When Potential Unicorns was first written, the objective was to share with the tech community on existing startup opportunities in Africa whose startups could potentially grow into unicorns (hence the name Potential Unicorns). That was before any of us had heard of Covid-19 or even had a figment of imagination that the world would be brought to a standstill by a pandemic.
Africa’s startup ecosystem has been scaling rapidly and it may seem the pandemic has slowed down everything when in fact it has been a tailwind to some technology startups as it has accelerated the shift to online commerce. All the tech laggards have now been forced to embrace technology. Certainly, economic activity was slowed down, many businesses shut down and many workers were laid off, but amidst the recession, it shouldn’t be all doom as history shows us the best companies were born during times of crisis. Now more than ever, an increasing number of professionals are looking to venture into entrepreneurship.
Therefore, Potential Unicorns has more startup opportunities to share with the community. These may not be potential unicorns but startups that could easily grow into multi-million dollar businesses. Read the full comprehensive guide for the following 20 startups.
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A Startup for Matchmaking Life Partners
Africa has a dominantly youthful population. Many of them are looking forward to getting married. Unfortunately, a big gap has existed on the market for far too long that needs fixing. This is fortunate for you as an entrepreneur.
It’s often said that the most important decision you will ever make in your life besides choosing your career is deciding the person you will spend the rest of your life with. Getting married to the right person is so much better than choosing to remain single as you can achieve so much more in life as a couple than if you had chosen the lonely path. On the other hand, getting married to the wrong person can lead to a life full of regrets that will completely drain you hindering you from achieving even a fraction of what you will have managed had you chosen to remain single. Are people meeting the ideal partners for themselves? The reality is divorce rates on the continent are on the rise, the baby-daddy baby-mama trend is fast infesting the African culture, and way too many people are stuck in marriages they regret getting into. Can we leverage technology to help alleviate this pain? Happy families are the foundation of a prosperous society. It is for this reason that this startup opportunity is appearing as the first one among all the 20 covered here since addressing this problem could have the greatest positive impact on society.
Let’s look at the design of this startup. This startup is meant for people with the sole objective of being in a relationship that will lead to marriage. Not any other objective. That's the least addressed niche within the entire dating/social market. Finding people with this similar exact objective is a real pain point. Firstly, the many dating apps available in the market—Tinder, OKC, Bumble, Meet4u, etc—have been infiltrated by people with commercial interests seeking one night or short-term gigs. They have many fake profiles making those platforms unsuitable for those seeking genuine serious partners. Most people are still depending on offline methods which have been the norm over the years. But these are largely based on luck more than anything. You see, people have been sourcing for their life partners from within their circles. This could be through friends from school, colleagues at work, neighbors from their neighborhood, relatives from extended family, or fellow church members. If the person turns out to be their perfect partner for the many years they have enjoyed in marriage then it’s simply by good luck that their perfect partner happened to be within their circles. For the rest of the population, their partner is the best they could find from within their circles and if their union ends up regrettable, they were simply not as lucky. The question then becomes how do you increase your luck surface area? Do you have to stop & talk to every guy/girl you meet on the street, corridor, gym, supermarket, bar, club or concert? But then, no one walks with the word ‘Single’ printed on their forehead. Also, some people are not comfortable with being approached by strangers on the streets. Can we use technology to improve the odds of meeting your ideal partner by a factor of magnitude?
Interestingly, human beings have figured out a way to pack 11.8 billion transistors into an iPhone chip, and how to precisely navigate a spaceship to land on a drone ship in the Atlantic Ocean while its payload docks at the International Space Station, but are completely super clueless on how to help people meet their right life partners/dock them to their soulmates. You know why? It makes perfect sense, financially, to put the smartest people in a lab and bankroll them with unlimited funding to figure out how to develop the best chip, but it is not financially lucrative to put the best brains to research on how to help humans find their most compatible partners. That’s capitalism—allocation of resources is prioritized on what will make the most profits, not the welfare of humanity. Only when Tesla proved it was a financially viable venture did you see all the money pour into its stock, not because it was trying to tackle climate change. That’s digressing. But it leads us to the most important part about this startup that cannot be ignored—its business model. For it to survive the world of capitalism, it must make sense financially. The design of this startup is closely intertwined with its business model.
