Where does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhere does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhere does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhere does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhere does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhere does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhere does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhere does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhere does YC’s scaleback leave the African tech ecosystem?
“I really hope that one day, YC will recognise the value of what I’m building and back my startup. That will be the game changer.” This is Ayo*, a Lagos-based founder, sharing his hopes of being selected into one of Y Combinator’s cohorts last year. Like many founders, Ayo associates YC’s acceptance with startup success. “The money, the network, the opportunities—nothing beats it,’ he added emphatically. Ayo’s startup did not make it to YC’s list in the end, but that has done nothing to his faith in the accelerator. He will continue to try until he gets in, he says—a possibility that is now much slimmer, given YC’s recent scale-back from Africa. Y Combinator (YC), one of the world’s leading startup accelerators, has been a major player in shaping Africa’s tech ecosystem since the middle of the past decade, when tech-powered upstarts began to spring across the continent. The accelerator has backed over a hundred startups, including some of the continent’s success stories such as Flutterwave, Wave, and the Stripe-acquired Paystack. A report from last year, by research firm Briter Bridges, described YC’s portfolio companies as having the propensity to scale, evidenced by the over $1.3 billion follow-on funding raised by YC-backed companies. In a 2022 report by TechPoint, Michael Seibel, managing director and group partner at Y Combinator, spoke to the accelerator’s presence in Africa: “We continue to be impressed with the talent and ingenuity of African founders. We believe that African startup founders will be a massive part of the continued development of the continent.” But a sharp trend observed in YC’s latest cohorts suggests that the global accelerator may now be looking less at African (and other non-US) startups. About 50% of the startups YC funded in its 2021 summer batch were based outside the US—a move which, at the time, highlighted the accelerator’s increasing global presence. The W22 batch that followed recorded 24 startups from Africa, marking about 6% of startups in the cohort. After this cohort, the tide noticeably changed, and fewer African startups were accepted into the global accelerator. YC’s S22 batch had just eight African startups, a 63% decline from the previous cohort. Now, the latest W23 cohort welcomed only three startups from Africa, the lowest in recent years. Reports from industry watchers say the trend is traceable to YC’s refocus on US-focused startups, which comprised over 90% of the latest cohort. Indian startups, which historically trailed US startups in the number of accepted entries, recorded lesser acceptance in this cohort, with only 11 of them representing the region, compared to 33 in the winter batch last year. The trend is replicated across other regions, including Latin America, suggesting that Africa is not alone as it watches YC moonwalk from its heavy lifting across the world. But unlike India and some of these other economies, Africa’s technology ecosystem is just beginning to fledge, and YC’s presence directs much-needed attention to the continent, enabling more funding and growth opportunities. Implications for the African tech ecosystem Given YC’s outsized role in the African tech funding market, it’s easy to imagine a gloomy picture for the continent should the global accelerator decide to shelve its pan-African ambitions. Many African startups—such as Healthlane—credit the turning point in their businesses to the accelerator. Healthlane had failed to secure institutional investment after trying for two years, then they got into YC, and a $2.4 million funding followed. So, if YC gets blurry in the African tech picture, what happens to our nascent ecosystem? Joshua Marima, head of engagement and investor relations at research firm Briter, believes that YC’s scaledown might impact the ability of founders to raise capital, but not in any way absolute as other accelerators and funding instruments are now operational on the continent. “Founders will feel the pinch of YC’s $500k being less available, but there are now several other sources of funding. We are also seeing several other international accelerators stepping up, such as the Techstars brand which recently announced an all-Africa cohort. Local accelerators are also being more deliberate,” he said in a chat with TechCabal. Marima’s opinions are echoed by a reality in African tech: numerous founders are raising significant capital—$1 million and more—without going through Y Combinator. Local funds worth over $10 million, such as Microtraction Community Limited and LoftyInc Afropreneur Fund 3 are on the table for Africans. This was not the case when YC first began to invest in African startups. The ecosystem is maturing fast on the back of the “Africa rising” narrative, which continues to position the continent as a choice destination for local and global investors. “There was an obvious funding gap when YC made its first strides on the continent. Nobody was writing big cheques for founders back then. I think YC contributed hugely to closing that gap as the case it today. Of course, we still need YC in the African tech picture, but no founder should ride with the idea that they cannot scale without YC’s ticket,” Osita Nwoye, TechCircle’s founder and longtime Africa tech pundit, said on a call with TechCabal. This gap Nwoye speaks about is recognised by global accelerator Techstars, whose CEO, Maelle Gavet, predicts that Africa will leapfrog Western Europe this year by producing more tech-powered startups. Bridging this funding gap is a priority for Techstars, demonstrated by their decision to set up shop in Lagos, Nigeria. The ARM Labs Lagos Techstars Accelerator’s head, Oyin Solebo, spoke to TechCabal for this piece. “I can’t comment on YC, but what I can tell you is that we [Techstars] continue to believe in the strength and potential of African entrepreneurs. This belief is supported by the result of our recent State of Innovation Research report, which demonstrates an increasing belief in innovation coming from Africa…and the importance of accelerators for the African ecosystem,” she said. The way forward There are arguments that it is probably too early to confirm YC’s scaledown in Africa—especially as their reduced footprint is at a
Read MoreWhat will happen now that AI can sing like your favourite Nigerian musician?
