A recent look at the startups that have raised more than a million dollars in Africa this year shows an increasingly diverse picture: $499 million raised in 11 countries from 111 different investors. It seems that over the last few years there has been a real maturation of the venture capital scene supporting startups across Africa, which is great to see.
It appears to be the perfect time to launch a startup in Africa.
However, where is the best place to start a startup in Africa?
Is it Nairobi with its incredible early adopter culture?
Could it be Kigali with its high ease of doing business?
Or perhaps it’s Lagos with its giant market?
While all these markets have their unique perks and could be the best place to launch a startup depending on the startup itself, this article will seek to shine some light on an underdog: here’s why you should consider starting your startup in Kinshasa, the capital of the Democratic Republic of the Congo.
Why you should consider Kinshasa for your startup
Let’s start by assessing the positive characteristics of Kinshasa, then progress to the challenges in the market and how to surmount them.
The business case for Kinshasa is simple: it’s Africa’s third largest city after Lagos and Cairo, has solid 3G / 4G internet connection and is, in effect, a completely open market with an extremely nascent technology ecosystem. Imagine if you could go to Nairobi before Uber, Taxify and SafeBoda or Lagos before Jumia: wouldn’t that be the opportunity of a lifetime?
Kinshasa is open and ready.
Now, obviously it’s not as simple as that. While I personally believe that Kinshasa suffers as a Francophone city with a quirky colonial past that has isolated it from the global technology village, there are some real and unique challenges the face Kinshasa. Let’s tackle them one at a time:
- Internet access is expensive in Kinshasa. My personal experience is that the sweet spot for Internet pricing is when it hits $1 per GigaByte, it’s not scientific but in that ballpark Internet seems to become accessible. Unfortunately, the price for one GB of Internet on Vodacom in Kinshasa, the largest Internet access provider, is $6 per GB of 4G internet. This sticker price though is not as high as it would seem: there is a small telecom called Africell priced at $1 per GB, you can buy with Vodacom via MPesa 1 GB of Internet for $1 (though there is low awareness of this option) and most uniquely there is something called Papa Bonheur where an Internet user can share their internet with a group of six different phone numbers, allowing for a reasonable affordable per GB large bundle of internet to be shared among multiple users. Internet may seem expensive, but it is not as terrible as first glance would indicate.
- There is low adoption of smartphones. It is true that arriving in Kinshasa can feel like a nostalgia trip for the 1990’s, with restaurants having people look into each other's eyes instead of a tiny screen and WhatsApp still being a new word. It seems like the killer app hasn’t arrived for Kinshasa yet, since with cheap Tecno smartphones running Android for $25 and the aforementioned attainable internet prices the tectonics are not so different than other African cities that have become addicted to smartphones. However, this is where Kinshasa’s enormous size comes in, since even though its internet penetration is quite low, Facebook still has its advertising audience at 1,1 million users. This figure places it in the top ten largest markets across Africa, and it is one that, by my own calculations, has increased by 35% in the last year.
- Reputation of corruption. It is true that DRC is usually ranked extremely poorly for corruption and unfortunately this reputation has merit. Just last month the President of the DRC had his car pulled over with a police officer demanding a bribe. However, it is more nuanced than this. While South Africa, Kenya and Nigeria follow a roughly UK/USA legal system based off of legal precedent, DRC is extremely Belgian in its adoption of a Napoleonic Code legal system. The difference, in my view at least, is that those used to laws in America and the UK find DRC’s ‘formalities’ illegal. While the DRC’s laws may be arbitrary and confusing, it actually masks a deep love of rule of law, it’s just a rule of law that has an incredibly steep learning curve. In my experience, a huge portion of the money that gets spent on fines and penalties is written in black and white in law. The problem is less to do with gangster style ‘give me your money or your life’ and more to do with there being no centralized spot that can allow a company to quickly understand the Byzantine complexity of being compliant under Congolese law (now wouldn’t that be a good opportunity for a startup to solve?!).
- Isn’t there Ebola in the DRC? Google Maps has Beni, where the heart of Ebola has been, to Kinshasa as a 49 hour drive. Google Maps also has Beni as a 21 hour drive to Nairobi, 8 hour drive to Kampala and 7 hour drive to Kigali. If Ebola is your fear, Kinshasa is perhaps safer than East Africa.
The right time to start
While it’s indisputable that Kinshasa is a hard place to start a startup, the fact is also that it’s hard to start a startup anywhere on earth.
The above points don’t even get into challenges of a small middle class, lack of investors and brain drain since these issues are prevalent in most African cities (well, SSA-SA). At least with Kinshasa there is a prize worth taking, and, if you can win in a city as challenging as Kinshasa, perhaps your company can win in some of the other 50 cities in Africa with more than 500,000 people that are predicted to become the new megacities of the world over the upcoming decades.
While Kinshasa may not be the easiest place to launch a startup, one day in the future (most likely when it’s the largest city on earth, predicted to happen around 2075) people will wish they had been the first to enter. Today, you can be among the pioneers who did exactly that.
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