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Africa’s New Silicon Valleys

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Perhaps most famously, Route 128 and Silicon Valley in the United States developed around the Massachusetts Institute of Technology and Stanford universities, while key European knowledge regions developed at the Sophia Antipolis high-tech park in Côte d’Azur, France, and the Leuven region in Belgium.

In Africa, however, it is a relatively new phenomenon. But some universities on the continent are working towards setting themselves up as catalysts of innovation and entrepreneurship. Notable mentions must go to the University of Nairobi and the American University in Cairo, but South Africa is leading the charge.

The likes of Stellenbosch University, the University of Cape Town (UCT) and University of the Witwatersrand (Wits) are focusing more than ever on equipping their students to be entrepreneurs, primarily in response to unemployment issues in the country. Almost 50% of those aged between 15 and 24 in South Africa are without a job, and some tertiary institutions are adapting by equipping them to become job creators.

READ MORE: Forbes Africa Under 30 Technology Entrepreneurs

Bakang Moetse is Impact Investing Project Manager at the Bertha Centre, a dedicated entrepreneurial unit within the Graduate School of Business at UCT. She says high youth unemployment had made the promotion of entrepreneurship an imperative for many African governments.

“Whilst government may be responsible for creating an enabling environment for the development of businesses, universities play a key role in delivering skills and expertise, as well as creating enabling environments for incubation of entrepreneurs,” says Moetse.

Universities also stand to gain. At a time when the relevance of university degrees has come into question due to the number of unemployed graduates and lack of employment readiness of those graduates who do enter the workforce, promoting entrepreneurship provides a way of ensuring universities continue to be recognized as key to the development of societies and economies.

“For universities interested in taking on a more active role in this regard, there is a competitive advantage to be gained in becoming leaders within this field of research, which can further bolster their credentials,” says Moetse.

Stellenbosch University runs its own incubator – LaunchLab – and also invests in some student-run tech startups. Head of Incubation Brandon Paschal says universities that do so will produce more employable and resilient graduates, and their reputations will grow as such.

“Also, with the current student fee climate, if universities are not backing and pursuing commercializing university technology, their financial sustainability and broader access to tertiary education is in jeopardy,” he says.

So how have startups incubated by universities benefitted? G-J van Rooyen was an associate professor at Stellenbosch, and launched his bitcoin-based anti-piracy startup Custos Media Technologies out of LaunchLab. He says it had been a great space from which to grow an early-stage company.

“At a startup, you’re constantly juggling concerns and issues. Being in a supportive environment where space and facilities are one less thing to worry about makes a huge difference,” Van Rooyen says. “Since LaunchLab is a hub for startups and investors, it directly impacted our fundraising efforts, and introduced us to our angel investor.”

Michael-John Dippenaar’s on-demand storage space startup Sxuirrel first encountered LaunchLab after winning a competition run by the incubator, earning funding and support.

“Amongst other intangibles thereafter, and in the period leading up to then and now, we gained help in the form of advice, community and networks,” Dippenaar says.

“We had support in finding lawyers, connecting to additional entrepreneurs to learn from, and access to soft-skill building resources.”

READ MORE: Investment Marketplace Coming To Africa

Training students – and professors – in entrepreneurial skills and providing them a safe space from which to launch their ideas in one thing, but universities also need to ensure they have solid links with corporates and funders to help incubated startups scale. This can be a challenge.

However, Tine Fisker Henriksen, Senior Project Manager, Innovative Finance, at Bertha Centre, says the credibility associated with university brands lends itself to bringing in new partnerships and streams of funding entrepreneurs on their own would not be able to tap into.

“We are seeing increased interest from the corporate sector to get involved in supporting entrepreneurship, and we have managed to establish partnerships that have been valuable in this regard,” she says.

“From our point of view, there is great potential to expand this beyond mere sponsorship of events and once-off fundraising, as is commonly the case, and move in the direction of more sustainable partnerships approaches for rising entrepreneurs.”

The initiatives at places like Stellenbosch and UCT are well developed, with a track record of helping startups launch and raise funding for their next stage of development, but are enough universities following their lead?

Paschal says there is some evidence of this, but it takes time to transform very traditional and conservative institutions. Part of the challenge is that “startup skills” are intangible, EQ-related things that you cannot learn in a classroom.

“The push for universities spinning out companies, and supporting startups and SMEs, is disrupting the traditional role of universities. The trend is going in this direction, but generally universities are battling to get beyond the academic side,” he says.

Henriksen agrees more needs to be done.

“We have seen the top universities develop more entrepreneurial courses, hubs and initiatives. But there is definitely room for greater involvement, and coordination of efforts in this space to create a synergized impact,” she says.

– Tom Jackson

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The Efficiency Of Mining With Drones

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Can mines become more efficient – and safe – through tech? Robots, drones and virtual reality tools are now being used for sophisticated drilling operations.

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The Fight of a Bot Named Madiba

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For one of the biggest robotics competitions on earth, a team of Generation Z-ers from South Africa made their way to Mexico accompanied by a robot with the fists and fury to fight.

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MultiChoice, Africa’s Biggest TV Operator, To Be Listed By Naspers, Africa’s Largest Public Company

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Koos Bekker, billionaire and chairman of Naspers Ltd., reacts during an interview at his office in Cape Town, South Africa, on Thursday, May 7, 2015. South Africa lacks a coherent economic policy and government departments are failing to work together, said Bekker, chairman of Africa's biggest company. Photographer: Halden Krog/Bloomberg via Getty Images

 

Naspers, the emerging markets internet and media giant which is the largest public company in Africa, will list its satellite television subsidiary MultiChoice, it has announced.

