Thursday, July 11, 2019

Are Tech Companies Africa’s New Colonialists? | FT (via Medium)

Article summary: "Foreign-owned start-ups are driving an African tech revolution — and prompting old fears of exploitation"
"Far from helping Africa, says Enonchong, Jumia and companies like it are throttling Africa’s homegrown tech industry at birth. That is because of what its critics say is the great unspoken advantage of such companies: their access to capital. “I don’t see any African start-up that would be permitted to lose that kind of money,” says Enonchong, referring to the near $1bn that Jumia burnt through in seven years on its way to listing. “That robs Africans of an opportunity to be the first,” she says, arguing that many African start-ups have been steamrollered out of existence because of their inability to match Jumia’s deep pockets.
A 2018 study of start-ups in east Africa confirmed that 90 per cent of funding had gone to foreign founders. Many African entrepreneurs complain that foreign companies use a false African identity as a marketing tool, raising capital on the basis that they are “doing good” through “impact investing”, but in the end cashing out like any savvy capitalist."
Are Tech Companies Africa’s New Colonialists? | FT (via Medium)

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