After less than 2 year of activities, the incubator and accelerator CTIC Dakar is definitely established as a leading stakeholder in the francophone Africa technology scene and is on his way to build one of the first models on the continent for a financially sustainable incubator.
Its team has done a lot to put Senegal on the map but most and foremost to boost the growth of its IT and mobile companies all over West Africa. Despite all this, it is still too early to celebrate, and the challenges to overcome in 2013 remain important before having a life-changing impact on Senegal and on Africa.
What is CTIC Dakar ?
It is the first incubator and accelerator dedicated to IT entrepreneurs launched in Francophone West-Africa. Started in April 2011, CTIC Dakar is a new model of incubator initiated by the government of Senegal and supported by the World Bank Infodev Program. This model has two main characteristics: be public-private, and be sustainable after 5 years, i.e. be able to work with no support from public bodies or international donors.
Apart from the World Bank through the IFC, the incubator is supported also by Orange, the leading telco in Francophone Africa, the European Union, the German cooperation (GIZ), and the local government agencies ADIE (Government IT Agency) and ARTP (Telcos regulator). Its vision is to be one of the leading organizations in Africa for the growth of high-potential IT SMEs.
Unlike many “tech hub” or co-working spaces on the continent, its chorus target is not only young entrepreneurs or mobile app developers but above all high-potential existing companies eager to growth at the continental level. However, to build a pipeline of interesting enterprises, CTIC works with universities and has launched an accelerator program dedicated to web and mobile startups.
For all of them, CTIC provides office spaces with high-speed internet, business development support on a daily basis, private networking events with potential clients, participation to international IT exhibitions, training and certifications, lobby and introductions to decision makers from the public and private sectors.
To reach sustainability, CTIC business model is simple: take 7% to 9% of the revenue growth of the companies and develop business development services to other companies and organizations. In other words, if they don’t grow, we don’t either and cannot survive without international donors!
What have we done in 2012?
From 6 entrepreneurs incubated in 2011, CTIC now supports 11 established companies in its incubation program and has coached 10 startups in 2012 in its accelerator program “BuntuTEKI” (doors of success in Wolof, the national language). The cumulated revenues of the 11 companies have passed 1 million USD in 2012, representing an average growth of 75% from 2011. To compare, the average growth was 33% in 2011. On the 10 startups supported with BuntuTEKI, 4 are still up and running and 2 just started generating revenues.
In 2012, CTIC received 101 applications and expressions of interest for its various program and only took 5 new companies. CTIC and its incubatees have participated 6 major international exhibitions and trade shows, including DEMO Africa in Nairobi, where 3 of its companies where selected to pitch; the ITU Telecom world in Dubai; the World Summit on Innovation and Entrepreneurship in Boston;; AfricaCom in South Africa and the ECOWAS NetCom conference in Burkina Faso, where CTIC received the Best Incubator Award.
The incubator has created around 45 new qualified jobs, essentially engineers. On the education side, more than 300 students and young entrepreneurs have been coached through regular workshops and events like StartupWeekends. Talking about it, CTIC organized more than 20 events in 2012, with two clear goals: increase access to markets and to decision makers for its companies and participate to structure the IT entrepreneurship ecosystem.
On this latter aspect, CTIC has spent a lot of its resources trying to build a real and dynamic ecosystem around technology SME. One of its major works has been on the financing side. Two conventions with banking institutions are being discussed and should facilitate access to credits for the companies. Also an important work is currently undertaken to structure a club of business angels dedicated to IT SMEs.
This club has been launched by 10 very wealthy entrepreneurs in July 2012 during the GIST Bootcamp, organized in partnership with the US department of State with the support of Infodev. CTIC currently works with a team of four consultants from MIT Sloan to establish a series of tool facilitating their investments.
Any success stories?
We could mention Mlouma for instance, which has built a beautiful solution dedicated to farmers. So far despite its implementation and use by several groups of farmers, it models mostly stands on donors’ grants or competition awards – but soon its customers will start paying for the service. The startup needs a greater investment to scale and be profitable.
More traditional IT services companies still had a great growth this year. We can showcase here SeySoo which is developing the IT management system for the government of Gabon and which has developed a comprehensive medical management software already running in major radiologists in Dakar.
Another success story is People Input, now the leading digital agency in West Africa. They have opened offices in Cameroon and Ivory Coast and interestingly enough, they made for the first time more profits this year by building mobile apps – mainly for businesses – than by developing websites. They presented at DEMO Africa an innovative app store with local content that they will commercialize in partnership with Telcos operators.
The great newcomer of this year is probably Xtreme Senegal. Just back from 15 years in the US, the team who joined CTIC in October is building native mobile apps specifically dedicated to the tourism industry. They are working with a major hotel chain to implement and test several solutions which can revolutionize hospitality worldwide.
On the startups side, we can appreciated the booming debuts of Inaota, the team behind www.afriqueitnews.com, now the leading website in Francophone Africa dedicated to IT and startups. We can also expect soon the new version of SamaEvent.com, a terrific mobile ticketing app already tested by a dozen of organizers.
Well, all this is nice but does it bring a real social and economic development in the country or region? So far, the impact is still limited to Senegal and to the dozen of companies supported, but an innovative incubator model is defined and is on its way to be sustainable. However, to really fulfill its potential impact, the incubator and it partners have few major challenges for 2013:
1) Extension plan – CTIC needs to convince its original or new partners to support an extension plan or a new building for the incubator. The demand is considerably higher than expected and the financial sustainability of the incubator can only be reached if it supports more 25 companies on a regular basis.
2) Government support – Push the government towards a real support to IT SME – by allowing them more of its public markets for instance, like the Small Business Act in the US or by creating an innovation fund to provide seed capital to startups.
3) Financing – Structure innovative financing tools for IT startups, like the Club of Business Angels for instance. Hopefully, its activities will start in the coming months and maybe some investments will be done in 2013.
4) Universities – Work with universities and create pre-incubation centers in order to build a solid pipeline of innovative entrepreneurs and technologies.
5) Regional expansion – Build a network of partner or affiliate incubators in Francophone West Africa where CTIC’s startups could go and be assisted with no extra fees. CTIC’s team is already bringing its partners like the World-Bank and Orange in the discussions with Mali, Niger, Gabon and Ivory Coast. The public-private model of CTIC is interesting but you can imagine how much patience it takes to find an agreement between those stakeholders.
2012 was a lot of fun for the 8 people’s team at CTIC. It has been tremendously exciting to trigger a tech startup scene in Senegal, but our ambition should not stay here and we still have to work hard and stay focus on our vision – be one of the leading IT incubators in Africa for the growth of high-potential IT SME and foster real socio-economic changes in the region.