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Where Are the B2B Plays in African ICT Start-Ups?

By Wayan Vota on January 13, 2014

b2b-for-ict4d

Recently, Ory Okolloh tweeted an observation I often comment on when I am talking with techies all excited about start-ups in Africa:

There is a real need to focus on enterprise and B2B opportunities for upcoming techies in Africa – too many barking up the wrong tree.

I could not agree more. The hype and buzz in Africa, and in North America, is all about the coolest B2C or P2P play, yet the reality is that real money and very, very big money is in business to business sales.

While there is usually just one B2C sale (a laptop, for example), there are many B2B transactions all along the value chain (from silicon, to chips, to assembly, to shipping, etc). Historically, B2B sales is a better start-up option than B2C too.

When Mat Berg asked Ory for examples, she mentioned logistics, payroll management (to include mobile payments for remote employees), healthcare, manage micro-insurance plans etc. Here are two more examples of big B2B and B2G opportunities that we’ve covered on ICTworks:

  1. Sneakernet Reality of Big Data in Africa
  2. How Nigeria Used ICT to Save 119 Billion Naira

What other missed opportunities do you see in ICT business sales? And why aren’t entrepreneurs noticing them?

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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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5 Comments to “Where Are the B2B Plays in African ICT Start-Ups?”

  1. Mike Dawson says:

    Selling to governments is often a terrible startup proposition (including by extension donor agencies) because the sales cycle is so slow not to mention much more adverse to change generally. Cash flow issues are what actually sink most start-ups. Large companies can resemble governments. Many big open source and proprietary B2B systems have local representation (Cisco, OpenERP, etc). When risk and reward align, markets work.

  2. We think field force management is a growth area in B2B which is why it’s our focus at TaroWorks. I believe managing distribution networks in developing communities also has growth potential but certainly isn’t easy.

  3. Adam Wills says:

    It will be interesting to see whether there is a shift from customer focused to business focused models over time. Certainly, the MDI team at GSMA expects to see growth in B2B models in the coming years as more entrepreneurs using mobile tap into this area. See our free online tracker data which looks at organisations utilising B2B business models in the link below, where we will be supplementing this information as we continue to collect data: https://mobiledevelopmentintelligence.com/organisations/map/countries/sectors/organisations/organisation-types?business_model=business

  4. The growth of B2C/P2P startups is based on eyeballs, press hits, etc… and the successful B2B companies that are customer-focused will be lesser known until they raise massive amounts of capital or the likes of Visa, SalesForce, IBM or Intuit come along and acquire one (see: Fundamo). That being said, the opportunity is huge and some are focusing on this space. Here’s a few examples:

    – Already mentioned TaroWorks is an interesting one
    – Kopo Kopo, the “Square of Africa” let’s SME’s accept M-Pesa in Kenya, recently raised $2.6M and are expanding into Rwanda and Tanzania
    – Vera Solutions builds “data solutions for social change”, i.e. custom Salesforce applications to eliminate the use of spreadsheets

    Human IPO and VC4Africa are two good sources for what’s going on in the startup scene, the GSMA will probably be on the forefront of the mobile and mobile financial services companies that are emerging and look to Savannah.vc (Erik Hersman & co.) to lead the charge on investments in B2B business out of East Africa.

  5. Luke Kyohere says:

    In my opinion, historically, the majority of African ICT startups have been B2B focused – perhaps because it’s a better startup option than B2C as mentioned by the OP. They’re just not on the “buzz” radar and they seem to be locked out of the startup eco-system because they’re neither SaaS nor mobile nor web 2.0.
    There are lots of small business ICT services & consulting startups; web, graphics design and hosting firms; small firms innovating with e-accounting, e-filing and e-registration (even just as proxies for the new government e-tax systems), call center companies. There are numerous SMS & voice value added service providers (perhaps too many)… The list goes on. How do we bring them into the fold?