These French startups who dream of becoming leaders in Africa

Posted on December 1, 2022 at 7:51 am

Heetch pursues his African dream. French start-up VTC launched its service in Mali this week. A country where young French Tech offspring trying their luck are rare. “We are present in 11 markets around the world, including 8 in Africa”, recalls Teddy Pellerin, founder of Young Shoot.

The adventure began in North Africa, with launches in Morocco, Algeria and Tunisia. Then the company went on the attack in French-speaking African countries (Senegal, Côte d’Ivoire, Democratic Republic of Congo, Mali) and Portuguese-speaking countries (Angola).

Africa, a strategic retreat

Heetch has had a troubled history in Europe. In 2017, this start-up that allowed private passengers to be transported was condemned in court. As a result, it had to build on a classic VTC model and faced stiff competition from Uber, Bolt and Free Now.

A battle that has been fighting with limited means, since its last round of funding of 34 million euros dates back to 2019. A drop of water compared to the XXL funding of its rivals, and which led it to accelerate in Africa.

“We look at all regions of the world. The only one where we felt there was room was Africa. French-speaking Africa in particular, because in English-speaking Africa, Uber and Bolt already existed”, explains Teddy Pellerin. “I have technology [développée en Europe, NDLR] that I can use in other markets and where I can have higher growth rates. 🇧🇷

VelyVelo bets on Morocco

VelyVelo, a tricolor specialist in cycling, has also just crossed the Mediterranean and started its activity in Casablanca (Morocco). “At first, our investors thought we wanted to take advantage of it because we are of Moroccan origin,” smiles Asmaa Chakir Alaoui, co-founder of the start-up.

It is, however, the business opportunity that guided the boss. “Last mile logistics is growing in Morocco. There is an ever-increasing middle class for whom delivery is becoming a consumption habit,” he points out.

The African market is also opening the appetite of fintechs. Bizao, born within Orange in Africa, raised 8 million to implement its payment platform in this continent. Neobanks FairMoney and Paysika also have ambitions there. Sign of the current tremor: Medef International has created an index (Up40) of the most active French start-ups in Africa.

Young people who want to become heavyweights in Africa tend to favor French-speaking countries. “Having the same language is an advantage. This allows you to better understand the market, discuss with business partners and authorities”, observes Teddy Pellerin.

modest income

This continent has the advantage of allowing development at a lower cost. But the income generated locally is also much lower. “We do trips for three euros, on which we receive a commission of 15%, which allows us to earn 45 cents per trip”, explains Teddy Pellerin. It is “six times more” in Europe, he says.

To save time, Heetch entered into joint ventures with local partners. The startup of VTC is, each time, majority in the capital. For its part, VelyVelo changed its name in Morocco (Picaleev) to better integrate into the local landscape.

The presence in the capital of African investors or funds that know the continent well often facilitates this. French nuggets can also count on Bpifrance, which has opened offices in Morocco, Kenya, Côte d’Ivoire and Senegal to support entrepreneurs.

However, obstacles in Africa remain numerous. The informal economy is strong there and political instability is an ongoing threat in some countries.

francophone africa ago

“French-speaking countries are still lagging behind in development. Most of the opportunities are in the big four [Afrique du Sud, Nigeria, Kenya, Egypte, NDLR] “Said Ben Marrel, a partner at the Breega investment fund, which recently carried out several operations in Africa.

Despite the challenges ahead, Teddy Pellerin remains optimistic. “We can seek profitability in all the countries where we are present”, the boss is convinced. Heetch is giving itself three years to generate more revenue in Africa than in Europe and is targeting launches in Burkina Faso, Mauritania and Togo by 2024.

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