Let me start with an apology. I was meant to publish the second episode of the ongoing series on capital raising, however, I got interrupted by this Andela story. I hope to continue the series next week, if I don’t have to make a rejoinder to this story.
From what I have observed, there have been thoughts around how Andela has successfully raised over $80mm in just over 3 years of operations and the effect of that on other tech businesses operating in Nigeria and across Africa at large.
Further concerns have also been raised regarding what I will term the Ecosystem Impact Assessment (“EIA”) of the Andela operations especially regarding the perceived crowding out effect of Andela’s strategy of hiring senior developers, while other tech businesses are left with less experienced developers for a significantly higher cost.
Further, EIA of Andela is regarding its business model of using its own developers and the Senior Technical Consultants (“STC”) to work on projects for foreign companies and the perceived re-colonization theme around it and the much debated “Slavery” in the model.
I will share my views around these topics;
On Andela’s Business and Business Model
- Andela is for Profit – Let’s get this clear, Andela is not here solely for social good. Andela is a for profit business. As an investor, I will be terribly disappointed if all Andela would show me is how they have supported the ecosystem and not how the business is growing. Jeremy Johnson (the CEO Andela) described the business as a “mission-driven, for-profit company”. So, they are not here primarily for the ecosystem, they are here for profit. So, I suggest that rather that cry foul, local tech businesses should find a way of keeping their developers. Raising their salary is not the best way. Maybe giving them a skin in the game. Employee Stock Option Pool (“ESOP”) might be a good way. (I will write on this later).
- The Andela Narrative Vs. The Actual – Up until now, Andela has sold us the story that it trains developers and use those developers for its clients’ businesses. This is true in theory. However, in practice, Andela cannot commit a client’s (Say MasterCard) project to a developer trained for just 6 months. This is not possible. Hence the need for Andela to recruit senior developers which they call Senior Technical Consultants (“STC”). Andela pays these STCs a lot more than the best local tech business could afford, hence causing some form of imbalance in the ecosystem. As we all know, water will always find its own level, hence strong developers will gravitate towards where they is paid more.
- Funding Vs Results – I don’t have a view of Andela’s accounts, financial performance and or traction, but from the information publicly available, Andela began operations in May 2014, raised money from a seed round of $3 million in September 2014, and nother in Series A of $14 million in June 2015 (9 months after the initial raise), Series B of $24 million in June 2016 (exactly 1 year after Series A of $14 million) and Series C of $40 million in October 2017 (16 months after). I sincerely hope, and do believe that the company must be on steroids to require such “massive” capital injection in such close timelines especially from their work outsourcing business, as building offices in 3 locations cannot be said to justify the initial $40 millioninvestment.
- Argument for an Elite Founding Team – My opinion on the capital raising progression of Andela can be linked to the quality of the founders and the country of incorporation of the business. Let’s be clear, Andela is not a Nigerian business (though Iyin Aboyeji will disagree with me). The company is incorporated in the US by founders with diverse nationalities (Canadian, American, Nigerian and a Cameroonian). Andela is an American company with African operations simple! Jeremy Johnson is a super elite founder having founded a business and taken it to IPO. I won’t be surprised that Andela is on the IPO track. Iyin, Ian, Christina, Brice and Nadayar have a long history of entrepreneurship, strong technical background, developed and emerging markets experience, development economics and business experience. I will back a team like this any day any time.
- What changed for Omobola Johnson – I have been hoping that our former minister will write a blog post on why TLCom decided to fund Andela in their Series C round, knowing that as at 28 March 2017 (Few months before the closing of the Series C Round), she was asking who will build an Africa focused Andela. Maybe, she is convinced that Andela is actually Africa focused or Andela is the company best suited for that purpose.
- The Andela Narrative – Andela is a global engineering organization that extends engineering teams with world-class software developers. The company recruits the most talented developers on the African continent, shapes them into technical leaders, and places them as full-time distributed team members with companies that range from Microsoft and IBM to dozens of high-growth startups.
- The Andela Perception – I would have loved to write about this, but the image below summarizes it for me;
Let’s not get too analytical or emotional here. I know that 42 votes on Twitter cannot be said to be representative of the whole African continent. However, before you make a comment on this, please check the trends of opinions written by third parties about the Andela business. Check Radar by Big Cabal Media. Check medium posts regarding this topic and you will see the trend.
