Data is important. It is critically more important in a fast-growing industry like the digital technology sector in Afrika. Entrepreneurs and investors depend on insights and data to make important decisions.
January 2019 has seen three startup news websites publish three different reports on 2018 tech and startup venture investments in Afrika.
Weetracker’s venture investment report points the funding figures to be $725,5 million, Disrupt Africa’s report shows $335 million while Digest Africa reports the total investments to be $1,19 billion.
Sello Moloi, Startups editor with iAfrikan.com, poured out his concern in this article he wrote weeks ago. He described these reports as having an "Iceberg problem." He explains the Iceberg Problem is when:
"...those who compile these reports on startup funding in Africa rely on publicly disclosed funding in most cases, the size of startup funding in Africa which takes place in private and is not publicly disclosed is not known to them."
Sello also blames that these sketchy reports for the bubble in e-commerce in the last few years. He says:
"Research and trend reports were published waxing lyrical about the size and potential of Nigeria’s e-commerce market. What followed, was funding, lots of it, into Nigerian e-commerce platforms or anything related to them. However, 2018 happened. Konga, the poster child of Nigerian e-commerce several years ago, was sold to Zinox Technologies amid many negative speculations and rumors after it had secured several funding rounds of tens of millions of dollars over several years. Rumors, which still persist, are that Konga was sold for $10 million, however, Zinox has denied this."
Not only Konga suffered, other players in e-commerce businesses in Nigeria like Efritin, DealDey and Gloo closed their doors.
Transparency, Artificial Intelligence and Machine Learning
These companies normally don’t share the method they used in carrying out these reports which question the whole practice.
Accessing and collecting data is both difficult, time-consuming and expensive. To aggregate and analyze massive amounts of data, we have to use Machine Learning (ML) and algorithms to collect and mine terabytes of data and knowledge contained in patents, venture capital financials, M&A transactions, market sizing, and startup and investor websites. This will enhance the accuracy of venture investment reports that are available publicly.
When asked how he provides predictive insight for startups, investors, established companies, media, governments and academics, Anand Sanwal Ceo and co-founder of CB Insights, a key insight and research company in Silicon Valley- the epicenter of technology and innovation in the world, he had this to say:
"We think with machine learning and data we can help them make better decisions, so to some degree, you can think of us like an algorithmic McKinsey. Over the next five years I think it’s realizing that vision and helping our clients generally in the global 5000 make these very important strategic decisions with data, not with the traditional gut instinct and Google searches and guys with MBA’s that they are relying on today."
Although there are different funding numbers because of of various reasons including what everyone understands an Afrikan startup is, all show an increase in the number of investments in Afrikan tech startups. Afrika’s tech startup ecosystem definitely needs open and honest data that will help entrepreneurs and investors make the smartest decisions.
Cover image credit: Mark Baumeister/Unsplash