If you participated in any entrepreneurship event recently or consumed some of the countless blogs, videos, podcasts, and books on the subject of startup funding, you might be wondering what’s missing in the conversation and why we want to add another voice through this interview.

The answer is simple. For one, the International Finance Corporation (IFC) estimates that up to 84 percent of small and midsize enterprises (SMEs) in Africa are either unserved or underserved, representing a value gap in credit financing of US$140-170 billion. In the Monitor survey, challenges related to accessing finance drew mixed perceptions from the demand and supply sides.

Second, when you canvass the African entrepreneurship ecosystem, it looks like the founders that are seen as the innovators are highly educated kids with rich parents and their counterparts with access to big-ticket investors in Silicon Valley. Look at this Briter Bridges data: 40% African entrepreneurs in their research had a bachelor’s degree, 21% secured a master’s degree, and an additional 9% had an MBA. Only 1% of the respondents had no degree, a license, or a certificate. So how do we improve the prospects of startup success, especially for this minority?

I was excited to jump on a call with one of Africa’s brightest thinkers and the founder of Future Africa, Iyinoluwa Aboyeji, to discuss how to fund the future of African innovation.

Nigerian entrepreneur Iyinoluwa Aboyeji is the co-founder of Andela, Flutterwave, and Future Africa

E (as he is fondly called) is an impact entrepreneur with a passion for building the future of Africa. He spent seven years of his career building ventures in the education, technology, youth employment, publishing, and finance spaces. At 18, he interned for the World Youth Alliance at the United Nations headquarters in New York. He then went on to lead Imprint Publications, one of Canada’s largest student-owned publishing houses, as President of the Board in 2010. Iyinoluwa helped found and run Bookneto Inc, a social e-learning platform which was acquired in 2013 by the Canadian Innovation Centre. In 2014, he co-founded Andela to find the brightest young people in Africa and prepare them to become Africa’s next generation of technology leaders. Andela was named by CNN as one of the top 10 African Startups of 2014 and raised investments from Silicon Valley VCs and Angel Investors like Spark, Google Ventures, and Mark Zuckerberg.

In May 2016, Iyinoluwa left Andela to co-found Flutterwave, a payments technology company connecting Africa to the global economy with one API for processing any payment across Africa. Flutterwave is a Y Combinator company backed by several notable angels and VCs around the world. Iyinoluwa holds a Bachelor’s Degree in Legal Studies from the University of Waterloo in Waterloo, Ontario, Canada. He’s received several awards and honors including the John C Holland Award for Youth Leadership from JC Holland Foundation in 2010, Nigeria’s top 20 under 20 (awarded by This Day newspapers) in 2011, World Economic Forum Global Shaper in 2012, and Forbes 30 under 30 Most Promising Young Entrepreneurs in Africa in 2015.

Beginning with the fundamental question, what is innovation in the African context, and should African entrepreneurs only focus on technology adoption or platform ownership?

A lot of the problems we’re dealing with on the continent are what we call wicked problems. These are problems that if you deploy simple solutions, you might gain some slight traction that might deceive you into thinking you solved them but then these “solutions” create more complex problems you then need to solve. One case study is in school. Everybody knows that the lack of education for young Africans is a problem. We have a tremendous problem with our school system, and we understand that.

One thing missing in that conversation is the fact that even when kids go to school, they are not learning much. The quality of education is poor right now. And if you intervene by building more schools, but you don’t create programs for teachers and you don’t equip the kids to learn with technology, you can build 10,000 schools, but yet you will not have an educated populace. And to make matters worse, you have a perfect storm such as Covid-19, where kids can’t go to school. The kids do not have the basic skill sets to learn on their own from the internet, so they lack access.

To me, many problems that exist in Africa are social issues. The role of innovation is to find these challenges and turn them into global business opportunities by leveraging what we call market-creating innovation. We should focus on both platform ownership and technology adoption. When you think about it, many mainstream platforms don’t serve us as Africans because the owners didn’t build them to solve our problems. There’s a need for a more balanced conversation on platforms, users, and market access instead of just having a blanket technology conversation because there’s no upside with that discussion.

Young entrepreneurs from the Young African Leaders initiative

There has been a growing concern on whether there’s an innovation paradox or innovation deficiency on the continent. Share your views on this issue.

I think it’s still a deficiency of problem solvers. So, we must have exact knowledge of the problems we wish to solve. Our focus must be on both the problem and likely outcomes. Sometimes, we have people who have knowledge and access to solve the problems but lack a sense of mission. They are going into these things not to solve problems, but to make money. As a result, they’re willing to settle when they make progress. We must have more missionary entrepreneurs that look at these problems as life missions and will go the long haul to solve the problems.

As someone that co-founded two of the continent’s best-known startups, share your view on how we can build a pipeline of high-quality early-stage startups.

First, we have to invest in talents in the ecosystem. We have many people with an unbalanced body of knowledge; maybe they understand technology, but they don’t understand people. And some understand people, but they don’t understand business. While others understand business or their mission, they don’t understand management. We must aim to have more well-rounded talents in the ecosystem.

