Venture studio Adanian Labs fuels startup growth in Africa

In February 2020, as the world was shutting down, and as businesses downsized on account of the Covid pandemic, John Kamara was busy establishing another new startup Adanian Labs in Nairobi, Kenya’s capital. It had taken him two years to finally make this dream a reality, and nothing — not even the pandemic — was going to derail him.

And so, swimming against the tides, he set up the venture studio in partnership with co-founders Irene Kiwia and Bendon Murgor.

“People thought we were crazy,” Kamara, who doubles up as Adanian Labs’ CEO, told TechCrunch.

It may have been a tough period to build a business but they sailed through with their mission.

“We stay the course with startups and make sure they become successful businesses — We de-risk them from failure,” said Kiwia.

How Adanian Labs started

The idea to build Adanian Labs, was conceived in 2018, when Kamara was living and working in Cape Town, South Africa, where he witnessed the fast growth of the startup ecosystem, and how, in most countries, accelerators were the default launch pads. He thought the continent was ready for better support, beyond the mentorship and training that most accelerators offered.

“The startup ecosystem was growing but I could not fail to notice the problem of accelerators. You know, startups come out of accelerators and most of them do not have a real opportunity to go to the next level,” said Kamara.

“I thought, there has to be a way I can build something that could to empower African founders and provide a better support infrastructure to startups…and in a way retrofit it to also build a business.”

Compelled to offer more value to startups, the co-founders launched Adanian Labs in Kenya, joining other players, like Nailab, in the space. Adanian Labs targets idea-phase tech startups, offering them all-round support including capital, advisory and operational backing; building them from the ground up.

Adanian Labs makes equity investment of up to $120,000 in these startups.

By the end of the one-year venture building program, the startups should have launched a product, onboarded, and had repeat customers, have a defined revenue model, and have raised or are in the process of closing seed funding.

“We help these startups build their teams, iterate where needed, until we find a market fit product,” said Kamara.

“I’m not delusional that every startup has to succeed, but from the moment they become part of the Adanian Labs it means that they have the potential to succeed,” he said.

Venture studio Adanian Labs is accelerating the growth of startups in Africa

A team is captured brainstorming. Adanian Labs plans to help build 300 startups over the next five years. Image Credits: Adanian Labs

Africa-wide Growth

In a period of two years, Adanian Labs has grown beyond Kenya, by establishing a presence in Tanzania, Zambia, South Africa and Nigeria – some of the biggest startup and tech hubs in Africa.

It is eyeing a pan-African presence by 2025 as it races to help build 300 companies over the next five years. In the interim, the lab is planning on establishing a presence in Democratic Republic of Congo (DRC), Senegal and Ivory Coast, and considering a franchise model to help it fast track its growth.

Having an Africa-wide reach means that startups under Adanian Labs are able to scale in other markets easily as they tap the venture studio’s existing infrastructure as a launchpad.

“Our presence in multiple countries means that our startups can launch in a second country or even five countries without thinking too hard about it. This means we are focusing on innovations that are applicable across all markets. Not just one,” said Kiwia.

“The speed at which our startups are able to scale to these markets is like 10 times because we have a presence, have local partners, and we understand the terrain and the legal aspect of setting up,” said Kiwia.

Joy Mwangi, co-founder of Ada animation, a startup in the first cohort, confirmed this to TechCrunch saying the lab’s wide network has also enabled them to tap talent from other major animation markets in the continent like South Africa and Nigeria.

While Adanian Labs takes in idea-stage startups they also help investor-ready startups, with scalable products, fundraise. The venture studio is planning on building a fund that will target startups in the growth stage.

“We have encountered startups that are not young for us to incubate, they are doing very well but would never get the attention of VCs because they lack that visibility that we are bringing to these startups. So, we have a short program to help them raise,” said Kamara.

The venture studio is currently incubating its second cohort of 20 startups drawn from the five countries. The group succeeds the first cohort of 12 startups, which included eCoBba, Paylend and AfyaRekod, all three co-founded by Adanian Labs founders.

The eCoBba is a platform co-founded by Kiwia to digitize savings groups, tapping their data to extend their range of financial services. Paylend, which was co-founded by Murgor, helps small and medium businesses access credit, while AfyaRekod, co-founded by Kamara, is a patient-driven health tech-start-up that ensures patient data mobility. All these startups have raised on average $2 million each in seed funding over the last few months.

AI and Blockchain

Beyond the venture studio, the lab is allied to the Artificial Intelligence Center for Excellence (AICE) and Africa Blockchain Center (ABC), headed by Natasha Ochiel and Jeff Mkungusi respectively, which are independent training and consulting businesses. The AICE has trained 100 data scientists and AI engineers, while the ABC, which is backed by Asia-based blockchain and consultancy business Next Chymia Consulting has skilled a similar number of blockchain engineers so far.

Adanian Labs said such investments ensure that there are enough skilled persons to build the next-generation startups.

“We’ve lost engineers to bigger companies. And we feel that we have a bigger responsibility to keep training the techies to keep up with the demand. And so, at Adanian Labs, we are not only building startups, we are building the next generation of African tech experts,” said Murgor, also head of the labs tech team.

Tech skills gap in Africa has become a thorny issue as multinationals like Visa, Microsoft, Google and East Africa’s biggest telco Safaricom snap up the few talents available in the market forcing entities like Adanian Labs to come-up with ways of bridging the gap. Besides, as multinationals look to Africa for tech talent, it has become important to increase the digital and tech skills locally.

“Many companies in Africa and beyond outsource the AI and blockchain expertise from India. And we want to change that, and that explains why our capacity building component is so critical, because that’s a lot of lost value. Also, for us to build 300 companies, we need the capacity to be local. The world is also shifting towards Africa, and we are preparing young people on the continent to be able to work in the tech space of the future,” said Kiwia.

And they seem to be living up to their promises as Adanian partnered with US tech multinational NVIDIA last year, to collaborate on projects and train 4,000 AI engineers (through AICE) in Africa, over the next few years.

Adanian Labs also recently partnered with LBank, a cryptocurrency exchange, to build a community of crypto and blockchain developers in Africa. Through ABC they will also run a crypto accelerator to help build next generation startups in the continent.

The venture studio, which is raising its series A funding, also counts itself as one of the first partners of Emurgo Africa, also one of its first investors. Emurgo Africa is an arm of Emurgo, the official commercial division of the Cardano blockchain that is pushing to have “Cardano’s blockchain adopted as the technological platform standard in Africa for socially impactful solutions.”

Looking ahead, Adanian Labs hopes to overcome the current phase, where the global flow of deals is on a slow-down, and rise to power more startups and conquer more markets across the continent.

Reiterating this, Kamara said, “We built and made it work with the little resources we had. We did not stop then, and we do not plan to stop or scale down now.”

“Adanian Labs has turned into an ecosystem, a place where people come to find value.”

This article was originally published on TechCrunch.com. Read More on their website.

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