As a new entrant to the market, it must overcome all the shortcomings of the current players. First off, this startup will be a hybrid of both the online and offline worlds. Therefore, cases of fake profiles and catfishing like it happens on Tinder/FB/IG will simply not be there. Certainly, this shortcoming is not present when using match-making agencies operating in this market, however, the scope of these boutique businesses is quite limited. This startup will make it work at scale resulting in a better product offering for everyone. Let’s now cover the full details about this.
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FinTech for Group Payments
Africans have a stronger sense of community and a sharing culture than the rest of the world. While digital payments have undergone fast adoption on the continent, they are yet to fully embrace this sharing culture leaving a gap in the market to be addressed.
Fintech has been the hottest space in Africa’s tech ecosystem with startups like PayStack, Sendwave and DPO Group realizing multi-million dollar exits while others like Cellulant raising jaw-dropping figures from investors. There are many players in this field. However, none of them is yet to offer an effective solution to fill this gap in the market. That is, pay as a group.
This is the exact solution offered by Pay By Group and SharePay. Refer to their websites for these insights. With this fintech solution, one can instantly split the cost of purchase of any product among several individuals and have each one of them pay their share for that transaction. You can instantly split any bill either equally or unequally amongst your friends and let each one settle their part of the bill from their individual mobile wallets.
Currently, if you want to pay for something as a group, one member has to go around collecting money from the other members and after everyone has made their contribution, the sum amount is used to settle the transaction from an individual account. In some cases, one person volunteers to pay the whole amount with the promise that later on the others will refund him their part of the bill. Not many of such promises are honored and as a result, many friendships have been strained or broken altogether. There are instances when the person who was in charge of collecting money from the other members disappeared with all the money. There is the pain and the discomfort that comes with having to turn to your best friends and ask them for money especially when they seem to be slow in making their contributions or you have to remind them that they still owe you money from a past escapade. This fintech product will do away with all this friction.
The exciting part about this fintech offering is the implications it's going to have on the entire African economy. Given that the continent is largely made of a youthful population, and has a strong sense of community, this fintech product will drastically reduce the cost of accessing “shareable” products. More people will suddenly be able to afford what they see as expensive from an individual standpoint. Imagine a group of N college students staying in the same building or recent graduates sharing apartments adjacent to each other. With this fintech product, the cost of cable internet suddenly becomes 1/N the price, subscribing to Netflix becomes 1/N the price, using a common address they can onboard Jumia Prime membership at 1/nth the price, buying high ticket items that are shareable like PS5 become 1/nth the price, and even in the hospitality industry paying for the Group packages will become hassle-free. Therefore an AUTOMATIC system that enables you to purchase online with multiple people by splitting the cost is a game-changer.
Let’s look at the design of this fintech offering. This is where we take it a notch higher from what you have seen from the websites of Pay By Group and SharePay. It’s not feasible to approach every merchant and ask them to add a SharePay button on their checkout page. That path won’t lead to much success.
When you’re a fledgling startup no one takes you seriously. Imagine a small startup from Africa trying to book an appointment with Reed Hastings because they want to convince him to add a SharePay button on Netflix as it will boost the number of young Africans binge-watching Netflix Shows since they'll now easily split the cost of the subscriptions amongst themselves. You will be so lucky to be even granted such a meeting. You need to come up with a different design strategy.
