila looks to raise USD250,000.
  • Kenyan Sasa Africa is an ecommerce platform to connect craftspeople to online consumers. Craftspeople can upload information on their products via sms or mms. They will be alerted to a purchase by sms, and will then deliver their product to a mobile money kiosk and pick up their payment. Sasa Africa – still in the testing stage – hopes to host 600 crafts people and 3,500 products by the end of the year and plans to raise USD500,000.
  • Nigerian Maliyo Games argue that the Nollywood industry shows the demand for local content on the continent, and hope to replicate the film industry’s success with a gaming platform. They hope to raise USD300,000 in funding.
Here’s another short, slightly breathless overview of the event from one of the judges.

Tech Start Up Trends?
Lee Razo blogged a few interesting reflections on the event here. On the ‘unsurprising’ dominance of m-ventures at the event: ’One question nagging me about many of these products, however, is what would happen to their business models in a few years when smartphone technology inevitably becomes cheaper and more durable. This is why one of my favorite presentations was by a company named Balefyre which develops a software platform which acts as a bridge between the protocols used for modern smartphone applications and USSD, the protocol currently used for applications on low-end feature phones.’

This didn’t appear much of a concern to Savannah VC who bank on the smart phone remaining a smaller part of the market for a while longer: Their first investment was made in biNu, a service that ‘brings smart apps to dumb phones’.

Razo also flags the fact that many pitches mirrored established websites and services in industrialised markets, but are adapted for and reflective of conditions in African markets: Angry Birds becomes Mosquito Smasher, for example.

Finally, Razo was critical of the fact that pitches focused on ‘luxury problems’ rather than addressing so-called ‘bottom of the pyramid’ issues in healthcare, access to food etc. – but did not address the challenge that start ups hoping to attract venture capital need to show that there is a paying clientele for such services. This is of course by no means impossible: Kenya’s mobile money M-PESA service shows that there is good money to be made in the lower-income market. However, for many tech start ups who tried to address such issues, figuring out a revenue model is still a challenge.

On Twitter, Savannah VC’s Mbwana Alliy commented: ‘Was there a single mhealth venture out of the 40 that pitched @DemoAfrica? They were all the rage a year ago. Job search apps definitely up.’

More Funding for Tech Start Ups?
The Human IPO blog reports on the presentation by the AfDB’s regional director for the Eastern Africa region, Gabriel Negatu, who mentioned that a USD10m fund set up by the AfDB for ‘youth and other development finance institutions’ had not been fully taken up. AfDB now plans to place more emphasis on the tech industry. Negatu is cited saying that ‘We are now working with local banks to ensure startups receive the funding through loans in order to succeed, where we provide partial guarantee. (…). We want to see the developers and innovators grow their ideas into full high-value businesses by refining their business models to fit what other investors are looking for, and make it easier for them to get follow-on funding.’ Good news in principle, but often such approaches can be quite bureaucratic and slow-moving, especially because tech start ups – or any start ups, for that matter – are not the AfDB’s core competence.

And, Finally: Africa Assets @ Demo
Rachel Keeler attended the second day on behalf of Africa Assets, sitting on a short and sweet Sage panel meant to assess three 30-second idea pitches by students. There is not much to say on 30-seconds and a slide, as you can imagine. But that could be said of the six-minute presentations as well. Demo was not short on good ideas, but it was difficult from the presentations to assess the things that will make or break a start-up – you start with an idea, but then have they assembled the right team with the right backgrounds, what is their passion worth, have they done the right market research, mapped out their supply chain, anticipated all the problems, thought about the competition, built the right software, found a way to leverage existing platforms?

Surely these questions were addressed on the sidelines, or will be taken with the winners to Silicon Valley. But for our two cents, it would have been nice to see a public grilling – not just because we’re mean! – but to get a better sense of where and how the African start-up community is in thinking through the fundamentals. Perhaps we would have been pleasantly surprised. But by highlighting and focusing on the ideas alone, DEMO in some ways perpetuated that very problem that has been identified amongst Africa’s start-ups again and again: they think a good idea is enough – an issue that Andrea Bohnstedt recently discussed on a panel at the IHub.

Republished from www.Africa-Assets.com, an online publication on the private equity and venture capital industry in sub Saharan Africa.



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