The Afrobeats genre has seen an explosion in popularity, with non-indigenous creatives attempting to create music in this style. The recent advancements in artificial intelligence, which allow people to clone the singing voices and styles of artistes, raise excitement and questions about what voice cloning means for Africa’s music industry and the rights of African creators. Recently, a TikTok user known as Ghost Writer produced a song called Heart on My Sleeve, using an AI model to replace the vocals with the voices of Drake and The Weeknd. The song quickly went viral, amassing 15 million views on TikTok, 275,000 views on YouTube, and 600,000 streams on Spotify. While fans were impressed by the quality of the music, the music label Universal Music Group demanded the removal of the song from all platforms, citing that the voice cloning infringed on the artists’ intellectual property. But will this really stop AI? Barzini, a Nigerian musician, expressed concern about bad actors using this technology to profit off indigenous artists who have spent years honing their craft and navigating the intricacies of the genre. He notes that it may become difficult to differentiate what’s real and true from what’s not, drawing parallels to the days of “Alaba Piracy” when unofficial albums from artists were sold in the streets. He explained that before music streaming gained ground in Nigeria, Alaba DJs would string together a bunch of singles and maybe a few collaborations with other artists, design a cover artwork, and start selling a “brand-new album” on the streets” without the knowledge of said artiste. “However, unlike then, the world is connected on social media, and any African artiste can easily put out a disclaimer and call out the parties involved,” he concluded. That said, Barzini who has also recently promoted his music with a video of him copying the voice and mannerisms of a popular Nigerian state governor, Nyesom Wike, acknowledges the marketing opportunity that his music could gain if he cloned a popular artiste’s voice and featured it in his songs. Beyond marketing, he is also excited about the creative possibilities, but he is resolute about not crossing legal boundaries. Despite his reservations, Barzini acknowledges the potential of the technology to reshape the landscape of Afrobeats collaboration, as it can also enable African artists to collaborate with foreign musicians or even AI-generated versions of them. “Imagine if I did a song with Michael Jackson’s backing vocals!”. In the end, he thinks that the pros outweigh the cons. Joey Akan, a Nigerian music journalist, is excited about the possibilities of artificial technology in music. On a call with TechCabal, he said, “I don’t see anything negative to be concerned about. At best, that viral video of Drake and Kanye only showed us what is now possible with artificial technology.” He said that AI can learn songwriting techniques, can learn singing techniques, and with that technology, one can create an artist without having to deal with “the shortcomings of humanity.”He believes that African countries should shift their focus towards using technology to scale their markets. As an example, he cited how Nigeria, despite the popularity of its talents, and vast potential, is not topping the streaming market. “Nigeria is the [most populous] African country but it does not rank in the top 20 streaming markets. Namibia has more streamers than Nigeria,” he said. On the flip side, Edwin Madu, musician and owner of record label St. Claire Records, expressed a sense of resignation towards the inevitability of generative technology. “I didn’t actively seek out ChatGPT, it found me. I use Notion [a productivity work tool], and one day ChatGPT was integrated. Now I use it almost every day. The same goes for music AI.” However, he is deeply concerned about the potential infringement of other people’s originality in the work produced with AI. “It’s not like sampling. This technology replicates people’s distinct voices and styles. As an artist, I personally believe that there should be a cost associated with it. There is a need for proper laws and regulations to ensure artists can earn fair compensation,” he concluded. Echoing Dwin’s concerns, Ifeyinwa Anyadiegwu, head of legal at Chocolate City, another music label, stated that voice impersonation in music could potentially lead to the infringement of intellectual property rights or result in a complex and lengthy process for licensing and clearance. “Master owners, publishers, artists, and other rights holders will all want a share of the pie, leading to a complicated legal landscape,” she told TechCabal. On the other hand, she agrees that different versions of a song can bring attention to the original creators. It can also potentially increase revenue for African artistes when properly licensed and used. “Either way, the legal complexities of AI-generated music need to be further investigated before the world gives a co-sign so that no one is shortchanged. Joey Akan, however, sees these legal challenges as opportunities for the space to evolve and create new laws that can favour artists and allow them to benefit more holistically from their work, especially legacy musicians, who are no longer alive. “If we can move past the creepiness of working with dead people, there is much to gain business-wise. I want to see a Portable and Fela collaboration. With AI and the right laws in place, this can be a possibility.” However, when TechCabal contacted Portable, he seemed to have not seen the viral videos impersonating popular singers. When he was asked how he feels about the possibility of someone else singing like him using AI voice clones, he answered, “It is not possible, there is nobody that can sing like me.” The rise of Afrobeats and the advancements in AI technology are shaping the landscape of music creation in unprecedented ways. While there are valid concerns about appropriation and gatekeeping, there are also opportunities for greater collaboration and inclusivity.
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