The African Diaspora Starter Pack
Africa's multi-billion dollar opportunity is outside of the continent
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Africa’s diaspora is a force to be reckoned with.
At 150 million people, they sent $53 billion in remittances back home in 2022. They are the continent’s largest financiers, holding up the economies of countries.
In Gambia, remittances made up 28% of GDP.
Africans in diaspora are Africa’s largest financiers. Remittances from the diaspora to Africa grew from $37 billion in 2010 to $96 billion in 2021. Total Official Development Assistance to Africa in 2021 was $35 billion or 36% of remittances from diaspora. Prioritize their voice!
— Akinwumi A. Adesina (@akin_adesina)
Dec 3, 2022
A quick definition: African diaspora is a catch-all term for people of African origin living outside the continent.
Africa’s diaspora is so big, it is a country in itself. And just like any country..
Africa’s diaspora have their problems, too
And not just my problems as a second-generation migrant (like strict parents, high expectations and getting the belt).
There are sticky problems moving overseas and then settling in.
Moving abroad starts with a long, complicated migration process. Getting a visa as an African overseas is hard and expensive.
When you do manage to move, financial services (like banking and credit) are hard to access in your new home country.
@calebmaru “My credit score is not bad, I just don’t have one”😂
— Ona Aliakai (@OnaAliakai)
Mar 8, 2023
Then once you get home and settle in, a new set of challenges emerge.
How do you send money back home to friends and family (without spending half of it on transfer fees).
Caring for your family’s health from abroad.
Tapping into your culture and community in your new country.
Africa’s diaspora face unique problems.
But where there are problems, there is opportunity. And where there is opportunity, there are startups.
So it’s no surprise that a set of startups now build specifically for Africa’s diaspora.
Introducing.. the African Diaspora Starter Pack
In what I dub the (real) African Diaspora Starter pack, I’ve categorised companies building for Africa’s diaspora into six categories:
- Migration 🛩️
- Financial Services and Banking 🏦
- Remittances 💸
- Care ❤️🩹
- Community 🫂
- Entertainment 🍿
Let’s dive in.
A few weeks back we explored Africa’s ‘Japa’ wave - the mass migration of young people outside of the continent.
Startups like Vesti are letting Africans become diaspora - helping them move seamlessly to countries like the United States and the United Kingdom. I call this category migration-as-a-service.
I held an event with Vesti last week on the barriers to moving abroad which you can listen to here.
Financial Services + Banking 🏦
Financial services for recent migrants. The two biggest problems in this camp are banking and credit.
Moneco is answering the banking question in Europe - building a bank around Africa’s diaspora with features like mobile money, low-cost remittances and saving circles which are common across Africa (and known as SACCOs).
Betascore is a startup addressing the credit question - helping Africans build credit history before they move overseas. This lets them access rental services, student loans and mortgages abroad.
Moving money to emerging markets is expensive - and most expensive in Africa. While this is older data (2016), about ~10% of the money sent to Africa will be eaten up by transaction costs.
The remittance problem has become one of the most sought-after opportunities across the continent and is the most developed category of Africa’s Diaspora Starter Pack.
Fintech startups are making it cheaper and faster to send money to family and friends back in Africa.
The bigger players are Chipper Cash, Sendwave and NALA. But there are dozens (if not hundreds) of players who want a piece of the $53 billion dollar pie.
The real question is how many winners can there be? But that’s for another time..
Taking care of family back home. While sending money (remittances) home can cover this, some startups are letting diaspora take better, specialised care for their family back home.
Fleri helps diaspora create healthcare plans for their family in Africa. This helps diaspora direct where their money is spent (rather than just sending money back to family).
Awabah also helps diaspora save pensions for their family back home.
P.s., I’m hosting an event next week called the African Diaspora Starter Pack with founders of Fleri and Awabah. We will dig into how Africa’s diaspora can contribute to the continent (other than just sending money back home). Register to come along here.
African diaspora have shared experiences, and moving abroad (or being born abroad) can be an alienating experience.
Communities like Afropolitan connect Africa’s diaspora on the internet and through community meetups across the world.
I grew up with the first generation of young African immigrants who broke into Tech in the San Francisco/Silicon Valley area. Folks who worked at Google, Facebook, Uber, etc. Young Africans with six-figure salaries that their immigrant parents could only dream of at their age.
— Eche Enziga 🅰️🌶 (@Echecrates)
Nov 27, 2022
Other communities are more professional in nature - like Movemeback, which connects Africa’s diaspora with career and investment opportunities back on the continent.
While content streaming services like Netflix and Showmax are starting to grow their African catalogues, platforms that provide specifically African content are on the rise.
Avetol is an example of this - a newly launched video streaming service that caters to Ethiopia’s diaspora (of 2.5 million people).
IrokoTV is an older take on a localised streaming platform, launching in 2011 in Nigeria.
Rather than just targeting viewers in Africa, they target Africa’s diaspora - who have deeper pockets and want to engage with their culture back home.
Texas is the #1 state in our #1 🇺🇸market for @irokotv subscribers. In terms of culminative revenues we have made the most amount of money here since we started almost 10years ago. Its my first ever trip here in all that time🙈🇺🇸. Scammed by the giant of Africa narrative 😭🇳🇬😭.
— JasonNjoku (@JasonNjoku)
Jul 26, 2021
A friend of the newsletter and great writer, Emeka, wrote a great article IrokoTV’s transition to servicing the diaspora (which you can check out here).
Africa’s diaspora goldmine
African diaspora’s problems are a goldmine of opportunity for startups.
The African Diaspora Starter Pack is a guide to the African diaspora’s problems and the startups trying to solve them.
What do you think of the African Diaspora Starter Pack?
Are there companies I missed? Problems I haven’t included? Let me know on LinkedIn here! I may do a part two
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