The first quarter of 2021 ended on a great note as two African fintech businesses gained unicorn status, a rare fit amidst a ragging global pandemic which is finally being aggressively tackled by the speedy supply of much-needed vaccines.
Such is the African story – a trail of surprises in the midst of uncertainty. On 18 th March 2021, Airtel Africa announced it had received a $200M investment from TPG’s Rise Fund at a valuation of $2.65B making it the latest African unicorn.
Exactly a week before, March 10 th , 2021, Flutterwave from Nigeria also announced a $170M investment from Avenir Growth Capital, Tiger Global Management and others at a billion-dollar valuation.
In the tech world hitting a billion-dollar valuation is a big deal – you earn the name Unicorn, a mythical animal that represents the statistical rarity of successful ventures coined in 2013 by Aileen Lee of Cowboy Ventures.
Most global technology companies strive for unicorn status preferably before they go public. As of March 2021, there are about 614 unicorns globally with a total valuation of $20041B according to CB Insights.
Given that the Africa tech ecosystem is maturing we are now seeing the manifestation of this mythical animal which is the subject of this essay to start the second quarter of a defining year.
These developments brought into sharp focus the uniconization of African fintech, ignited the debate whether unicornization abroad is the way to go for African tech ventures or whether according to Marieme Diop of the Dakar Network Angels, the focus should be on Gazelles (i.e. companies valued at $100M with $15M to $50M in revenues listed on the local stock exchanges) to boost the African market and create liquidity at home?
There is yet a third animal in the African kingdom introduced by Keet van Zyl of Knife Capital who argues that Zebras are less spotted profitable sustainable businesses that have an impact stripe – they solve really meaningful problems.
In my view we are going to have the manifestation of all three and even more as different entrepreneurs and investors pursue different approaches. After all Africa is large enough to accommodate many unicorns, gazelles, zebras, etc.
What is important to all businesses is the need to build strong unit economics at the foundation as Reid Hoffman’s blitzscaling is now giving way to Tim O’Reilly argument.
More importantly the recent crush of WeWork has everyone going back to the fundamentals – positive […]
