Where Einstein Meets Edison

Mobile Innovation in Africa

Mobile Innovation in Africa

Apr 21, 2011

Africa is a continent at the cusp of immense opportunity and growth.  With 5% GDP growth and an abundance of natural resources, Africa is now a target of many multi-nationals and entrepreneurs looking for investment opportunities.

The MIT Sloan Africa Business Club hosted the first Africa 2.0 conference on April 1st, 2011.  This event highlighted growth, innovation, and future opportunities in Africa.  With speakers including Dr. Ngozi Okonjo-Iweala, Managing Director of the World Bank, the conference held an all star cast of speakers who discussed technology and development ventures in Africa.

The mobile and telecoms panel highlighted several growth and success snapshots in Africa’s mobile ecosystem.  As many African countries hurdle telecom land-lines in pursuit of a completely mobile infrastructure, there are sound opportunities abound to address the expanding mobile subscriber base.  During the Telecom & Mobile Panel, three companies and projects were highlighted in particular.

M-Pesa
http://www.safaricom.co.ke/index.php?id=250  

M-Pesa has transformed the way millions of Kenyans interact with financial institutions. M-Pesa allows anyone with a cell phone to hold money in an account, pay bills, pay friends, or receive payments, allowing residents to move beyond a cash only economy.  After starting in Kenya, M-Pesa has moved into Tanzania, Afghanistan, and South Africa.  They are the current leader of mobile payments in Kenya. M-Pesa is a subsidiary of Safricom, a mobile provider in Kenya.

TxtEagle
http://txteagle.com/  

With TxtEagle, Nathan Eagle has helped create a system that takes basic text messages from nurses used to monitor supplies across the country.  Initially a success, participation quickly fell off once nurses became unwilling to spend money on text messages to update inventories.  To solve this problem, the business model was modified with small amounts of mobile airtime to compensate nurses for their help.

Suddenly, Nathan realized the power that small amounts of airtime had in enabling workers.  On average, those living in emerging markets spend 10% of their monthly income on mobile airtime.  Meaning, for small denominations airtime is as good as cash.  By offering users small amounts of airtime in return for answering a question of performing a task, TxtEagle is able to instantly and quickly mobilize and poll large numbers of citizens in emerging markets.

With 2.1 billion subscribers, TxtEagle is focusing on providing global brands access to the consumers of emerging markets.  Since access to consumers in emerging markets is often difficult and expensive, direct access to consumers through mobile phones is extremely attractive to global brands.  TxtEagle recently raised $8.5 Million in venture money to expand and accelerate their operations.

MIT’s Africa Information Technology Initiative (AITI)
http://aiti.mit.edu/  

Want to start a company?  Need some computer skills to bring your idea to life?  Need mentorship and support to launch your idea? You might take for granted how many resources exist for would be entrepreneurs here, but in many African countries resources are harder to come by and there are many structural impediments to launching a new tech company.  These problems are amplified for mobile/telecom start-ups.  With low smartphone penetration, higher cost for mobile internet, and wireless carriers refusing to work with new companies, opportunities are fewer.

MIT’s AITI has MIT professors and students visit countries like Rwanda, Kenya, Ghana, Zambia, and Ethiopia to teach 6-week courses on computer science and entrepreneurship.  They also help students gain access to investors and organizations that can help launch startup companies.  Working with roughly 30 students at a time, AITI teaches both core software development and business knowledge to promote company creation in Africa.

The program has born several successes since its inception.  HeHe, Ltd is a mobile services company operating within Rwanda and has been contracted for application development by the Rwandan government.  M-Kulima is an SMS based service for rural dairy farmers, providing them with pricing information.  And, a team from the Kenya 2010 class won the Base of the Summit peer award at a pitch competition in Helsinki, Finland.

Future of Innovation in Africa

The Africa 2.0 conference succeeded in highlighting the opportunities in growth and innovation in Africa’s growing mobile industry.  Entrepreneurs will do themselves justice by thinking positively about new opportunities in Africa.