MultiChoice’s DStv service is the biggest TV operation in Africa, broadcasting to some 50 countries, and was one of the first satellite companies to pioneer the then newly-minted digital broadcasting when it began in 1996.

The spun-off company will be listed on the Johannesburg Stock Exchange (JSE) and will be known as MultiChoice Group. It will include MultiChoice South Africa, MultiChoice Africa, Showmax Africa, and Irdeto. Naspers will retain its primary listing on the JSE.

“This marks a significant step for the Naspers Group as we continue our evolution into a global consumer internet company,” said Naspers CEO Bob van Dijk. “Listing MultiChoice Group via an unbundling aims to unlock value for Naspers shareholders and at the same time create an empowered, top-40 JSE-listed African entertainment company.”

MultiChoice has been part of Naspers’ Video Entertainment division, which had revenue of ZAR47.1-billion ($3.1-billion), a trading profit of R6.1-billion ($401.6-million) and added 1.5-million subscribers in the last financial year, according to Naspers figures. It “is one of the fastest growing pay-TV operators globally. Its multi-platform business entertains 13.5-million households across Africa.. and employs more than 9,000 people in Africa,” it said. A further 20,000 people are employed by its partners and suppliers on the continent.

MultiChoice offers online streaming services called ShowMax (which offers a pure-play service in Poland) and DStv Now.

“The Video Entertainment business is an African success story. This unbundling and listing is expected to deliver value to the South African economy as well as to Naspers and Phuthuma Nathi shareholders. Naspers will continue to invest in South Africa through our interest in e-commerce business such as Takealot, Mr. D Food, PayU, OLX, Property24, and AutoTrader, amongst others,” Van Dijk added.

Phuthuma Nathi is a Black Economic Empowerment (BEE) scheme in South Africa, BEE is government policy designed to redress the injustices of Apartheid. The unbundling is subject to regulatory approval in various African countries.

“Listing and unbundling MultiChoice Group is intended to create a  leading entertainment business listed on the JSE that is profitable and cash generative. WE offer an unmatched selection of local and original content, as well as a world-class sports offering. Our leadership team is diverse, experienced and well-positioned to take the company forward,” said Video Entertainment chief executive Imtiaz Patel. “There are growth opportunities for MultiChoice Group in Africa. The combination of MultiChoice’s reach, Showmax and DStv Now’s cutting-edge internet television service, alongside Irdeto’s 360-security suite will provide a unique offering. Our customer focus, international and local content, and pioneering technology places MultiChoice Group at the forefront of African digital transformation.”

Earlier this year Naspers sold a 2% stake in Tencent for nearly $10-billion to fund its internet growth and offloaded its share in Indian e-commerce business Flipkart to Walmart. In mid-2016, Naspers became the first South African company to reach the magical R1-trillion valuation.

For decades MultiChoice was the crown jewel of the Naspers stable, until its internet interest – especially Tencent – became the group’s focus. The first channel, called M-Net, was the brainchild of Koos Bekker, now Naspers chairman, who was studying for an MBA at Columbia University. At the time it launches in 1986 M-Net was one of only two pay-TV channels in the world.

Bekker told me that he had seen the success of HBO during his studies and approached Ton Vosloo, then CEO of Nationale Pers (Naspers), a large newspaper group with Afrikaans-language publications, with his idea. Vosloo was keen to find another revenue stream for Naspers which had been awarded a broadcast license by the South African government to compensate them because significant advertising revenue was being spent with the state-owned South African Broadcasting Corporation (SABC).

DStv’s first broadcast in October 1986 was the final of a provincial rugby competition, called the Currie Cup, between provinces then known as Western Province and Transvaal.

But, with massive capital investment and huge overheads, within a year it faced severe financial pressures as it struggled to attract customers.

“By Feb [19]87 our viewing audience was so pathetic we had to give make-good ads to advertisers on the basis of one-paid, two-free,” Bekker told me at the 30th anniversary of M-Net in 2016, where a holographic depiction of Trevor Noah reminisced how integral and influential the channel had been to South African culture.

“By March [19]87 our trading results were turnover of half a million Rand, loss of ZAR3,5m for the month. Since our backers were newspaper groups of small to moderate size, they couldn’t bear that sort of bleeding. We were a few weeks away from the end.”

MultiChoice’s strategic advantage was its choice of new technology (well-made decoders) and a clever change in strategy (from selling to apartment complexes and to single homes), something Bekker would prove adept at doing when he bought a one-third stake in 2000 for $30-million in a then-unknown Chinese messaging company called Tencent, whose QQ instant messaging service now has over 1-billion customers.

The decoders “sold sweetly, since we now needed to persuade only a single guy and it didn’t matter what his neighbors thought”.

M-Net “scraped through by the skin of our teeth, and by the end of [19]88 were breaking even on a monthly basis” and became profitable in 1990. It was listed a year later and Bekker took over as Naspers CEO in 1996, a decade after his big gamble on the nascent digital television market had become a roaring success.

Bekker is now one of South Africa’s best – and best-known – businessman. His gamble on Tencent has made Naspers the most valued listed company in Africa, after AB InBev bought South African Breweries. It is the most valuable media company outside of the US and China and the seventh largest internet company in the world.

Naspers growth and status, as well as its entrepreneurial culture, is because of Bekker, who also brought “equality to this business right in the beginning, thanks to Koos. He set the pace for how the public company in the new coming South Africa would have to look. No discrimination whatsoever.”

He added: “The outlook of being together and all being equal, and no discrimination, set the pace and the scene like no other public company had done up to that time. So in that sense, M-Net is the great pioneer that led us into the new South Africa.”

Vosloo repeated a mantra that has defined both Naspers’ risk taking and Bekker’s first-name leadership style: “Of course he was known as Koos, and everybody says Koos Says So.”

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