Sheba Valley: The Making of Ethiopia’s Tech Sector

The US has Silicon Valley, Nigeria its own Yabacon Valley and Kenya, Silicon Savannah. Well Ethiopia has Sheba Valley as its emerging tech space in the making.

Think of Silicon Valley and all the technology companies, how they transformed our lives from the way we communicate to the way we bank to the way we shop. Today, similar tech sector innovations are popping up not only in California but in emerging markets like Ethiopia too.

Read below for examples of the traction being achieved in Ethiopia.

Ethiopian Tech Gains Momentum

Within the investment portfolio of American billionaire Tim Draper is Nigeria’s fintech firm, Paga. Its platform was built, maintained, and is currently being supported by engineers at Apposit, a software engineering company based in Ethiopia.

Artificial Intelligence (AI), including emotion detection & voice/facial recognition for the cognitive part of Chinese Humanoid Robots, is being developed by AI experts from Icog-Labs in Ethiopia. Co-created with the help of the American researcher Ben Goertzel, Icog-labs is the first Ethiopian research and development laboratory specializing in AI.

Gebeya is building a self-sustaining ecosystem that trains, hires, and incubates the best of African talent. It has its headquarters and training facility in Ethiopia, graduated 70 innovators from across Africa last May, and currently has a roster of 140 IT experts on its platform. Gebeya is poised to release an amazing product from one of its incubated startups in the summer of 2017.

A product that offers taxi hailing services through text messaging & app/online booking is developed and managed by a company dubbed an ‘African Uber’ – Zayride of Ethiopia. It has also added delivery services and account management for corporate users. Zayride’s software is designed to meet market needs and compressed in such a way that it doesn’t require fast internet connectivity when in use.

One of the world’s most cutting edge high technology firms, dVentus Technologies, has several patented products and produces smart power converters, wind turbines, propulsion systems for clean energy vehicles, and exports products to the US & Europe. It boasts a live advanced monitoring system, complete with big data analytics, that manages smart grids of global cities from its office in Addis Ababa, Ethiopia.

Ethiopia’s first online payment solution, Yenepay, is designed, managed, and run by young engineers in Ethiopia, unlocking e-commerce transaction possibilities.

Iceaddis runs an incubation and innovation community center aimed at supporting Ethiopia’s economic growth through technology in Addis Ababa; it has incubated 25 start-ups to date. among the various businesses nurtured by Iceaddis are 50 Lomi (developers of ERP systems designed to thrive in unreliable internet connectivity environments) and Flowius (providers of affordable piped water systems to rural homes). 50 Lomi has implemented its ERP in the largest hospital in Ethiopia and Flowius was accepted into the Silicon Valley-based water innovation accelerator, ImagineH2O, in March 2017.

Kifiya, a fintech company operating since 2010, enables Government to Citizen (G2C) & Business to Consumer (B2C) transactions, branchless banking, and digital payments. In July 2017, it signed a partnership with Mastercard for an international remit-to-pay service enabling families and friends abroad to pay for bills using their debit cards, credit cards, mobile wallets, or directly from their bank account from anywhere in the world. This is “first of its kind (innovative solution in Africa) and hopefully will create a new class of remittance solutions,” according to Kifiya’s Founder & CEO Munir Duri. The partnership will help to capture and streamline some $2 billion (out of ~$5 billion) annual Ethiopian diaspora remittances.

A mere coincidence? Far from it. With a population of 100 million (with a median age of 18), Ethiopia is the second most populous nation in Africa. The nation spends an average of 12% of its annual budget on education, according to the World Bank. Moreover, a recent Deloitte report (pdf) called Ethiopia ‘a growing miracle’ as “over the last decade, investment in Ethiopia has ratcheted up and is now amongst the highest in the world, relative to GDP.” In addition, the country is among the global leaders for infrastructure investment. Relative to infrastructure investment, the telecom sector in Ethiopia is crucial to the emerging tech space.

Standing on the Shoulders of a Giant

Ethio Telecom is the state-owned telecom giant providing telecom and internet services across Ethiopia. The booming tech sector relies on Ethio Telecom to enable infrastructure and internet access. Ethio Telecom launched 4G LTE services in March 2015 and has ~21,000 km of fiber routes in the country. The telco invested some $1.6 billion in network infrastructure in 2016 alone, and currently serves approximately 68 million mobile phone subscribers.

