How Microsoft 4Afrika is providing value for startups and SMEs across Africa

Microsoft was one of the partners and series A sponsors of Techpoint Build 2019
Microsoft is supporting SMEs and startups around the continent through a market development engine, Microsoft 4Afrika
The initiative looks for 3 qualities in SMEs and startups: scalability, sustainability, and use of cloud technology

Thousands of Africans gathered last weekend in Lagos for the 2019 edition of Techpoint Build, where startups and SMEs came to pitch ideas for the prize of $10,000. Nigerian real estate startup, Estate Intel, won the competition. One of the major partners of the event and series A sponsors of the startups was Microsoft.

One of the things Microsoft is doing is to support SMEs and startups around the continent through a market development engine, Microsoft 4Afrika. “Microsoft realises that we need to make investments into the African ecosystem to be able to drive businesses to a point where they can begin to leverage the right technology to grow,” Soromfe Uzoma, Microsoft 4Afrika’s Head of Strategic Partnerships, tells me during an interview at the event.

“We believe that SMEs are the engine of the economy and that they can drive value. In Nigeria alone, there are between 18 and 37 million of them, depending on the number you’re listening to. So we have to find a way to give them the support they need to grow their businesses,” he adds.

Microsoft 4 Afrika develops SMEs in three ways: access to energy and connectivity, skills development, and innovation -- where we invest in organisations that have scalable and sustainable solutions to African problems and led by African founders.

Soromfe Uzoma CIO East Africa

“For Microsoft as an organisation, we can’t speak to every SME. In Nigeria alone, they say there are 18 million of them. It’s almost impossible for us to have a system that allows us speak to all of them. So, what we’re doing across the continent is to identify critical stakeholders in the value chain for SMEs. Based on our analysis, they typically fall into 3 or 4 categories,” he says.

“You would have your financial institutions, your telecoms organisations, and your government institutions or aggregators. We try to engage with these entities and, through them, provide value to all the SMEs,” he adds.

How the Microsoft 4Afrika initiative provides value to SMEs and startups

Microsoft 4Afrika provides values to SMEs through:

Capacity development: The initiative provides training content that is Africa-related for the businesses to consume and grow.
Connecting them to subject matter experts: “You’re looking for how to optimise your operations as an SME, you want to know what best practices are, we can find the head of operations for one of our Microsoft branches around the world to come into your country, work with a local expert, and provide you with the broad global view, the local context, and how you can apply them to grow your business,” Uzoma says.
Innovation: “We invest in organisations,” he says, “But with us, it’s not so much the dollar figure -- we’ve done $5.1 million in reciprocated investment over time -- but the real value is having the stamp from Microsoft that says ‘we believe this organisation will scale in the long term’. If you stand in front of VCs and tell them you’re working with Microsoft to increase our technology or drive our business, it increases your value in front of those venture capitalists.”

3 important qualities Microsoft 4Afrika looks for in startups and SMEs

1. Scalability: Your business has to be one that has market appeal and huge market potential.

2. Sustainability: “It’s not something that you solve for one year and then the market opportunity disappears. It has to grow. It should be something we know that we will invest in today and in 5 years’ time, we would continue to see growth,” Uzoma says.

3. Use of cloud technology: Your business has to be leveraging cloud technology before it can be selected. Uzoma explains that this is because Microsoft believes cloud technology gives you the opportunity to be flexible and allows you to operationalise your capital expenses.