Technology & Information

$1.5bn Andela becomes West Africa’s 3rd unicorn this year

Tech firm Andela, which matches software developers from Africa and other emerging markets with global clients, has won unicorn status after raising $200m in a Series E funding round led by Japan’s Softbank Group.

With a $1.5bn valuation, the Nigerian startup joins Senegal’s Wave and Nigeria/US-based Flutterwave as the West African unicorns of 2021.

The latest funding allows the company to invest further in its AI software which the company says makes hiring quicker and easier by providing millions of data points to guide companies on where an individual would be most successful.

“Five years from now it will be easier to push a button and have talent readily available to you than it will be to go out and try to recruit locally,” Andela’s CEO and co-founder Jeremy Johnson told CNBC Africa.

“That’s what it’s ultimately about, finding the right fit between talent and a company. And if you can do that on a global scale you can dramatically improve access to opportunity, but also talent. And that’s what the world needs to bring us all together.”

Jeremy Johnson, CEO and co-founder of Andela

When the pandemic struck, hiring freezes left the Andela in limbo, but as companies came to the realisation that they had to turn to remote working, Andela and others capitalised, Johnson says.

“The world is not moving back into an office based environment anytime soon.. and new hires want that level of flexibility. What we’ve seen is the trend over the next ten years for remote work has been compressed into the past 18 months,” Johnson told CNBC.

Going global

Over the past 12 months the company has gone from training talent from 7 countries to over 80 by announcing a move into Eastern Europe and South America, in June. But its pool of talent remains concentrated in Africa, Johnson told CNBC.

“Latin America and Eastern Europe are still growing quickly, but the bulk of the talent base is still across Africa. Nigeria continues to grow as quickly as any country, and (continues) to be the largest single country represented by Andela talent.”

Africa’s Andela mafia

Responding to the news, US-based product manager at Facebook Dare Obasanjo saluted the company for bridging the gap between talent and opportunity.

“Talent is evenly distributed but opportunity is not. Thanks for bringing opportunities to so many. Hats off.”

African venture capitalist and early investor in Andela and Flutterwave Idris Ayodeji Bello, said the company has transformed Africa’s tech ecosystem by creating an ‘Andela mafia’ – a group of former employees and founders whose companies, just like the ‘PayPal Mafia’ and ‘Careem Cartel’, went on to be some of the most influential entrepreneurs and investors in Silicon Valley.

“I started asking my Andela people to see if they knew any Andela alumni (defined loosely as someone who used to be a fellow or employee at Andela) who had gone on to either start a tech startup themselves, or play a leading role at one. Surprise, surprise. We came up with this list of over 50 Andela alumni who have since gone on to found companies or lead a startup.”

Andela’s open plan campus in Nigeria, which closed in 2019, and went fully remote.
Technology & Information

Africa-focused Andela shifts attention to South America

Tech firm Andela, which connects African software developers with global clients, is expanding its talent pool into South America.

The firm is hoping to capitalise on a surging demand for remote software engineers as companies around the world become more comfortable with remote working arrangements.

Over the past year, the pandemic’s normalisation of remote working has boosted the business models of companies such as Andela, says CEO Jeremy Johnson.

“This was already a trend taking place before the pandemic, but the pandemic accelerated it dramatically,” he says.

Currently, around 30% of the engineers that apply for Andela’s placements are from Latin America, while the company now accepts applications from 168 countries worldwide.

Andela launched operations in Nigeria in 2014 to help global companies overcome the severe shortage of skilled software developers and ran programmes to train African software engineering talent. Since then, the company has hired and developed more than 700 software engineers across the continent and hired them out to more than 180 global companies, including Viacom, Pluralsight and GitHub. High profile investors in the firm have included Al Gore’s Generation Investment Management, Mark Zuckerberg’s Chan Zuckerberg Initiative and GV (Google Ventures).

More time-zones and jobs

The firm says that expanding its frontiers beyond Africa will bring in more clients from different time-zones, and drive growth with greater diversity. But the majority of Andela’s talent is still African.

“Our DNA is very much rooted in Africa. We care deeply about the ecosystem overall,” he adds.

Yet the firm has faced challenges in Africa in the past two years after an initial rapid expansion. In 2019 it announced that it would wind down its physical campuses in Nigeria, Kenya, and Uganda and laid off hundreds of junior engineers after admitting that it could no longer find ‘meaningful work’ for them. The firm subsequently decided to focus on “experienced talent” including mid-level and senior software engineers. Around 135 non-engineering staff were laid off in mid-2020 in response to the pandemic, according to reports, and senior staff took paycuts. Johnson confirmed that the firm is not planning on opening further campuses. 

“We’re not planning on opening up new campuses ultimately because we’re able to move faster and connect opportunity more effectively when we don’t require people to come to a single location.”

Andela’s open plan campus in Nigeria

The continent’s infrastructure has increased the share of Africans working remotely. And while electricity has been a constant and early challenge, huge strides have been made in addressing power shortages, Johnson says.

In 2020, Lagos municipality laid 3,000 km of fibre optic cable in the city, while an additional 3,000km will be installed this year.

“This was a massive step forward for the tech ecosystem,” Johnson says. I think we’re seeing material progress that helps accelerate our progress in Africa.”

“We’ve in some ways helped push but also ridden this wave of tech innovation and development on the continent, because people recognise that this is an opportunity to bring the world closer together and create high quality jobs at scale and ultimately to create human potential.”