Pictured above: Innovate Ventures Demo Day in Hargeisa, Co-founder Dr Abdiqani Diriye (Source: BiznisAfrica)
Somaliland’s diaspora is one of Africa’s most engaged diasporas in terms of investments in Somaliland’s private sectors. Somaliland’s government officials often make a point of praising Somaliland’s diaspora for the role it played in building the country from bottom up by investing in real estate, launching businesses and hotels and restaurants. Members of Somaliland’s large diaspora include founders of world-class FinTech companies such as World Remit. Ahmed Ismail, the Somaliland-born founder of World Remit has touched on how his experiences in Somaliland vis-à-vis remittances inspired him to launch World Remit. Other successful start-ups that were founded in Somaliland and expanded into nearby markets include Gulivery, also known as the Deliveroo of Somaliland’s culinary scene.
It is with this in mind that in recent years, Somaliland’s economy has seen an emergence of investment and business opportunities within major commercial cities such as Hargeisa, Burao and Borama. This growth in Somaliland’s start-up scene has meant that start-up accelerators have seen phenomenal growth and attracted significant attention.
One such example is Innovate Ventures founded by two driven members of the diaspora, Abdigani Diriye who is a research scientist with IBM and Warda Dirir an Imperial University graduate. Innovate Ventures launched in Hargeisa in 2012 as sees itself as an accelerator which supercharges Somali start-ups by providing coding camps, mentoring and critically needed funding. Innovate Ventures has a 12-week long Tech Accelerator Programme supported by partners such as the leading Pan-African Venture Capital platform VC4Africa and Telesom, Somaliland’s leading telecom operator. Start-ups apply to join the 3-month accelerator at the end of the accelerator, start-ups showcase their product to angel investors and other potential investors. Funding includes $15,000 worth of equity investment offered by Innovate Ventures. In a country with a very high levels of youth unemployment there is intense competition with less than 7% of start-ups selected for the accelerator.
Nevertheless, there are start-ups which graduated from Innovate Ventures accelerator programme to become leading companies in Somaliland’s growing start-up ecosystem. One such start-up is “Muraadso” a hybrid (online to offline) e-commerce platform that provides consumers with cheaper products through a lower cost structure and by utilising third party sellers. Muraadso is a perfect example of a start-up tailoring itself to Somaliland’s economic conditions and specific consumer characteristics. Aware that Somaliland’s internet penetration is much too low for online to online e-commerce to succeed, Muraadso was able to focus on opening bricks and mortars stores where consumers could come in and try electronic goods before buying them. In another example of Muraadso tailoring its business model to consumer tastes in Somaliland it offers mobile banking as a medium of payment through Zaad which has an 80% penetration in Somaliland. Such are the opportunities in Somaliland’s consumer technology space that Muraadso has gone on to open half a dozen stores throughout Somaliland. In the process it has also created jobs that did not previously exist for dozens of people. Even more exciting for potential investors in Somaliland’s nascent start-up scene, Muraadso has gone on to reach over a million dollars in sales since its commercial launch. It is now in the process of launching a second round of funding for angel investors interested in opportunities available in Somaliland’s consumer market.
Another successful graduate of Innovate Ventures accelerator programme is “Brandkii” a business-to-business (B2B) digital marketing agency that utilises data intelligence to help Somaliland businesses achieve their targets. Similar to other successful start-ups in Somaliland, Brandkii is fast expanding launching initially in Borama and then later expanding to Hargeisa with plans to expand to other regional markets in the near future. Somaliland’s emerging start-ups are increasingly outward looking which will benefit investors as start-ups are always on the lookout for a bigger pool of consumers to target.
All in all, Somaliland’s start-up scene is fast emerging and it already has some of the most exciting start-ups in the consumer and B2B base. For investors, the opportunities are endless as Somaliland offers conducive conditions for growth including a tech savvy, young population and an integration of mobile banking into everyday life. As showcased by Innovate Ventures, Somaliland already has accelerators and venture capitalist funds showing interest in Somaliland’s ever-growing start-up space. The real opportunity for investors is based on the potential of Somaliland’s start-ups to expand to nearby markets such as Ethiopia which boasts a population of over 105 million potential consumers. If one of Somaliland’s business-to-consumer (B2C) start-ups is able to penetrate and succeed in Ethiopia, this will bring in potentially hundreds of millions for eagle eyed investors.
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Exciting to see growth in entrepreneurship in Somaliland!