- Title: NIGERIA-YABA TECH HUB Nigeria tech enclave springs up in Lagos suburb
- Date: 28th July 2015
- Summary: LAGOS, NIGERIA (FILE) (REUTERS) VIEW OF RECEPTION OF JUMIA ONLINE RETAIL COMPANY WITH A BANNER ON THE WALL READING: "JUMIA, NIGERIA'S NO 1 ONLINE RETAILER" VARIOUS OF MARKETERS WORKING ON COMPUTERS
- Embargoed: 12th August 2015 13:00
- Keywords:
- Location: Nigeria
- Country: Nigeria
- Topics: General
- Reuters ID: LVA86UZXFOZ786DN33C5LED8N115
- Aspect Ratio: 16:9
- Story Text: At first glance, Yaba is like many other parts of Nigeria's sprawling commercial capital: a cacophony of car horns and shouting street vendors, mingling with exhaust fumes and the occasional stench of sewage.
But in between the run-down buildings in this seemingly inauspicious part of Lagos, a city of around 21 million, tech start-ups are taking root and creating a buzz that is drawing international venture capitalists and more established digital firms.
Online retailer Jumia, a would-be African Amazon, has set up shop here and is betting that it can propel the continent's rising middle class consumers out of the street markets and straight onto its websites.
Nicholas Martin is the chief executive at Jumia.
"Lagos has the potential to become something that is relevant and on the map in the global scale. Something that is maybe not today, maybe not tomorrow will compete with Silicon Valley but being perceived and recognized as the African equivalent of the Silicon Valley. It's gonna take time, it's gonna take support, its going to take a lot of infrastructure work because there is still a lot of work to be done. But the full amount of potential is here, the market is here, the appetite is here. We have started to also seeing a strong flow of repatriate talents coming here and irrigate that hub, so Lagos is actually very hot and that drives Yaba," he said.
Yaba draws on a pool of talent from the nearby University of Lagos and Yaba College of Technology.
African tech centres are a recent phenomenon that mix web business concepts borrowed from other parts of the world with start-ups focused on African problems to create opportunities in areas such as mobile payments and e-commerce.
Notable examples are Kenya's 'Silicon Savannah', South Africa's 'Silicon Cape' and Rwanda's 'kLab' in Kigali, but in many instances they struggle to achieve critical mass by giving birth to the few successful start-ups that will in turn attract more talent and money.
However, Yaba also has a growing number of established tech companies, underpinning hopes that the area, where rents are relatively cheap, might breed success.
Africa Internet Group, backed by Germany's Rocket Internet, South African mobile phone giant MTN and Sweden's Millicom, moved six of its tech firms, including Hellofood and Easy Taxi, to Yaba last December.
"Moving to Yaba was then, among other mainland areas was then a good choice because its a very dynamic environment, we actually...all the offices we visited were in Yaba. Dynamic because we knew the ecosystem of ventures, of startups here was really thriving. The presence of UNILAG (University of Lagos) as well is important for us because we recruit a lot of people. If you look at my staff behind me, probably sixty percent of them come from UNILAG so they know the area well, they have good network of friends that we recruit or that we hire for ambassadors," said Guillaume Leblond, managing director at Hellofood.
Investors have taken an interest in several start-ups based in the district in the last few months.
In May, Nigerian hotel booking company hotels.ng got seed funding from the EchoVC Pan-Africa Fund and the Omidyar Network, founded by eBay mastermind Pierre Omidyar.
The potential market size of Africa's most populous nation makes Nigeria, with around 170 million people, an attractive location.
The gross domestic product of Lagos state alone, for example, is bigger than the entire economies of Kenya or Ghana.
However, Yaba started life in a similar way to other African tech enclaves in 2010, with one building earmarked as an incubator for talent supported by overseas investors, in this case the Co-Creation Hub (CCHub), backed by the founder of eBay.
The government chipped in with another building in 2013, the Information Technology Developers Entrepreneurship Accelerator (iDEA), for would-be entrepreneurs to get access to docking stations, meeting rooms and mentors.
Google and Microsoft ran coding workshops, while a deal between CCHub, the Lagos state government and local telecoms firm MainOne brought cheap high speed Internet via fibre optic cable.
"You won't find warehousing space in Yaba, you won't find warehousing space that is big enough to host a company like the size of Jumia. Jumia is by any measurement not only the biggest e-commerce and also the biggest retailer of the land and therefore we just need warehouse space and that ware house space, as long as I can keep it tight and tied together with the office space I will," said Martin.
Even though it is Africa's biggest economy and top oil producer, Nigeria's Internet speeds and network coverage have lagged behind other countries such as Ghana and Kenya. But that in itself is an opportunity, with a 2013 report by consultancy McKinsey suggesting that only 1.5 percent of Nigeria's nearly $500 billion economy took place online. - Copyright Holder: FILE REUTERS (CAN SELL)
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