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Weekend Briefing No. 158
Welcome to the weekend. Hello from the majestic Fish River Canyon in Namibia (pictured above). As I’m traveling through Namibia and South Africa, I thought it appropriate to bring you a little more perspective of what’s happening on the African continent. So, the next few briefings will have a little more African content than normal. I hope you enjoy!
400m – 400m people use FB Messenger audio and video calls each month.
190 – The number of M&A deals projected for South Africa by the end of 2017. A new report suggests the number will sharply increase by 66% over the following two years.
55 – The African Union recently admitted Morocco as its 55th member, a decision that adds a powerful economy and a Western ally to the continental bloc. It could stir one of the world’s frozen conflicts.
Trump & Africa
The Trump transition team has sent a list of questions to the US State Department about our role in Africa, such as, “With so much corruption in Africa, how much of our funding is stolen?” Though Rex W. Tillerson, called Pepfar “one of the most extraordinarily successful programs in Africa” during his Senate nomination hearing. The Trump transition questionnaire asks, “Is PEPFAR worth the massive investment when there are so many security concerns in Africa? Is PEPFAR becoming a massive, international entitlement program?” Though many of the questions they are asking are the right questions any incoming administration should ask, their framing suggests a narrower definition of U.S. interests in Africa, and a more transactional and short-term approach to policy and engagement with African countries. Learn more at the New York Times (6 minutes).
Nairobi-based Bitcoin payments startup BitPesa (led by Charlene Chen, a member of the Weekend Briefing community) has raised $2.5m in a new Series A funding round led by Draper VC. Africa's diaspora sends a lot of money back home. Remittances to African nations from the US and Europe total over $1b annually. According to the World Bank, Africans pay more than any other migrant group to send money home. Weak competition and flawed financial regulations contribute to the high cost of remittances, the U.K.'s Overseas Development Institute says. BitPesa helps connect African families and businesses to the rest of the world through low-fee Bitcoin exchanges. Back in the US, Rep. Mike Rogers said that he will introduce legislation to charge a 2% tax on remittances from individuals to Mexico and other South American countries to help offset costs of President Trump's proposed border wall. It also could unintentionally open up a new market for BitPesa, which could be used by immigrants to circumvent such rules. Learn more at Coindesk (2 minutes).
While mobile operators continue to lag behind in innovation, start-ups in emerging markets continue to struggle to reach their scale or realize their full potential. So, merging the mobile operators’ powerful distribution and payment networks with the start-ups’ efficiency and high-impact models can pave the way for important and profitable synergies. Kenya’s Safaricom, whose CEO Bob Collymore warned of the risks of not diversifying, partnered with M-Kopa to allow customers to buy solar lighting. The telecom giant also worked with Eneza, an education service that curates mobile courses for its 1.7 million registered users. Learn more at Quartz (5 minutes).
It’s Hard To Be A Startup in MENA
To understand what startups in Middle East and North Africa are up against, consider that most of them will fail. That is true throughout the world, but in a country like Egypt, with no bankruptcy law, failure can mean a prison term if debts are not paid on time. Closing a company can take five to ten years and reams of paperwork. Those that stay in business must navigate outdated legal and regulatory systems that make it difficult to do things that are routine for startups elsewhere, such as paying employees with stock options. Across the region, labor laws tend to make it hard to hire and fire workers, especially foreigners, even though schools fail to equip many locals with desirable skills, such as coding. Tax authorities are often confounded by startups. Learn more at the Economist (7 minutes).
Can teaching disengaged and disadvantaged US high school students how to start businesses propel them to future success? At BUILD students engage in hands-on curriculum and create real businesses with the support of college-educated mentors while learning what BUILD calls “Spark Skills” – communication, collaboration, problem-solving, innovation, self-management and grit. 96% of BUILD seniors graduate on time compared to 73% of low-income seniors nationwide and 81% of all students nationwide. One year alone of BUILD results in up to a 56% increase in on-time high school graduation rates. BUILD serves students in the Bay Area, Boston, Washington, D.C., NYC and LA and is seeking volunteers. If you are in the Bay Area, check out the upcoming BUILD Gala honoring the Golden State Warriors.
One-tenth of the world’s population lacks clean water. Now, researchers report they have developed a cheap solar still, which uses sunlight to purify dirty water up to four times faster than a current commercial version. The raw materials cost less than $2 per square meter. The technology will “allow people to generate their own drinking water much like they generate their own power via solar panels on their house roof.” The setup not only works, but it’s 88% efficient at channeling the energy in sunlight into evaporating water. This allows a 1-square-meter-sized device to purify 1 liter of water per hour, which is about four times faster than commercially available versions. This technological breakthrough is ready to deploy to households without access to clean water as well as to disaster situations. Learn more at Science (6 minutes).
Deloitte just released its 2017 Millennial Survey. Here are some key takeaways: 1) Pessimism. Millennials in emerging markets generally expect to be both financially (71%) and emotionally (62%) better off than their parents. But in developed economies only 36% predict they will be financially and only 31% predict they will be emotionally better off than their parents. 2) Business for good. 76% say businesses, in general, are having a positive impact on the wider society in which they operate, but believe they can do more. 3) Flex. Nearly two-thirds of millennials said they prefer full-time employment to freelance. Millennials’ anxiety about world events and increasing automation may be partially responsible for them wanting to remain in their jobs, but the allure of flexible working options might be just as influential. Learn more at Deloitte (14 minutes).
Let’s Stop Calling Them Soft Skills. I pass along at least one of your leads every week. This one below was shared with 4 people I believe embody and create these qualities. You consistently find ways to describe and practice what we are working for, a purpose filled life for 100m women. Thank you. – Bob Pattillo, Founder Gray Matters Capital
About the Weekend Briefing
Thanks for making the Weekend Briefing a part of your Saturday morning routine. I love putting it together every week and love hearing your thoughtful insights. Feel free to shoot me an email with any feedback or suggestions. If you like what you’re reading, I’d be honored if you share it with your friends. Have a restful and thoughtful weekend.