Andela targets expansion after $100m fundraising

Tech startup Andela is poised to boost tenfold the number of its African software developers working on projects for companies across the world. CEO Jeremy Johnson explains the strategy to African Business.

 With its cosy nap-pods, outdoor yoga and exercise area and cushioned canoe sofa said to evoke New York’s Hudson River, the trendy north Lagos office of Andela appears to have been lifted straight out of Silicon Valley. 

Yet amid the open plan desks and side-offices where you would expect to find coders straight out of Stanford or MIT, ambitious Nigerian software developers knuckle down on projects for companies based thousands of miles away.

Founded in 2014 and with additional campuses in Kenya, Uganda and Rwanda, Andela’s ambitious goal is to train distributed software teams from scratch using African talent before hiring them out to work on projects for international clients. 

After five years of rapid growth, culminating in the hiring of some 1100 developers across the continent, Andela’s unashamedly private sector model has attracted the backing and financial support of some of the US’s most prominent investment luminaries.

The firm is set to embark on the next phase of its expansion following the completion of a $100m funding round in January led by former US vice-president Al Gore’s Generation Investment Management and supported by Facebook founder Mark Zuckerberg’s Chan-Zuckerberg Initiative and others, bringing total venture funding to $180m. 

Building a developer 

Yet with high-profile investors comes a new level of pressure and scrutiny as the firm attempts to boost tenfold the number of its African developers while proving to a sceptical world that the continent’s development talent can compete on an international level.

Speaking to African Business, co-founder and CEO Jeremy Johnson says that the software world is rapidly waking up to the vast untapped potential of Africa’s development talent. 

“Over the past five years there’s been a significant shift to comfort with remote and distributed software development teams and we’ve spent a lot of time helping companies to do that well…

“When we first started the reaction was usually, ‘wait a second, I don’t know if I heard you right. I must be mistaken.’

Now if you are the CTO of a high-tech growth company in the US there’s a better than 50-50 shot you have a friend working with us.”

Johnson says that the firm’s rigorous hiring and training methods allow Andela to select the most promising African developers from thousands of hopeful applicants, only around 0.87% of whom have been selected to date.

While a formal technical education is not a prerequisite for a successful applicant – Johnson tells of a fisherman self-taught in technology who has been selected for the programme – some 75% of Andela hires do have an undergraduate degree in a technical subject. 

“We’ve broken down what it takes to be a great distributed software developer into over 1100 component parts.

We track every aspect of how someone progresses over the course of their learning experience while also focusing on a culture of continuous learning and development even after that.

“It’s challenging, and in general people are more successful if they’ve begun experimenting with open free technology resources online to learn the basics.

One thing we’re looking for is people who like solving problems with technology. If they’ve done it on their own for fun it’s a great indicator that they enjoy it.”

Johnson says that the firm has managed to unearth development talent in every African country to which it has expanded using its rigorous hiring and training system. But he believes that the company is only beginning to scratch the surface of the demand for African distributed software teams. 

“It’s been pretty consistent. We’re just now beginning to scale in Rwanda, our first public-private partnership. In Nigeria, Kenya, Uganda, the talent has been extraordinary…

“We’re at roughly 1100 developers now, we’re going to double that over the next year and over the next five to 10 years we expect it to be 10,000. And so we’ve got a lot of work to do.”

Technological constraints

But in a continent with well-publicised technological constraints, including a scarcity of high-speed broadband infrastructure and internet penetration at just 24.4% in 2018 according to the International Telecommunication Union, persuading policymakers to prioritise the creation of viable tech ecosystems in which Andela can thrive is a challenge.

While the connectivity picture is improving rapidly across the continent – only 2.1% of Africans were online in 2005 – Johnson says Andela has had to make significant upfront investments to secure reliable infrastructure. 

“I would love policymakers to more than anything be aware of the importance of building high-end tech ecosystems and attracting talent…

“What Rwanda is doing around this is really impressive, people 10 years from now are going to say why wasn’t everyone doing what Rwanda is doing?

“It’s a combination of how do you bring developers from across the country, how do you work to cultivate [the talent] – how do you train your promising young people to become developers and create pathways?”

Despite the familiar constraints offered by Africa’s limited operating environments, Johnson says that Andela’s latest fundraising drive will allow the firm to further develop its technology platform to provide clients with improved data to understand the performance of Andela’s developers and better manage their teams on the continent. 

“In the coming years its much more around how do we leverage data and the systems that we’ve built in order to help connect top tier talent from across Africa into global companies, how do we leverage that to help companies better manage distributed teams and scale them?”

Fundraising for the future

While the involvement of high-profile investors in the $100m Series D funding drive, concluded in January, has sparked welcome additional publicity for the firm, Johnson says that the continued commitment of longer-term investors shows that the firm is more than a flash-in-the-pan tech startup.    

“I do think it’s a pivotal moment but we’ve had at least one pivotal moment a year for the last five years.

We’re not a new company. Chan-Zuckerberg came on two and a half years ago. I think there’s been a lot of visibility on Andela from an early point.”

He says that the continued involvement of high-profile investors gives the firm the motivation to kick on to the next level rather than wallowing in the self-congratulation that too often comes to exciting tech companies who taste early success and bank an impressive fundraising. 

“I intend to get back to work. Celebrating a fundraising is like a great chef going out and buying ingredients and celebrating when they get back from the grocery store. Now we’ve got to prove we’re capable of executing on it.

“As we’ve grown we’ve had to prove we can scale and execute at the next level. This absolutely adds additional pressure but it’s also an opportunity.”

For now, expansion to other African countries is being actively considered, yet Johnson does not play down the applicability of the distributed working model to other emerging markets as firms increasingly feel unconstrained by geography in their hunt for the brightest development talent. 

“We think that Africa is the youngest, fastest growing continent on the planet and has a lot of room for human capital development, and we have a long way to go in showing that brilliance can be evenly distributed.

I don’t think we’re going to alter that in the short term but I totally think the Andela model could work in other emerging market economies.”