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Note : this article is the original version of an interview given to the great site Human IPO and first published under the title :  Senegalese accelerator secures $150k for startups this year –   Thanks @ Tom Jackson

– What is the idea behind CTIC, and how does it work?

CTIC is the first accelerator and incubator for IT entrepreneurs in Francophone sub-saharan Africa. Created 2 years ago as a public-private non-profit organization, CTIC’s vision is to support the best IT entrepreneurs based in Senegal but having a global or at least regional reach. We have been supported from the start by great partners like the World Bank Infodev program, the German cooperation GIZ, the European Union, the Senegalese Government, the operator Orange and other smaller local private partners. The big idea is to have the government involve to provide facilities, electricity and also to facilitate access to public markets for our SME, but it doesn’t interfere with CTIC’s the business-oriented management style. Our business model is based on a percentage of the revenue growth of the companies we support – if they don’t grow, we don’t get paid. We have two programs: the incubation for existing companies already generating revenues which goes up to 3 years, and the accelerator for innovative startups teams which last 6 months. We don’t take equity so far in the accelerated companies, the accelerator being more for us a way to increase the pipeline of venture and to select the best for our incubation program. We have a team of 8 full time employees.

– Do you provide incubation?

Yes – we provide private office spaces to our companies (but also support larger companies having external offices), business development and contract negotiation, financial and fiscal management, media partnerships, community management, dedicated events if you want to showcase your product and of course access to finance. We now have few local partners directly seed funding our companies and startups.

– How are you funded?

We started with grants from the WorldBank / IFC, Orange, EU and the Government. After 2 years of activity only, we are now able to cover 45% of our annual budget with the revenue we generate from our companies and few business development services like consulting and events. We hope to be fully sustainable by 2016.

– What potential is there in the Senegalese tech space?

Senegal has for us a tremendous potential. Of course the market is small (13 million inhabitant) but Senegal has been traditionally the entry door to Francophone sub-Saharan Africa, which represents a +350 million people market. For historic and administrative reasons, is pretty easy for a company based in Senegal to access this regional market. Furthermore, a large number of international corporations or NGOs are headquartered in Senegal for west and central Africa. Third, Senegal has a very good higher education system, with more than 200 institutions and several international campus. The country attracts a lot of students from other francophone places which created a large talent pool to tap in if you are starting your business. Finally, the IT infrastructure and connectivity is good and the mobile penetration rate is close to 90% now. 3G is well used and 4G is in its pilot phase. Last but not least, the quality of life and security is one of the best on the continent – and that also is important for a tech ecosystem!

– What is holding it back currently?

We need more private investment at the seed stage. We now have several VC based in Senegal or looking closely at it, but we need few more business angels to really help the startups get off the ground. A public innovation fund could be a good tool to trigger the angel industry by a match-making grants system for instance. Also, like many other countries in Africa, Senegal lacks of good graphic designers who can work with engineers – this is really holding back the mobile apps industry. The cost of electricity is also still a break for young companies (but not for CTIC’s ones!)

– Does Senegal have the potential to compete on a global scale through ICT?

Surely. At least we work night and day at CTIC to achieve this! Senegal is already taking advantage of its very high level diaspora to boost global Senegalese companies. They start businesses back home and bring a lot a business and technology practices and then use their international connections to scale globally. We also believe that with the internet penetration rate growing rapidly, Senegal starts to be an ideal place to test business models and products for the francophone and global market. We now need to attract more international private investments (and not only from France!), but we are sure that with the political stability and the recent visit of Barack Obama, US investors are closely searching for a way to enter this region.

– What achievements can CTIC point to so far? Any high points?

We have graduated our first company, People Input, which is now the largest digital agency in Francophone Africa with around 30 employees and a presence in 3 countries. They of course have a great team but we did a great job together structuring their business development, getting access to public commands and gaining international partnerships and visibility. We have so far incubated 16 companies which are all still in business and 30 startups teams. The average revenue growth of our companies was 85% in 2012, up from 33% in 2011. In 2013, we have been able to secure around $150,000 in innovation investments for our startups and one of our incubatees received a series A funding from an international VC.

– What does the future hold for CTIC?

We are glad to have reached an interesting level of national and international recognition in only two years of time. CTIC is now involved in all major discussions at the top level in Senegal regarding ICT and entrepreneurship which helps us lobby for our entrepreneurs. The demand being high, we hope to move into a bigger building soon and thus we now need to better structure our team and internal processes to be able to scale rapidly. We want to develop better our soft landing program to facilitate entry in West Africa to foreign tech companies. We are also working with our original partners to replicate CTIC’s model to other regions of Senegal and to other countries. Niger incubators is already launched and Mali and Gabon are on the way. We will also keep on structuring the IT angels community and hopefully once we will have enough of them we could try to develop an equity based model for our accelerator program. Indeed, still a lot to do, but thanks to Human IPO, we’ll keep you posted!

