Building Unicorns in Africa: A Comprehensive Guide

In the world of business and entrepreneurship, the term 'unicorn' has taken on a new meaning. It no longer refers to the mythical creature of lore, but to a privately held startup company valued at over $1 billion. The term was coined in 2013 by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures. In the African context, the unicorn phenomenon is relatively new but rapidly growing, with companies like Wave Mobile Money, Interswitch, Flutterwave, Chipper Cash, MNT Halan, and Andela leading the charge. This article will delve into the journey of these African unicorns and explore what it takes to build a unicorn in Africa.

Unicorns in Africa

1. Wave Mobile Money

Wave Mobile Money is a fintech startup that has revolutionized the way money is transferred in Africa. The company has developed a peer-to-peer mobile money platform that allows users to send money to each other instantly, without the need for a bank account. Wave has been successful in tapping into the unbanked population in Africa, providing them with a simple and affordable way to handle their finances. In 2021, Wave became Africa's first unicorn, valued at $1.7 billion.

2. Interswitch

Interswitch is a Nigeria-based fintech company that provides electronic payment services to businesses and individuals across Africa. The company's services include payment processing, merchant services, and retail banking solutions. Interswitch became Africa's first fintech unicorn in 2019 after a $200 million investment from Visa, valuing the company at $1 billion.

3. Flutterwave

Flutterwave is a Nigerian fintech company that provides a payment infrastructure for global merchants and payment service providers. The company's platform allows businesses to accept payments from customers anywhere in the world. In 2021, Flutterwave raised $170 million in a Series C round, bringing its valuation to over $1 billion and making it Africa's third unicorn.

4. Chipper Cash

Chipper Cash is a cross-border mobile money transfer platform that operates in seven African countries. The company's platform allows users to send and receive money across borders instantly and at no cost. In 2021, Chipper Cash raised $100 million in a Series C round, bringing its valuation to over $1 billion and making it one of Africa's newest unicorns.

5. MNT Halan

MNT Halan is an Egyptian fintech startup that provides unbanked and underbanked Egyptians with access to digital financial services. The company's services include micro-lending, bill payments, and mobile top-ups. In 2021, MNT Halan raised $120 million in a Series B round, bringing its valuation to over $1 billion and making it Egypt's first unicorn.

6. Andela

Andela is a tech talent accelerator that trains and connects African software developers with global tech companies. The company's platform allows businesses to tap into Africa's vast pool of tech talent, providing them with the skills they need to succeed in the digital economy. In 2019, Andela raised $100 million in a Series D round, bringing its valuation to over $1 billion and making it one of Africa's first unicorns.

Building Unicorns in Africa: What Does It Take?

Building a unicorn in Africa is no small feat. It requires a combination of innovative ideas, strong leadership, strategic partnerships, and significant capital. Here are some key factors that can contribute to the creation of a unicorn in Africa:

1. Innovative Ideas

Unicorns are often born out of innovative ideas that disrupt traditional industries. For example, Wave Mobile Money disrupted the traditional banking industry by providing a mobile money platform for the unbanked population in Africa. Similarly, Andela disrupted the traditional tech talent industry by connecting African software developers with global tech companies. To build a unicorn in Africa, entrepreneurs need to think outside the box and come up with innovative solutions to the continent's unique challenges.

2. Strong Leadership

Strong leadership is crucial in building a unicorn. Leaders need to have a clear vision for their company and the ability to inspire their team to work towards that vision. They also need to have the resilience to overcome the many challenges that come with building a startup in Africa, such as regulatory hurdles, infrastructure gaps, and market uncertainties.

3. Strategic Partnerships

Strategic partnerships can play a crucial role in the growth of a startup. Partnerships can provide startups with access to resources, expertise, and markets that they would not have access to on their own. For example, Interswitch's partnership with Visa not only provided the company with a significant capital injection but also gave it access to Visa's global network of merchants and payment service providers.

4. Significant Capital

Building a unicorn requires significant capital. Startups need capital to develop their products or services, scale their operations, and expand into new markets. In Africa, access to capital can be a major challenge for startups. However, the success of Africa's unicorns has shown that it is possible to attract significant investment in the continent. For example, Flutterwave's $170 million Series C round was one of the largest funding rounds ever for an African startup.

Building a unicorn in Africa is a challenging but achievable goal. The success of companies like Wave Mobile Money, Interswitch, Flutterwave, Chipper Cash, MNT Halan, and Andela has shown that it is possible to build a billion-dollar startup in Africa. However, it requires a combination of innovative ideas, strong leadership, strategic partnerships, and significant capital. As Africa's startup ecosystem continues to mature, we can expect to see more unicorns emerging from the continent.