Bringing more of the Internet to more of Africa
Much of Africa has gotten a taste of the internet thanks to cellular technology, but high-speed access remains scarce on the continent thanks to a lack of consumer spending power and a fractured, unreliable power grid. Cassava Technologies, a spinout of an African telecom firm, aims to change that equation.
Why it matters: Africa is home to 54 countries and 1.3 billion people and covers an area larger than India, China and Western Europe combined. That's too big a chunk of the planet to be stuck with spotty, expensive internet access.
"It’s 54 different countries with different languages and different ways of working, different regulatory environments," says Hardy Pemhiwa, Cassava's CEO.
Flashback: In 1993, three quarters of people in Africa had never heard a phone ring. The mobile revolution was a game-changer — bringing not just the first opportunity for regular access to phone calls, but also basic access to the internet for many.
The big picture: Much of the continent now has cellular access. But expanding to high-speed Internet service has been a challenge.
- One key is making the economics work. Across the continent, 85 percent of people earn less than $5.50 per day, per the World Bank, while in sub-Saharan Africa, 40 percent of people take home less than two dollars a day.
- Reliable power is another issue. Utility companies have struggled to provide consistent access to power and where it is available it is costly, Pemhiwa says, adding that in many countries 12 hour blackouts are not uncommon and even in places such as South Africa multi-hour disruptions still occur.
- The result is that less than 40 percent of Africans have steady internet access due to either availability or cost.
Enter Cassava, which last year was spun out of Econet, one of Africa's large cellular providers. The firm has businesses doing everything from laying fiber and building data centers to offering mobile payments and cybersecurity services.
- Cassava is also building Sasai, a "super app" it hopes will play a role in Africa akin to WeChat in China.
- "Our vision is a digitally connected future that leaves no African behind," Pemhiwa said.
Between the lines: The big U.S. tech companies also see the opportunity. "When you are thinking about the next billion users of internet, where are you going to go?" Pemhiwa said. "Africa has to be part of your plan."
But many tech companies have struggled to build significant business in Africa. Cassava aims to offer a way for them to shift from philanthropic endeavors and pilot programs into a real business.
The company has tried to become a bridge, laying fiber cable and building data centers while working with U.S. tech giants to build on top of services from Microsoft, Google, Amazon AWS and Facebook.
"We are the go-to partner of choice," Pemhiwa said.
What's next: While Cassava is privately held, there was a report from Bloomberg last year that the company was in talks with a blank-check acquisition company to go public in a deal valuing it at more than $4 billion. Pemhiwa acknowledges that Cassava's vision will require more investment.
- "That vision requires capital and we are constantly reviewing our options as to sources and instruments we can use to raise capital," he said.