The second thing is the lack of data. Many people don’t have correct or even decent data on the problems they want to solve. Data helps them to judge what solutions are workable or not. Data is vital. The more we can share information on problems we are solving and challenges that arise on our way, the more robust the solutions we deploy. Those things are important, which leads me to my third point.

You need design; you need people to understand the technologies of the future and the behavioral psychology of human beings. That way, you can ferry across solutions cognizant of both constraints of technology and human beings.

The last is distribution; many businesses lack distribution in terms of sales and marketing. Other distribution channels such as partnerships and business development support are equally critical. It’s one thing for you to have a scale as a business and another thing for you to achieve your skill by being part of a market that’s mission-driven.

According to The Guardian, of the top 10 African-based startups that received the highest amount of venture capital in Africa last year, eight were led by foreigners. Share your views on this, in light of how to create local investment stalks for African entrepreneurs.

The missing point in many of the conversations is what I call “own goals” we score with later-stage investments. They’re the result of us being very stubborn about investing very early in talent; letting talented entrepreneurs struggle. I’ll use myself as an example. When I was raising money for Andela, one of the 10 companies the person mentioned, the reality was I didn’t receive much support from my community. I had to defer to where capital was coming from, which was the U.S. Because otherwise, we wouldn’t carry out our mission as a company.

As a result, that changed our market dynamics. I mean, it’s much more complex, many people would think. But those were different times. Things have gotten better now. If we refuse to enable and empower our own at the early stages, we cannot continue to cry foul. Entrepreneurs in the U.S. can secure financing, either from their family, friends, the union, or whatever. Even if you thought you have qualified people who should be funded, they are unlikely to get funding from people they don’t see or know, and that is the case with foreign funding. They are more likely to get funding from local entrepreneurs who understand their business.

What is the critical missing link in talent development in Africa, and how do we solve it?

We must be systematic and intentional about identifying talent and building infrastructure for them to grow. What do I mean by that? Right now we have huge educational deficits. We are behind, and in my mind, what we need is to promote a system where people learn how to read, write, and calculate at the basic education level. Then they have the freedom to explore whatever other opportunities they wish to explore.

There’s a new direction we can follow. For example, remittances to Nigeria, over the last four years, have eclipsed all forms of official development aid. We need to figure out ways to leverage science and technology to make sure that every child has an opportunity. And then go from there. We export so much human capital to the world, and we don’t make money doing that because we’re not intentional about how we educate our people. We’re exporting doctors, lawyers, computer scientists to the rest of the world. But we don’t capture the value increase in those countries because we’re not intentional.

Share your view on the future of the Sino-Africa relationship.

What Africa has to do is understand its genuine power and resources, and that is human capital. And it’s the only investment that can yield the multiples that Africans need to lift themselves off of slow growth.

The second thing is to make sure of the full benefits of the Africa Continental Free Trade Agreement, which everybody needs, including the Chinese. When we build this infrastructure, the next question is, how can we use them to empower ourselves? That way, we don’t come back in ten years and start telling the same sub-story of how people are getting the better of us.

So we must engage with these countries based on national interests. I know many cases where that was not the case, so there’s so much work to do in that front.

How do you value an African startup, and what are your tips for an African diaspora looking to relocate back home?

We have a unique process compared to most investors. While most people value startups on their present value, we value them on expected value at the end of the investment period, because of how early we invest. For example, if I meet a company today, everybody might think, what’s their revenue? What’s their idea? I’m asking a different question. I’m saying, what’s the business model and economics? How can this startup get to sales and scale? And do they know what it takes for us to get there?

I give what I can and encourage the company to raise whatever capital they need. If the startup fails because you under-funded it, you’ve lost your money. And the reason many startups are failing now is due to undercapitalization. What I do is, I look at your business, and you need what, maybe $50,000 to $100,000. I think that’s the point where most businesses get to understand the entire economy and develop some product-market fit. If it’s $50,000 and you have nothing, I’ll take 10% and call it a day.

But if you need more money, I work with other people to put that together. If you will need, say $250 million, to get to positive revenue, and it’s justifiable that we can spend that much upfront, we work with you to put forward a business model and estimate what your value will be.

Not in an optimistic sense, we’re mindful of risks. We keep a balance between providing enough resources for the startup to meet its milestones and ensuring the founders have enough incentive. We have a half cap where we never take over 30% of the company in the first raise.

What’s your advice to African diaspora on moving to Africa?

Build good relationships back home at the very least. That was the one thing I wish I had done when I was coming. My advice is, yes, come home. But before that, it’s a good idea to keep your toe in the water and build quality relationships. These days with remote work, you can do a lot. I think more African diaspora should leverage remote work to support startups in their home countries. People will know you for being helpful before you return.

If you missed the previous installments of this interview series, find them here. To participate in a subsequent edition, send me an email at