Here is how to go about it. You don’t need to approach any merchants to request them to incorporate this feature on their checkout pages. Instead, you can overlay a second interface that will work with what they currently have. By this, you create a virtual card that is linked to multiple mobile wallets. (Linkable to several accounts). So during checkout, a customer will fill out the details of this card like they normally do with Visa/MasterCard/Amex but in this case, what’s actually happening in the background is that the card charges the linked mobile wallets split-cost of the transaction. The 2nd interface here is that of your startup displaying the virtual debit card and members invited to participate in the transaction. By accepting the invite, the members are automatically charged their share for the transaction simultaneously in real-time at checkout. Confirmation emails/SMSs are sent to all members on a successful transaction. Picture friends at the end of an Uber ride, whip out their phones to split the transaction cost in an instant, and settle the payment within seconds.
The real challenge is how to introduce this fintech product to the market and accelerate its adoption. Peter Thiel and Elon Musk struggled with introducing PayPal to the market until they made a breakthrough discovery from eBay. Their initial assumption that PayPal would find an enthusiastic user base from Western Union customers did not go as planned. With such lessons in mind, how would you go about introducing this fintech product to market and realize exponential growth? Let’s now cover all the details about this startup.
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EdTech for Discussion Groups
The pandemic has normalized online learning. Many EdTech startups offer study materials and tutors to help learners with their homework, however, a gap still exists to recreate group study typical in many learning institutions.
The new normal has resulted in many students being introduced to online learning which also fueled the exponential growth of some EdTech startups. All these startups adopt different formats. When it comes to learning, there is no one-size-fits-all approach—each student chooses their own preferences. One of the choices that is lacking is one whereby learners can get together and discuss a concept they are currently studying. Different students will have different views on group discussions. While some may not be so enthusiastic about it, others find it as a very effective learning method and often use it offline while at school. It is this category of learners that this startup is designed for.
How do you go about recreating a similar or even a better experience in an online setting to facilitate learners having robust group discussions? PrepLounge has the best version of what this startup could look like only that their product is not for students but for professionals prepping for case interviews at top consulting firms. Read on to learn about this.
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A Day in the Life of..
The Education system in Africa forces students to choose their career paths even when many have no clue what the career they have chosen entails. Many have ended up regretting the careers they chose when it’s too late.
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Most tertiary institutions in Africa are quite inflexible in their course offerings, requiring learners to select the course they will pursue and stick to it through to graduation. In some competitive fields, employers would hardly consider applicants who did not study a related course. This situation, therefore, places a lot of importance on the decision a student makes before joining a tertiary institution, which is usually right after high school. At this stage in their lives, many students would have had very little exposure to the careers they are being forced to decide on. That’s where this startup comes in, to address this gap in the market.
This startup matches professionals with years of experience under their belt to recent high school graduates evaluating which career paths to take. The professionals, who would have been vetted by the platform, elect to spend a full day at work with the student right from when they have to report for work to when they are done with the day’s work so that the student can get to learn a firsthand experience of a day in the life of..(an account/a lawyer/an engineer/a journalist, etc). This kind of exposure should give the student a level of clarity in which they can ask themselves do they really wanna spend their adult lives like the professional they just spent the day with?
Let’s explore the business model of this startup and how you can go about executing it into reality.
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The Undisrupted Construction Sector
Many countries in Africa have major construction projects going on both in public and private sectors. Collectively, a huge army of construction workers wakes up every day to build the future of Africa. While tech has disrupted many industries, the construction sector remains largely undisrupted.
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Many countries in Africa are in their development phase and big construction projects are underway across the continent employing a huge army of workers. While many areas in the construction industry can be disrupted, one that sticks out is the welfare of these construction workers building the future and dreams of the continent. These workers operate in risky environments prone to injuries yet they have no insurance cover for any accidents that occur while at work. These workers earn meagre daily wages making it next to impossible for them to pay for their own insurance. Unfortunately, for those who accidentally get injured while at work, lose their income and the medical expenses put a strain on their household. The world needs more empathy. These workers can be protected so that they can keep building the future for the continent.
Let’s learn how this startup can achieve this without asking for any cent from the construction workers.
