About one month ago I started to research the tech & startup scene in Cape Verde. I've always followed the news around this industry with a lot of interest, but the last month sure has been more intense. And I definitely don't plan to stop.
To get to know more about the talented founders and entrepreneurs, and the challenges they face, I've set up different interviews in the past couple of weeks. There where a few signals that the tech & startup scene could be the future of Cape Verde, but after my first 5 interviews I'm convinced this is true.
At the start of this year, I wrote an article on the Sonvela blog which was titled “Shifting from donations to investments”. It was a way for me to get clear on my thinking for the both the future of Sonvela, and that of Cape Verde. Functioning as a 'traditional' charity was not working anymore.
During the Sonvela Arte project we had to stop working countless times because of a lack of funds. Donations would come in, the money would be put to work, and from there we would have to wait (and work) for new donations to come in again. Although we were able to briefly achieve a state of (partial) self-sustainability, as was the plan all along, we we're back to being another donation dependant project within a few months.
Sonvela is adopting a completely new model, which is kind of a charity3.0. Within our mission to work on Community Development initiatives, we want to create a fund for micro and small businesses. This is only a part of the plan, because our focus will also be on the tech & startup scene. A sector that I believe is the future of Cape Verde, will help solve critical problems and in the process can create a new asset class for investors.
Tourism
Probably the best example of foreign investment in Cape Verde can be found in the country's tourism sector. Today, large parts of the islands of Sal and Boa Vista are in the hands of foreign investors who have built big hotels and resorts that are able to make millions of dollars in profit every year. New projects on different islands are constantly emerging, with the Santa Maria project of Praia as one of the best examples.
The idea of having large parts of our islands in hands of foreign investors obviously does not excite me, but the big question remains what the alternative would have to be. We've all heard stories about how Cape Verdean workers are treated in the workplace. But the fact is that many thousands of people in our country are working because of these foreign investments. Covid-19 has shown how the Cape Verdean (local) economy depends on these jobs, whatever we might think of it.
Sure, I too believe our government needs to do a better job. There were probably other models that could have been used when negotiating sales of large acres of land with foreign investors. At the same time, there might have been a fear of losing deals with investors who could've easily go elsewhere if the conditions were not attractive. I couldn't care less about the specific political parties of our country, but I feel the need to acknowledge the complexities and challenges they face in the job.
Elect Better
On the other hand the government seems to do nothing about the enormous difficulties for Cape Verdeans to invest in their own country, while making life easy for foreign investors. I spoke to Zandir Santos, an activist who created viral videos last year about the way things work at customs in the country last year. “Why doesn't the government support Cape Verdeans with subsidies and exemptions? Current policies are anti-Cape Verdean to me, and they block our own development.”
But here's the thing. If you look at the most innovative societies around the world, you can see that change and innovation is usually fueled by the private sector. Governments need to provide the circumstances in which founders, entrepreneurs and creatives can thrive. They can't lead innovation by building new companies because this would mean creating state-owned companies. Of course there are a few other reasons why this does not happen but that would be a whole different blog post.
The reason I'm writing this is not to criticize, but rather offer a solution I believe in. One thing our government is doing is working on a better infrastructure and ecosystem for the tech & startup scene. The Websummit of Lisbon in 2019, one of the world's largest tech conferences, saw 10 (!) Cape Verdean startups participating. Through Cabo Verde Digital and different Startup Challenges and a Startup Weekend various initiatives are coming together to provide our youth with much needed opportunities.
In a recent Big Technology article I read about the American/African startup Andela, one of the companies ex-employees questioned the Venture Capital business. I was the one of the most interesting parts of the article: “Is the entire sector a sorry excuse for us saving or reinventing other institutions? Why is it the private sector that needs to come in an innovate? Why can't schools, governments etc. do that job?”
Most of these founders are obsessed with tech and with the solutions they are trying to find. In a lot of cases it starts with a simple and small problem they face in their own daily life. Within private companies, especially small ones, people can move extremely fast. Not just in development, but also in decision making. A huge contrast with the political world, where burocracy tends to stop anything from moving too fast.
Private Sector Investing
Electing better should definitely be on all of our minds. Or as Zandir said in our interview “We need to take off that shirt of the political party, and stop with the 'Ami é...' (I am... insert favorite political party). The Diaspora has the power to demand politicians to do better.” But in my opinion the future of Cape Verde primarily depends on the next generation of founders and entrepreneurs and their ability to solve critical problems.
A few examples of what I call the Cape Verdean software evolution:
- Nha Bex created an app that allows you to 'get in line' in real-time for a service that you are about to use. This can free up many hours a week/month that people usually spend waiting for their turn.
- PrimeBotics designs drones and systems that solve issues that the agricultural sector of Cape Verde faces such as working in remote and inaccessible areas.
- Gestagrosystem is another company that solves problems in agriculture, by coding and designing irrigation solutions and management systems.
These are just a few examples of impressive technology built by young companies that do so in sometimes challenging circumstances. Some have been working on their projects for years, and innovate as part of a mission (and business model), but also to not be left behind. Unlike in politics the constant competition from others hunting their position keeps them on top of their game.
Investing in our young founders & entrepreneurs will give them the opportunity to build sustainable businesses, and look at the country's biggest problems that need to be solved. Housing, healthcare, education, unemployment, these are all sectors that can be disrupted by technology. It will also allow Cape Verdeans to own their technical solutions instead of being a consumer or an employer to a foreign (fin)tech company.
By investing we make sure that technical solutions can be productized and commercialized domestically, which from there can even be scaled to other parts within the region. I see this happening in other (small) West African countries, but also throughout the entire Diaspora. There is an opportunity right now to make a cultural shift, in which today's founders and entrepreneurs will be tomorrow's examples and idols.
What is Sonvela doing?
I'm currently creating an 'investment vehicle' for the tech & startup scene in Cape Verde. In short, this is my 20-year vision for what I want to build in the country:
- Angel Investor Syndicate
- Startup Generator/Incubator
- Fund for Micro and Small businesses
- University and Company of the future for Innovation and Disruption
Help solving Cape Verde's biggest problems.
Notes:
- The interview with Zandir Santos will be published on the 18th of July. My conversation with Gestagrosystem founder Hilaria Jesus is scheduled for the 1st of August.
- Legendary article of Venture Capitalist Andreesen Horowitz:
- Forbes interview with the Secretary of Innovation:
