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Africa is where China was 20 years ago. The degree of digitization and connectivity is at the level where Europe was 15 years ago. That's what's happening now.
It is now that it is being built up, out and about. The whole ecosystem is growing so fast. In 2050, the UN predicts that Africa will house three of the world's largest cities, while the population is double that of today. It will be a young and hungry population. Hungry for development. When you see what the rest of the world has, you want the same thing. With mobility, inclusion and justice are created, and never before have foreign investments and international venture capital been as big in Africa as in 2021.
At the beginning of 2022, the news of Norrsken22 was launched. Norrsken's founder Niklas Adalberth, in collaboration with several other highly successful tech entrepreneurs, is launching a fund of 200 million US dollars to support the ongoing tech development in Africa.
Africa's largest hub for startup companies and tech entrepreneurs
In parallel with the fund, Norrsken Kigali House in Rwanda opens with the ambition of becoming East Africa's largest hub for startup companies and tech entrepreneurs. The manager on site, Pascal Murasira, sees enormous opportunities in what is happening right now.
"The really big growth in the future will take place in Africa. It teems with ambitions and initiatives. There are many people here who both want and need a change. I want to be involved and contribute to economic development. For real. I want to create jobs."
However, across the entire African continent, the level of indebtedness is high today. In addition, many countries have an increasing degree of credit from private lenders, which increases vulnerability to increasing interest rates and inflation.
Development and value that remains in the region
In the past, most large government loans have been with institutions such as the World Bank, which has also been very generous with depreciation.
Private lenders, on the other hand, do not have the same interest in reducing the countries' debt/equity ratio, which is why the economic recovery as a result of, among other things, the pandemic is currently a bit difficult to assess.
"The important thing for Africa is that it creates development and a value that remains in the region. Historically, the focus has been on extracting natural resources, which have then been exported without creating any significant added value for the African continent. What is needed is capital and investments to start and develop businesses that survive in the long run. But money is not enough. Networking, experience, mentorship, and skills transfer are also needed."
The latter is what – according to many – played a crucial role in tech development in innovative environments such as Silicon Valley, Taiwan, and Israel. The entrepreneur needs a context to grow and operate in. Contacts. Lessons from others who have already made the same journey.
"You have to be extremely generous. Almost everything is about sharing what you have. With the investment in East Africa, we want to build capacity and robust systems. The vision is that the fintech companies that we support today – and which form a base and a foundation in the financial ecosystem – within 5-10 years will have developed to such an extent that they drive the economy and thus further contribute to financial inclusion in Africa. Today, it is very much about building basic payment systems. In a few years, for example, the expansion of insurance systems will follow."
A really great aha experience
Norrsken is now gradually opening up its house in Rwanda's capital Kigali. A couple of hundred people are already working on the premises and taking part in purely practical things such as a desk and an internet connection. The ambition is to offer around 1000 entrepreneurs and innovators the opportunity to work on-site within one year.
"Above all, we want to put their energy in the right direction. You need other people, and you need inspiration. I had a really big aha experience just over 20 years ago when another company, which has come further in its development, showed how my own small business could be scaled up with the help of software and digital solutions."
Pascal grew up with six siblings on the family's small farm in Rwanda. Early on, interest arose in developing solutions in what is called agro-processing. With the support of foreign capital, his small business developed, but pretty soon, the family left Rwanda for the Netherlands.
"I continued my work in the agritech area and eventually came in contact with Swedish entrepreneurs and worked for a time with the company Addressya, which develops address systems in developing countries with digital technology. A necessity to be able to work at all and to be able to take part in their civil rights."
Influence people's lives in the right direction
In 2016, Pascal was contacted by a British company active in the health sector. Together with them, he developed an application that can create access to healthcare even in the most remote and isolated areas.
"This was another real eye-opener for me. With a combination of state-of-the-art technology and traditional door-knocking on site, we managed to create contact with healthcare for almost 500,000 people in Rwanda in just six months. People who have not previously been part of the system due to the lack of medically trained staff where they live, and/or far too long distances to the nearest major hospital."
With the app and technology also comes lower costs and great opportunities for increased quality and follow-up.
"I've now realized that this was exactly where I wanted to be. In large-scale solutions that deeply affect people's lives in the right direction."
And, so it has continued. At the beginning of 2021, Pascal was recruited to Swedish Norrsken and became responsible for operations in Rwanda. A country that – despite its difficult political history and where large sections of the population still live in scarce economic conditions – has great ambitions to develop in a way reminiscent of Singapore.
"The whole of Africa is currently undergoing major changes with the support of digitalization and increased mobility. In East Africa, for various reasons, there are particularly great opportunities right now in fintech, health tech, agritech, and editech. As an investor and innovator, you can get involved in this region for various reasons. In Kenya, for example, there are perhaps Africa's most developed mobile payment systems through their Mpesa, which is why it may be better suited for fintech companies that have come a little further in their development. While if you have a more radical idea and need a "proof of concept," Rwanda can be a strong alternative. It all depends. Uganda has its advantages and challenges, while the Democratic Republic of Congo has completely different ones."
The dream of more African unicorns
According to Pascal, what is happening – and must continue to happen – is that the digital infrastructure and digital ecosystem now being built up with public and institutional funds in Africa must be strengthened with private initiatives and investments to create sustainability in the longer term.
"There are currently maybe 700 so-called unicorns in the world. That is, private startup companies valued at at least one billion US dollars. In total, seven of these are in Africa. That is almost half of what is only in Stockholm. So… my dream is that one of the entrepreneurs, ideas, and innovations that we invest in today, in 10 years like the unicorn can dazzle the outside world with its golden horns, hooves, and its powerful mane."