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Start-Up Bets on Tech Talent Pipeline From Africa

By 10/10/2017June 7th, 2020No Comments

Source: The New York Times –

When Tolulope Komolafe first heard the pitch, she was skeptical. A fledgling company in Lagos, Nigeria, would pay her to learn how to write modern computer code and then offer her a good job in the high-tech economy.

“I thought it was a con,” she recalled. “Too good to be true.”

After inquiring, Ms. Komolafe found the offer was real. Today, she is a software developer, working remotely from Lagos for a start-up in New York, and she dreams of starting her own tech company someday.

Ms. Komolafe, a 27-year-old Nigerian, is one of hundreds of young Africans who have joined Andela, a fast-growing start-up based in New York that has attracted the attention and money of people like the Facebook founder Mark Zuckerberg and works with blue-chip companies like Mastercard.

The company’s ambitious agenda spans education, economic development and moneymaking. It is betting on its ability to build out a talent pipeline of African software developers to the United States and elsewhere, tapping into a continent eager to connect to the global digital economy.

Jeremy Johnson, Andela’s chief executive, says the company offers “a very different model for unlocking human potential.”

The animating idea behind Andela, founded in 2014, is that Africa has plenty of smart people, but that they too often lack the preparation for and pathways to gainful jobs — the missing ingredients that Andela can provide in the field of software development.

Not only does Andela instruct people in person, but 20,000 aspiring programmers across Africa have used its free online learning and training tools. By 2024, Andela hopes to have helped prepare 100,000 software developers in Africa for jobs, including thousands working for Andela.

After six months of paid training, the Andela employees become remote members of software development teams at companies. The current roster of 112 customers includes Viacom, Mastercard Labs, GitHub and SeatGeek in the United States, and clients in 10 other countries.

“This is a platform for giving people who want to learn and succeed access and opportunity,” said Seni Sulyman, a 32-year-old graduate of Harvard Business School, who is the country director for Andela in Nigeria.

The challenge for Andela will be expanding its model to meet its lofty growth targets. “Andela has delivered on its promise so far, but can it keep finding high-quality talent and finding relevant employment for them as it gets bigger?” asked Aniedi Udo-Obong, a Google program manager who works with software developers in Africa.

Andela’s growth plans got an enthusiastic endorsement this week from its financial backers, with a $40 million round of venture funding that lifts the total the company has raised to $80 million. The new investment was announced on Tuesday.

The start-up has attracted a group of top investors that find both its business model and its mission appealing, including GV (formerly Google Ventures) and Spark Capital.

It was also the first lead investment for the Chan Zuckerberg Initiative, which Mr. Zuckerberg and his wife, Priscilla Chan, set up in 2015 to eventually invest most of their Facebook wealth to “advance human potential and promote equality.”

During a tour of Africa last year, Mr. Zuckerberg visited Andela’s Lagos office and told the employees, “You are all part of something that’s really important.”

Spark Capital and the Chan Zuckerberg Initiative were the lead investors in two earlier rounds of funding for Andela. CRE Venture Capital, based in Cape Town, South Africa, is the lead investor in the new $40 million round, the largest venture round led by an African firm, said Pule Taukobong, a founding partner of CRE Venture Capital.

Andela began with a founding team of six — three Africans, two Americans and a Canadian — and an initial test class of four students. It now employs 800 people, and it expects to double that number in the next year. While it has its headquarters in New York and a small office in San Francisco, 90 percent of its workers are in Africa, with offices in Lagos; Nairobi, Kenya; and Kampala, Uganda.

Though growing fast, Andela has been highly selective. Applicants undergo dozens of online drills to assess everything from technical ability to personality type. About 3 percent of the applicants are invited to a two-week boot camp, and a final cut takes the acceptance rate below 1 percent.

The new hires get a MacBook computer, subsidized housing and two meals a day during their six-month training program. In that time, Andela invests $15,000 in each developer. Starting salaries are low, but after the developers begin working as billable contractors for companies, their pay rises, up to $30,000 or so, comparable to salaries for young professionals in Africa’s urban centers.

Andela makes money much like consulting or law firms. It charges clients per worker, with part passed on to the worker as salary and Andela collecting the remainder. The company declined to detail its billing practices.

Andela’s recruits sign contracts for two years, but are expected to stay for four years. That longevity is part of the business model, since the work of developers on contract to customers helps pay to recruit and train new hires. So far, the retention rate is 98 percent.

None of the developers have hit the four-year threshold yet. Andela would be happy to have them stay beyond that, but it is also encouraging them to go work for other companies or start their own. It is setting up an Andela accelerator to nurture alumni start-ups.

“We want them to go out to become leading entrepreneurs and leading technologists in Africa,” Mr. Johnson said.

The Andela developers are young — the average age is under 25 — and 70 percent have computer science or engineering degrees. But university curriculums in Africa, technologists say, tend to emphasize theory rather than modern programming tools and the techniques of fast-paced software development in teams.

Olufunmilade Oshodi, a computer engineering major in college, had done some programming before, but his practical skills have been acquired since he joined Andela two years ago. Today Mr. Oshodi, 25, leads a group of eight Andela developers working for the Zebra, a car insurance comparison website based in Austin, Tex.

Last year, the company needed more engineering talent to expand. But with Google and Facebook hiring in Austin, the company did not want to compete in the escalating bidding war for local talent, said Meetesh Karia, Zebra’s chief technology officer.

Instead, it gave Andela a try.

The developers, Mr. Karia said, have worked out well — aided in part by Andela’s customized approach to outsourcing.

Andela sends its developers to customer sites to meet people and learn about the client’s business. Mr. Oshodi spent a month in Austin last year, and recently finished another three-week visit. He and the other Adela programmers have been invited to backyard barbecues and nights out in downtown Austin.

“They know my family. They know my kids,” Mr. Karia said. “They are really part of the team.”

The Andela developers are on the same corporate mailing lists and chat channels as Zebra employees. When back in Africa, the Andela members of the team participate in the daily “stand-up meeting,” where developers talk about their work and plans, usually via a video link.

One of the initial group of developers, Mr. Karia said, did not work out. But Andela soon replaced that person. Now, Mr. Karia said, “I would love to hire all eight” when their four-year commitments to Andela are over.

Mr. Oshodi’s four-year clock runs out in 2019. Until then, he said, he wants to steadily enhance his product development and management skills. He has not decided what comes next, but he is optimistic.

“If you put yourself in a good place,” Mr. Oshodi said, “opportunity comes.”