Ethio Telecom is currently building its headquarters at the ICT Village in Addis Ababa, which is expected to be ‘the premier IT hub of Africa.’

Is Ethio Telecom capable of providing Sheba Valley’s tech gurus with strong connectivity and access? As an example, Gebeya, receives 15 mbps download and 18 mbps upload speeds at its headquarters, while the satellite TV channel, Kana TV, that has its facility in the same building receives at least 40 mbps speed for its live satellite TV transmission. Is this connection good enough for innovative businesses that heavily rely on super-fast computing processing and connectivity?

To answer this, let’s consult the Q1 2017 State of the Internet Report by the content delivery network, Akamai. The report highlights Kenya as a leader for internet connectivity speeds noting that “…at 13.7 megabits per second, Kenya’s average data connection speed in the first quarter of 2017 was almost twice as fast as the global average.” It is clear then that, when it comes to fiber optics internet connectivity, Ethiopia has the infrastructure and capability to supply faster speeds than what has been acclaimed in Kenya.

Does this mean, then, that all is rosy and Ethiopia’s tech sector is ready to compete and thrive globally? Unfortunately, despite the rapid development occurring, there remain challenges and hurdles innovators and investors need to overcome for global competitiveness. For example, infrastructure levels need to continue to be strengthened and, while Ethiopia has the talent pool, investment in human capital needs to be increased. There is a gap relative to resources, direction, mentorship, and personal/business skills that the ICT government organs, associations, and incubating firms like Gebeya, Iceaddis, and Blue Moon are trying to address.

“One or two big international investments into the local tech sector, and possibly a few successful exits… will be a turning point to put Sheba Valley in the global map,” commented one seasoned Ethiopian tech investor. “Now is that time for early-mover advantage for investors,” says Bereket Dubale, who in 2016 moved back from his post-graduate studies in the U.K. and until recently was working as a freelance researcher for Asoko Insight in Ethiopia. “I have daily interactions with these change-makers & innovators and the constant theme is they are hungry for strategic partners who not only provide required equity and forex funding, but also technical and market know-how and international collaboration.”

Given that a few of these tech companies are currently in seed/’Series A’ funding rounds, and others are in direct negotiations with international tech investors, the time for Sheba Valley to herald new beginnings to the Ethiopian tech space is just round the corner.

Exploring Products & Services from Sheba Valley

While there are many innovative solutions and products currently being developed, here is a selected sample of products & innovations to be expected from Ethiopia’s tech sector in the months ahead:

Kukulu: An authentic African mobile game of a run-away chicken, conceived, developed and on the verge of release by a startup tech company “composed of the most daring and outrageously visionary minds,” Qene Technologies. Kukulu is currently being incubated by Gebeya. When the game is released in summer of 2017, the question will not be ‘why did the chicken cross the road?’, but ‘how fast can the escapee chicken run and elude its captors?’ and ‘how many times the game is downloaded and played across the world?’

Waziup: A product based on IoT (Internet of Things) technology targeting specific sectors of Africa’s economy such as agriculture, aquaculture, and the environment, with big data analytics from weather pattern forecasting to smart farming (to the point of detecting a hungry fish).

Mi-sika: A Fintech solution towards fluid money transfer between citizens of Africa and their diaspora counterparts, developed by engineers in Ethiopia for clients in Ghana.

Sew: A real-time vitals monitoring system that aims to revolutionize health care provision and provide vital big data analysis for proactive, predictive, and preventative healthcare management by governments and health institutions. It incorporates both a product (monitoring device) and a system (communication and big data analysis).

Arifpay: An online payment solution for taxi ride services developed by Zayride and integrated with banking services and smart phone applications in Ethiopia.

The Bible tells the tale of Queen Sheba and her travels to Jerusalem to hear the wisdom of King Solomon. Arriving in a large caravan with gold, spices, and other treasures, she offered the largest quantity of balsam oil and precious stones ever brought to King Solomon.

Like the Queen of Sheba’s gift, Sheba Valley in Ethiopia is poised to provide the world with innovative solutions, products, and technological advances in the coming years.