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Opendoor for Africa
Many people in Africa are building or buying a new property. However, the experience is not so pleasant for homeowners selling their ‘used’ property.
Opendoor made its debut on the public markets on NASDAQ through SPAC. It has brought serious competition to longstanding incumbents like Zillow. It’s already upending the property market in US cities it is operating in like Phoenix, AZ.
For those who don’t know Opendoor; say, you desperately needed cash and wanted to sell your house within a week. Opendoor will make you an immediate offer and you will have that money in your bank account the same week. They will keep your property until they find a buyer for it. They can upgrade your property and make a bigger profit from that transaction. In Africa, if a homeowner wants to sell their property, they can stay in the market for months before they find a buyer. Should you have to wait for that long to get the money? Introduce Opendoor in Africa. Here is what you should know about transplanting this startup on the continent..
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A Startup for Domestic Tourism
Domestic tourism is a huge untapped market in Africa. Travel agencies offering tour packages have thrived from a growing middle-class, however, those packages are out of reach for many households. Upend the business model to unlock this huge market.
The United States is a consumer-driven economy and you know the secret that unlocked the high spending by households? Credit cards. Americans have access to many credit cards, they are spoilt for choice. It’s not surprising to find someone with four credit cards in their purse. To some, the FICO score is such an important metric that they’d rather buy on credit than pay cash for small things they can afford just to maintain a high credit score. Credit Cards are such an important part of their lives.
There is a critical observation to be noted from the US. This is not about keeping folks in perpetual debt from credit cards. It is the new currency credit cards introduced that is the lesson to be drawn from the US. This is the points system. People use points from their credit cards to pay for a vacation. Simply from their normal spending, people earn points they can redeem for a tour package. Convincing them to pay out-of-pocket for the same package could be an arduous task. This is the concept this startup is bringing to Africa. That an average African household shall be able to afford a tour package simply from their normal spending without having to fork out extra cash for it. Unfortunately, Africa has a very low credit card penetration rate. So how would you introduce a point system that tracks their spending and achieve the vision of this startup? This is a great design thinking assignment. Let’s now dive into that.
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Farm to Kitchen Healthy Living
Lifestyle diseases are on the rise in Africa and more people are becoming conscious of the importance of eating healthy food. While modern technology in farming and the food value chain has improved food security, the emphasis has been on quantity more than quality. Here is what is lacking and a ready market for it.
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It’s now possible for farmers to quadruple their yields and increase the shelf life of their produce thanks to advancements in farming technology, earning bigger bucks in return. It is consumers who are disadvantaged from this, having to pick from the shelves products grown with chemical inputs, some of which are detrimental to the body. Some people are conscious of the kind of groceries they pick at these retail spaces but it's still almost impossible to tell which products, after going through the supply chain, come out devoid of chemicals and are healthy for consumption. The rise in online shopping and home deliveries means many people don’t have the chance to make the picking themselves. For the health-conscious consumers who desire produce that is purely organic and guaranteed not to have come in contact with chemicals, where do they turn to?
This startup is labeled farm to kitchen because it is not going after one part of the value chain, but the entire vertical. For this class of consumers who are willing to pay a premium for healthy food, you are guaranteeing to grow their food without any chemicals and supply them to their kitchens on a regular basis (on-demand). Your startup will handle everything including sourcing for the right seeds, planting and growing the crops on the farms without the use of any chemicals, and supplying the farm produce directly to your customers in the freshest state possible. Drone delivery technology is still in its infancy, but soon you will be able to have your customers push a button then you harvest groceries from the farm and have them delivered at their doorsteps in minutes. Let that find you as an established player in the market.
The value proposition of this startup is that this is a much cheaper insurance to have than shoulder the fat medical bills associated with chronic diseases stemming from eating GMOs and chemical-laden foods. The middle-class in Africa has been growing fast over the years and this startup will have a big addressable market that will be willing to pay monthly subscriptions for healthy food supplies to their kitchens. For produce requiring post-harvesting storage & milling like cereals/grains, your startup shall handle that in a manner that guarantees the safety of the food. Let’s now dig deeper into this startup..
