The mission was a noble one. It came at a time when there was a real need to show that Nigerian/African born software developers can be world class if trained in a structured environment. It was about empowerment and a zero to hero concept that was too good to be ignored. I remember Iyin pivoting Fora, his Edtech startup to join forces with others to bring this wonderful baby into the world, starting from Nigeria.
The business model was straightforward. Recruit raw talents by making them go through a series of assessments. Once successful, train them whilst paying them an allowance. After the training, they work for Andela clients, mostly remotely and earn decent salaries whilst on a bond. When the bond period is over, the experienced engineer can decide to stay or leave. A buy-out clause also exists for those who don’t want to wait for the bond period to expire.
The positives are immense. And because this was not only a social impact startup but one that also has a clear revenue model; Andela was able to attract both traditional investment as well as social impact investment communities. When Andela raised 24M USD in 2016, it was led by a non-profit – Chan Zuckerberg Initiative and supported by others including Google Ventures. That was the kind of pull that the authenticity and duplicity of Andela’s mission attracts.
In 2017, the company did a Series C, raising 40M USD to enable it expand its operations. By this time, it was operating in Nigeria, Kenya and Uganda. My concerns started with the 40M USD raise but I became more concerned with its series D 100M USD raise, which took its total raise to 180M USD. Why was I aghast? It is simple. 180M USD from majority traditional investment circles means aggressive growth that is not as patient as one would love.
At this time, I knew it was going to be tough to keep that original vision of developing new software development talents. And then they started recruiting senior developers from other companies and that should be the flag that says, the new dawn was coming.
The announcement today is thus a climax. Andela has seen that the quick money is in providing experienced developers to western clients and not in training raw talents. And so, this is a purely business decision. 400 junior developers in Nigeria, Kenya and Uganda will have to find new jobs. Rwanda gained and will be the hub of the senior development resources. Congrats to Rwanda, your investment in building a great business environment and infrastructure is paying off.
I believe that Andela has shown us possibilities. We now know more than ever that Africans can do this software development job very well. We know that if our universities are serious, they can revamp the computer science curriculums to meet the needs of industries straight out of school. We also have seen initiatives like Hotels.ng internship and their new spin off start.ng raising a new set of development talents. Andela also does the Andela Learning Community initiatives with Google and others. And we have seen great Engineers that passed through Andela now building awesome businesses.
Just a few things that the founders of Andela should introspect on. 1. Your name was a play on Mandela. You came to the market with a dual mandate. You are telling the world now that this is a full capitalistic play and that your foundational mission has shifted. Whilst that itself isn’t bad, it is good that you don’t try to play it otherwise.
2. You could have spun a division that pushes junior developers to be hired full time in local companies just like Lambda has now started doing in Nigeria with some Nigerian startups. These junior developers will become senior developers in a few years and become your advocates, even get recruited by you later since you will need a big pipeline. Your issue is that you can’t keep them for remote jobs due to the economics, but there is still a chance for a different local model that feeds your new business model later.
3. Your real intellectual property that made you hot has now disappeared. You are just a normal company that takes already great engineers to work for foreign companies. Many have done that and it is not as novel as what you have done before.
I wish you the best. And much more, I know that the junior developers should not despair, great things are in the works for them already. And I must say thank you to Andela for showing us what is possible. I have a feeling that you’d make an about turn in a few years or get disrupted. I am usually right.