Should we classify companies like New York Stock Exchange (NYSE) listed ecommerce firm Jumia — that provide products and services to Africans, but were founded by expats — as African startups?
For Ugandan Ham Serunjogi (pictured above), the CEO and co-founder of cross-border payments startup Chipper Cash, the debate on what makes a company an African startup is “largely a distraction from what matters”.
Many in Africa celebrated the event as a historic day for African startups –as the continent’s first unicorn.
For others the company — which was founded in 2012 in Nigeria by Jérémy Hodara and Sacha Poignonnec, both French, and filed its initial public offering (IPO) as a German firm — is not an African success story.
But Serunjogi, who founded the San-Francisco based startup with Ghanaian co-founder Majid Moujaled, says he has “a lot of respect” for what Jumia has done.
‘It’s very clear to me that Jumia is an African company,’ — Chipper Cash CEO Ham Serunjogi
“Here’s a company that has exclusively built and provides world-class products and services for Africans. They’ve provided lots of employment opportunities both directly and indirectly,” he points out.
“I empathise with the importance of having more African founders — and there will be more of that over time — but I think it is actually quite un-African to not be welcoming to anyone that is willing to come to Africa and start a business serving Africans and contributing to the economic development of the continent,” adds Serunjogi.
He believes that anyone that is brave enough to take the risk to start a business has a special place in his heart.
“Anyone that’s chosen to focus on serving Africans and contributing to the development of our continent, I admire even more,” he says.
Serunjogi believes the continent has “a long way to go” until it becomes economically developed and that there is “no way we are going to do it by ourselves”.
“We need to be welcoming of others who are willing to make personal sacrifices and join us on this journey. It’s very clear to me that Jumia is an African company,” he says.
‘Essential to differentiate’
When it comes to defining what makes a startup an African company or not, Jamaican Marvin Cole — who is based in Cameroon where he runs tech startup Ovamba — has one rule of thumb: that it is essential to differentiate between companies which are successful at marketing their tech in another country, against those whose reason for being and entire focus is that market.
He cites Yahoo Japan and Yahoo USA as an example. The former, he says, is a huge success compared to Yahoo USA largely due to their partnership with the giant venture capital (VC) Softbank.
US-based Ovamba provides short-term capital to micro, small and medium-sized businesses in Africa, emerging markets and the Middle East for trade, inventory purchases and growth.
The startup also has operations in Cameroon and the Ivory Coast, as well as an office in Johannesburg, with plans to expand into Mali, Senegal and Nigeria by the third quarter.
Cole founded the startup in 2013 with Viola Llewellyn (who is based in the US but is of Cameroonian descent). In 2017 the startup was named the Best Fintech in Africa in the lending and finance category by Fintech-Africa.com.
In addition Ovamba, which last month announced it had processed over 1000 transactions in Cameroon alone, was ranked amongst the Top 10 Most Innovative Companies in Africa by Fast Company.
For Cole — who has in the past worked in Lagos and Johannesburg and now lives full-time in Cameroon — despite being based in the US, Ovamba operates as an African firm.
‘Definition falls to a mix of factors’
Cole believes that any definition of an African startup has to take into account a mix of three factors.
These he says are location of effective management, focus of the market and core operating team.
He points out that in Ovamba’s case (he) the CEO lives and works from Africa full-time directly overseeing core operations as well as strategic partnerships with banks, insurers, manufacturers and retailers.
Cole adds that Ovamba is “completely focused” on Africa and the Middle East as its core geographic regions.
“We’re convinced that the single greatest opportunity for impact and wealth creation is in being a productive part of the journey as Africa’s demographic wealth, youth bulge, and technology adoption cycle will create a super cycle for Africa (to) appropriate technology innovation,” he says.
Ovamba’s core operations, says Cole, are based out of its Douala office in Cameroon.
Says Cole: “Cameroon is one of few functional bi-fricated countries (with dual English and French legal systems and cultures) giving us a base of talent that is African, multi-lingual and completely comfortable within the frontier market environment”.
This article is part of a series in which Ventureburn aims to explore the question of what an African startup is. Do you have a strong opinion on the definition of an African startup? Email us your thoughts on the matter.
Featured image: Chipper Cash CEO Ham Serunjogi (LinkedIn)