From YC Advocate To Replacing YC: Inside Iyin Aboyeji’s Bold Bid
Iyinoluwa Aboyeji, the Nigerian tech entrepreneur and investor notable for co-founding two African tech unicorns, says he’s done a bit of a one-eighty on his long-held conviction in the indispensable role of the renowned global startup accelerator, Y Combinator (YC), in Africa’s tech scene.
“For a long time, I told anyone who cared to listen that the YC of Africa is YC and there was no need for an African accelerator,” he shares in a recent LinkedIn post.
“I’ve changed my mind,” Aboyeji goes on. “This week my partner Mia von Koschitzky-Kimani and I announced that we are for the first time launching a full-fledged accelerator program that we hope will become the ‘YC for Africa’.”
Aboyeji and Mia von Koschitzky-Kimani recently announced the launch of Accelerate Africa, a new accelerator program backed by a USD 750 K USAID grant. The initiative aims to become a catalyst for the next wave of African startups and fill a void left by the retreating global investors.
The why behind the ‘YC for Africa’
For a long time, global accelerators like YC and Techstars have provided early-stage African startups with a sure path to global scale with well-renowned global investors; YC-backed African startups have cumulatively raised over USD 1 B. Now, however, Accelerate Africa emerges against the backdrop of a changing venture capital landscape.
Global accelerators and funders, including the renowned YC, are cutting back interest in Africa. After adding dozens of African startups to its portfolio in recent years taking the count to 95, only three African startups made it into the YC’s Summer 2023 batch.
This is a far cry from the Winter 2022 batch when 24 startups from the continent took part. The number of African startups taking part in YC has steeply declined since; there were only seven in the summer of 2022. Recent news of a few YC-backed African startups going bust under controversial circumstances has hardly helped.
Aboyeji, co-founder of Future Africa; a local venture capital (VC) firm writing early-stage cheques, acknowledges the global capital crunch and the changing dynamics in his LinkedIn piece. The shift in focus from global to local ecosystems reflects a strategic response to the challenges faced by African startups.
The techpreneur also points out the specific challenges faced by startups on the continent, such as limited access to local venture capital and the increasing scarcity of global accelerator opportunities. The latest initiative, born out of a decade-long journey supporting startups through pre-accelerator programs, aims to address these challenges head-on.
An ambitious pitch
Aboyeji envisions Accelerate Africa as the ‘YC for Africa,’ signalling an ambition to foster the next generation of globally successful businesses. The accelerator plans to admit ten pre-seed and seed-stage startups from any of Africa’s 54 countries, offering an eight-week program. The goal is to provide tailored support to founders in storytelling, team building, business development, and product development.
One distinctive aspect of Accelerate Africa is its emphasis on an African perspective.
“This coming of age requires that we divorce ourselves of Silicon Valley’s templates and forge our own unique path,” he writes. “It means building a different kind of technology business – not fintech but real tech, not unicorns worth billions of dollars but unicorns making billions of dollars, not imported founders building solutions for the tiny minority who look like them and live in Victoria Island but gritty founders who want to solve real-world problems for the vast majority of Africans who require technology solutions that can make them more productive.”
Aboyeji believes that having a deep understanding of the local market and established connections with regulators and financial institutions will set Accelerate Africa apart. The program aims to guide startups with insights grounded in the realities of Africa’s business landscape.
Accelerate Africa’s focus on understanding African markets and leveraging local networks could provide startups with a more tailored and contextualised support system.
Additionally, the decision to run the program in person, in contrast to the trend of remote programmes, may enhance collaboration and foster a sense of community among startups, potentially leading to stronger, more resilient businesses.
A caveat of sorts
As global backers withdraw, Accelerate Africa has the opportunity to fill the void, becoming vital in the African startup ecosystem and attracting attention from both local and international investors.
However, unlike some accelerators, participation in Accelerate Africa does not guarantee funding from the accelerator itself. This could be a challenge for startups expecting financial backing as part of the program. Future Africa, the VC firm led by Aboyeji which has funded ~100 startups since inception, may or may not invest, the entrepreneur suggests.
“We’ll help you and if we like you enough, we’ll fund you alongside 75 co-investors we’ve made money with over the last decade,” he shares.
Meanwhile, the involvement of Future Africa’s staff in facilitating the program raises concerns about a potential conflict of interest. Despite Aboyeji’s assurances of a walled-off operation, the possibility of commingling ideas and technologies between startups in the accelerator and existing portfolio companies could be a cause for unease.
Launching an accelerator amid economic uncertainties, rising inflation, and a global capital crunch poses challenges. Nevertheless, Aboyeji remains optimistic, citing the success stories of billion-dollar businesses—including tech talent sourcing platform Andela and payments champion Flutterwave which he co-founded—born during downturns and periods of uncertainty.
Current sentiments largely have Accelerate Africa as an interesting response to the changing dynamics of venture capital in Africa. The prospects are promising, with a focus on local expertise, and addressing the unique challenges faced by African startups.
However, the initiative is not without potential challenges, including funding uncertainties and the need to navigate potential conflicts of interest. As the first cohort is set to launch in April, the tech community observes closely in the hopes that Accelerate Africa fulfils its vision of becoming the ‘YC for Africa’ and propelling the continent’s startups to global success.