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What is Lacking in the Medical Field
The market for medical care in Africa is huge. Already some startups are operating in this field but some gaps still exist.
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Africa’s 1.2 billion population exerts pressure on the few medical facilities available. Long queues are frequent at some hospitals. Affordability remains the biggest impediment to accessing medical care. Learn how you can use tech to create value for those seeking treatment.
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What is Lacking in the Legal Field
Before Artificial Intelligence catches up, lawyers will continue to make big bucks from their clients. While the legal profession largely remains undisrupted by tech, some areas could be democratized.
Can you leverage a legal mind?
Imagine if a pilot could fly only one passenger at a time, how many pilots would we need? If a teacher could teach only one student at a time, how many teachers would we need? If a truck driver could only transport one cargo at a time, how many drivers would we need? The reality is, at any given time, there are many passengers heading in the same direction, many students learning the same concept, and a lot of cargo heading to the same stop. If only one passenger could be flown at a time, flying would be too expensive for most people to afford. If only one student could be taught at a time, education would be too expensive for most students to afford. If only one cargo could be transported at a time, most goods would be too expensive for us to afford.
Let’s now turn to the legal profession. Lawyers can only deal with one client at a time. Can most people afford it? You know the answer. What areas in the legal field can you find “passengers heading in the same direction, students learning the same concept and cargo heading to the same stop”? Have this conversation with a lawyer.
The startup that shall be able to design a solution that will democratize legal services, making them affordable to the masses, will have unlocked a huge untapped market. Presently, the number of people in need of legal counsel but cannot afford it is quite high. Let’s dig deeper into this.
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Robocomedians
Create value at the waiting areas.
Many businesses, corporations, and government institutions have services they have to offer in-person to their customers. People usually have to wait in line for their turn to be served, which is not a pleasant experience for most folks. The longer the wait-times the more unpleasant it gets and often people have to find something to distract themselves during this ‘idle time'. You can create value for these businesses at their waiting areas (banking halls/airport lounges/waiting bays). Thanks to advances in technology, you can now keep their customers happy during the waiting period through this—the humanoid robot.
By simply acquiring the same hardware, you can feed into the software your own creative customized speeches and comical moves that you can keep updating with time. Depending on the business, the robocomedians will entertain/relay vital information to the customers at the waiting areas. Some 5-star hotels are already using these humanoid robots to welcome their guests.
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Clothes Rental
Millennials have embraced the trend of renting stuff rather than buying them.
Some special occasions do not occur regularly but require one to look the part. One can choose to buy an expensive dress for the occasion after which it will gather dust in the closet before it is worn next or decide to rent the same dress for only a fraction of the cost. Millennials are becoming more comfortable with the latter thanks in part to the trend of millennials choosing to take an Uber than buy a car or rent an apartment than buy one. Millennials and GenZ value experiences/good memories over material possessions. Learn how a startup in clothes rental can position itself to reap from an expected increase in demand in this space.
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Toys R Us
More babies will be born in Africa than on any other continent. In Nigeria alone, more babies are born than in entire Europe.
While some developed economies are dealing with an aging population, Africa is having a baby boom and over the next decade, more babies are expected to be born out of Africa than India and China combined. Kids love toys but the reality for some African households, affording all the toys their kids desire is a challenge. Rather than sell toys, sell the experience. That is flipping the business model of Toys R Us. Parents will only need to pay a small fee for their kids to play with any toy they want at your chain of dedicated gaming halls.
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African Languages
Westernization has fast been sweeping across many African countries. Rising Rural-Urban migration will see more Africans brought up in cities detached from their native languages.