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Note : This article has been written By Dinfin Mulupi and first published on How We Made It in Africa.

French-speaking Africa has often been approached cautiously by investors and companies from English-speaking countries within and outside the continent. However, the region is being viewed as an exciting region to do business as more local and international companies enter the market.

The Francophone Africa region  has a total population of more than 300 million people which some of the big economies being Senegal, Cote d’Ivoire, GuineaRepublic of the Congo, Cameroon and the Democratic Republic of the Congo (DRC).

Technology, according to Yann Le Beux, Catalyst at CTIC Dakar, the regions first incubator and accelerator based in Senegal, is one of the sectors expected to thrive in the region in coming years.  While some of the countries in the Francophone African region are politically insecure, Senegal is quite stable making it a good entry point into the region.

“Senegal is a very good base to start a business because people are well educated, very talented, there is good infrastructure and a lot of companies are headquartered in Dakar making partnerships easy and accessible. It is a good entry point into the rest of Francophone West Africa,”

Le Beux said Senegal’s market is mature adding that the country has a good technology infrastructure network with three mobile operators and about 98% mobile penetration.

“The technology market there is actually mature. It is not a very large market in Senegal but, what is interesting is that a lot of companies are headquartered in Senegal and target the entire Francophone regions and its 300million inhabitants. So, there is a lot of opportunities,”

In 2 years of activity, CTIC Dakar has incubated 15 companies generating revenue and has supported more than 30 startups drawn from Francophone West Africa.

“Generally, a lot of Senegal companies do well when they go to Ivory Coast, Burkina Faso or Cameroon. That is an advantage. The companies that we support at CTIC Dakar may have between 5 and 30 employees but already half of their revenue is made outside of Senegal”

CTIC Dakar is currently focused on supporting high-growth tech companies and start-ups because ‘there is not enough of them’ in the region by linking youthful tech enthusiasts with more experienced entrepreneurs. The incubator for IT and mobile services entrepreneurs offers training, business development, financing and linkages with industry players and public decision makers.

“There is opportunity to use technology to create linkages in other sector such as agriculture, tourism or education which are big in Senegal. We still have basic needs on this continent that have not been addressed using technology yet. We see a lot of opportunity for enterprise products,”

Companies that choose to venture into the region through Senegal have to contend with the challenge of accessing well trained and experienced manpower.

“We need more training in this area in Senegal. Generally, all over the continent these skills are lacking.  Financing is also a challenge because we don’t have enough early-stage private sector investment in Senegal. We need more business angels to bring seed capital to startups but we know that few venture capital funds like I&P (“Investisseurs et Partenaires”) are already based or looking at Senegal.

Local entrepreneurs in the country also have to battle with cultural expectations which stifle their business endeavors.

“The family is something very important in Senegal so, as soon as you get your diploma you are expected to start giving back to your family. Starting a business means you have to borrow a lot,”  says  Le Beux “This makes it difficult for one to start a business because they are expected to give, when what they need is other people to lend to them money to support their start-up. For some young entrepreneurs who start being profitable, it is not easy to find the right balance between helping the family or investing back in their growing businesses.”

He advised companies interested in investing in Senegal to hire the right people and form partnerships with local companies.

“As an investor you need to find a good person that will support the structure that you have. You need to have a reliable local team that you trust,”

English speakers, Le Beux added, should not shy away from Francophone Africa since they can ‘easily get around without speaking a word in French’ if they get help from local partners… like CTIC Dakar !

Interview radio réalisée pour Widoobiz en Janvier 2013

Les incubateurs sont en plein essor en France et à travers le monde.

Lieux développés pour les entrepreneurs en herbe, les incubateurs permettent aux jeunes chefs d’entreprises de disposer d’un espace de travail et de conseils quotidiens de professionnels. Certains incubateurs sont d’ailleurs thématisés et se spécialisent sur un secteur d’activité. C’est le cas notamment de Incubateur CTIC, lancé à Dakar pour les entreprises des TIC.

Julien Noronha retrouve son chroniqueur José Kouadio et reçoit Yann Le Beux pour présenter le premier incubateur d’Afrique dédié aux nouvelles technologies. Les entreprises y sont sélectionnées pour leur capacité à faire croitre également d’autres secteurs de l’économie nationale.

http://www.widoobiz.com/j-entreprends-comme-je-suis/entrepreneurs-du-monde/senegal-les-nouvelles-technologies-ont-leur-incubateur/26917

Bonne écoute.

CTIC Dakar incubator

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.

 

Perspectives

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 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.

In brief, 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.

Sample of an interview I gave to the great team at VC4Africa for their meetup during the 1st DEMO Africa conference in Nairobi in Oct 2012.