Remember I wrote “perception”. This might not be true, but it is left to Andela and its management to either let the perception linger or actively correct it
- Andela is not here to serve the ecosystem, it is here to make profit
- Stop crying wolf about your developers, they will move to where they are being paid the most. Don’t forget, Konga used to be the tech company to work for, but immediately the fortunes turned, developers will look for the fastest exit. If you doubt me, check the LinkedIn profile of the STCs at Andela, a lot of them are from Konga.
- I did not invest in Andela, but I sincerely hope they are executing. Raising $80mm in 3 years is no joke.
- Don’t compare your startup to Andela if you don’t have the quality of founders Andela has. They just fit the Silicon Valley VC profile for what an elite team looks like
- I am waiting for Dr. Omobola Johnson’s blog post on her investment in Andela and what changed in 5 months
- I think Andela should put in greater efforts to correcting the perception about its business. But anyway, what do I know? I have not raised $80mm before.
Covid-19: WHO approves China’s Sinopharm vaccine
WHO has announced the approval of China’s Sinopharm vaccine for Covid-19 vaccination.
The World Health Organization (WHO) has announced the approval of China’s Sinopharm vaccine for Covid-19 vaccination. The vaccine is reported to have 79% efficacy against covid.
This was disclosed today in a report by Reuters. The vaccine would also be the second Chinese-made vaccine after Sinovac vaccine and would be the first developed outside Europe and North America to receive WHO accreditation.
“This expands the list of COVID-19 vaccines that COVAX can buy, and gives countries confidence to expedite their own regulatory approval, and to import and administer a vaccine,” WHO Director-General, Tedros Adhanom Ghebreyesus said.
The WHO added that the easy storage requirements make it highly suitable for low-resource settings.
“Its easy storage requirements make it highly suitable for low-resource settings,” a WHO statement said while also disclosing that the vaccine has been approved for people above the age of 18 to receive two shots.
“On the basis of all available evidence, WHO recommends the vaccine for adults 18 years and older, in a two-dose schedule with a spacing of three to four weeks,” the statement added.
The vaccine was created by Beijing Biological Products Institute, a subsidiary of Sinopharm subsidiary China National Biotec Group, with an efficacy of 79% for all age groups.
The WHO however, admitted that few older adults (over 60 years) were enrolled in clinical trials, so efficacy could not be estimated in this age group.
In case you missed it
The quest for vaccine efficiency got a major boost earlier this week as Nairametrics reported that the United States government announced that it supports the waiver of Intellectual Property Protections on Covid-19 vaccine development, in a bid to boost the fight against the pandemic, and says it will participate in the Okonjo-Iweala-led WTO negotiation to make it happen.
“Mama Taraba”, Former minister and senator, Aisha Al-Hassan is dead
Ex-Women Affairs minister, Aisha Jummai Al-Hassan, popularly known as Mama Taraba is dead
A former Minister for Women Affairs and ex-Governorship Candidate in Taraba State, Aisha Jummai Al-Hassan, popularly known as Mama Taraba is dead.
According to media reports she died in a hospital on Friday in Cairo, Egypt at the age of 61.
Al-Hassan, who was a former senator of the Federal Republic of Nigeria from Taraba North Senatorial District, was the All Progressive Congress (APC) Governorship Candidate for Taraba in the 2015 general elections.
She later contested for the same seat on the platform of the United Democratic Party in the 2019 general elections after resigning from APC and as a minister in the administration of President Muhammadu Buhari on July 27, 2018.
The former senator was born on the 16th of September, 1959 in Jalingo, Taraba State, to Alhaji Abubakar Ibrahim, Sarkin Ayukan Muri.
Aisha Jummai Al-Hassan attended Muhammed Nya Primary School, Jalingo and LEA Primary School, Tudun Wada, Kaduna before proceeding to Saint Faith College (now GGSS) Kawo Kaduna where she studied between January 1973 and June 1977.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.
- Ardova Plc confirms appointment of Oladeinde Nelson-Cole as secretary.
- Cadbury Nigeria Plc set to hold 56th Annual General Meeting (AGM) on June 16.
- FCMB Group Plc appoints Muibat Ijaiya as Director.
- Afromedia Plc reports a loss after tax of N27.3 million in Q1 2021.