Smart Africa: Big-data tools transform business

For the past 50 years, the scattered, unreliable state of data about African business and finance have deterred access to capital and hampered growth.

Now, an array of big-data tools have sprung up to help transform the process for a multitude of users, including farmers, small-business owners, policymakers and international stakeholders looking to invest in the continent.

“You used to have to go and spend an enormous amount of resources to go on the ground and get information about potential investments or business partners,” said Greg Cohen, co-founder of Asoko, the Africa-focused data company.

In November, Asoko raised $1.3m in seed funding from North Base Media, whose partners include the former chief operating officer of Reuters and the ex-managing editor of the Wall Street Journal. The company will use the funds to deepen its research and analysis of more than 1,000 privately held companies across the continent and reduce the cost of doing business.

Asoko’s fundraising followed Knife Capital’s launch in September of YueDiligence, an automation platform that helps start-ups become “investor ready” by making the initial due diligence process quicker and cheaper.

Another company trying to facilitate investment is Gro Intelligence, which provides data analytics on agriculture markets, from basic information such as the production of a country’s most important crop to weather and environmental analyses.

Sara Menker, chief executive of Gro Intelligence, said understanding of agriculture has been “stuck in the 1960s for years”, but “today you can create really interesting data products that very large numbers of people can access easily, and it doesn’t have to be limited to a select few who have the ability to pay a lot.”

Since it was founded in 2012, Gro Intelligence has expanded from an exclusively African focus to cover markets around the world. But Menker warns against getting caught up in the excitement that can surround any positive news about African business.

“There is a lot of hype” around the African venture world, Ms Menker said, adding, “there are many who are interested but not quite ready to pull the trigger on actually investing, or the size of the cheques are too small.”

Despite an increase last year, information technology has still accounted for only 10 per cent of seed investments across Africa since 2007, according to data from the AVCA.

Ms Menker said that in the past, the lack of Africa-based funds had been a problem, but some of the continent’s largest companies had now established internal venture capitalist funds.

Safaricom, a Kenyan mobile network that launched the mobile banking service M-Pesa, set up its Spark venture fund in 2014.

The fund will offer Kenyan start-ups investments between $75,000 and $250,000, and made its first investment in November, investing an undisclosed amount in on-demand package delivery service Sendy.

In December, Safaricom was joined by WeChat South Africa, the messaging app backed by Naspers, which has announced its own $3.5m fund to support more tech start-ups.