Africa has a rich heritage. There are more than 2000 languages spoken on the continent. Some of these languages face a threat of disappearing into extinction as more people adopt western lifestyles. While people can visit museums to learn more about their past, there will always be that curiosity of those who want to know how to speak a few sentences in their native languages. Those brought up in the cities may not have the privilege of learning their native languages from their older relatives in the villages.
With inspiration from LingQ, design a similar platform where they can learn the basics of their languages. This platform will also be useful to those who want to learn a different language from their own. Since Africa is the future, many folks from outside the continent with interests in Africa will want to learn a few phrases of some African languages. There’s also a significant number of Africans in the diaspora who would want to teach their kids. The more westernized people become the more they will miss their heritage and want to learn these languages. Here is what you must keep in mind.
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Create value for public transport users
Many people rely on public transport for their daily commute. Make the experience better for them.
Out of all the startups covered here, this one has the largest market value and is the most lucrative. So many people use public transport and are not happy with the experience. Learn how to create value for these commuters and bring a pleasant experience to everyone.
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What follows now is a list of hardware startups
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Ugali Maker
Cornmeal is a staple food in East and Central Africa. Ever since the Portuguese introduced maize on the continent, its mode of cooking has largely remained the same.
The number of people cooking ugali on any given day is staggering. While there are many appliances for the kitchen, none has been made for cooking this staple food. A high-tech device will take over this task and perform it better than the best chef and deliver consistent high-quality results each time it is used. Considering ugali is eaten across many regions in Africa, the market for this device spans households across many countries in Africa as well as restaurants and catering businesses in those regions. There is also a sizeable number of Africans living in the diaspora as well as tourists who have returned from Africa who will love having the device. Close alternatives to ugali can also be prepared using the same device. Here is what you need to learn about this startup.
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Collard Greens Cutter
There are many stall owners in Africa selling groceries. They often have to chop collard greens/kale, one of the most common vegetables in the region, for their customers. A rechargeable tech device will take over this mundane time-consuming task.
Sukuma wiki, as it’s commonly known in East Africa, is one of the most consumed vegetables in the region and other areas in Africa. Part of its preparation involves chopping it into thin strips. Consumers perform this task themselves in their kitchens while in some cases, grocery stall owners opt to do it for their customers to help out with this boring time-consuming process. Given the widespread consumption of this vegetable and a huge addressable market willing to automate this task using a tech device, here is what to learn about this startup.
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Off-grid Mini-Refrigerators
Solar has been one of the fastest-growing markets in Africa. More homes are getting powered by off-grid energy. Learn about Solar-powered mini-fridges adapted for this market.
Many countries in Africa are geographically found within the tropics, recording some of the highest solar insolation intensities around the world. Infrastructure for the grid is yet to reach many homes, creating a thriving market for solar panels. Falling prices of solar panels and creative business models of players like M-Kopa has made them accessible to most homes. This surge in the use of solar power has come with increased demand for solar-powered appliances. Learn about this startup for solar-powered mini-fridges to address this huge market.
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E-scooter fleet
Motorcycles transport a significant number of people in Africa. This market is ripe for electric scooters which are cheaper to maintain.
Motorcycles play a huge role in Africa serving the needs of millions of people. There is a big market for a cheaper and a more convenient alternative to the currently used gas-powered motorcycles. This is the electric scooter, which can be recharged through solar power which is readily available in most places in Africa. Learn how this startup can use the same business model of bird and lime to introduce a cheaper on-demand transport service.
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Grave-digging Startup
Funerals are an important ceremony in most communities in Africa. While there are many businesses operating in this sector, none has offered the technology to automate the grave-digging process.
There are many professions in the world but hardly do you come across someone identifying as a professional grave digger. It is therefore a task that falls on many people who may be uncomfortable carrying it. Grave-digging is still done manually using pickaxes and shovels making it a time-consuming, energy-draining, and costly process for the bereaved family. Learn how this startup is going to revolutionize this untapped market and make grave-digging a high-tech process that is less stressful to the bereaved families.
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