Andela becomes the Latest Unicorn in Africa at $1.5 billion Valuation

Andela, an initially African-based software engineering tech-talent startup that connects tech talents to companies, has secured $200 million series E funding led by SoftBank vision Fund 2, the venture capital arm of the Japanese business empire. The round now values the startup at $1.5 billion. 

Andela has now become the latest African-focused startup to change status from an ordinary startup to a unicorn status, Andela valuation now at $1.5 billion. Though it took the tech company 7 years to attain such status, this is a big win for the company and a major win for the African tech ecosystem. African Startups have continuously been raising massive investment from VC outside the continent in large figures. Most of which have been concentrated on Fintech companies like Opay, Chipper Cash, Flutterwave etc.

Speaking on the investment ..

“Andela has always been the high-quality option for those building remote engineering teams. Now that the world has come to embrace remote work, Andela has become the obvious choice for companies because we can find better talent, faster,”

“If you are a talented engineer, Andela opens up a world of possibilities for you, no matter where you are based.”

Andela CEO and co-founder Jeremy Johnson

Also giving more details, Lydia Jett, Founding Partner at SoftBank Investment Advisers and one of the most respected consumer technology investors in the world, will join Andela’s Board of Directors.

The investment

The investment had major participants and few other Investors. A Boston-based hedge fund Whale Rock was a part of the investors who joined existing investors including Spark Capital, Generation Investment Management, The Chan Zuckerberg Initiative and Japanese SoftBank all participated in the round.

This investment added to previous venture funding raised by Andela equals $380 million. The startup also joins Techibytes list of startups who raised funding in 2021

Andela journey to unicorn

From its inception to present, Andela has come a long way to position itself as a trusted and reliable tech talent producing startup in Africa. 

The startup began operation in Nigeria in 2014, initially started as an African-focused software developer training and outsourcing company. The company was out to reduce the disturbing shortage rate of software developers and engineers in Africa. At the time, tech companies in Nigeria and Africa outsource software developers and engineers from the US or European countries as there are not enough professionals in the country. 

Andela started as an institution not made for the feeble minded, hence it was able to gather some of the best minds together and also produce some of the brightest tech talent in Africa due to its outstanding training program. The institution selected and trained engineers in an intense six-month boot camp and then placed them at global companies in junior developer roles. This move shapes and redefines tech careers in the country. 

Two years after launch, the socio-economic impact of the company spreads across Africa and beyond. It’s attracted over 130,000 applicants in four African countries — Nigeria, Kenya, Uganda, and Rwanda.

The tech company got the attention of global investors including Serena Williams and Facebook CEO Mark Zuckerberg and his wife Priscilla Chan who invested $24 million in the startup and also visited the startup in Lagos, Nigeria.

In 2019, Andela announced that it had parted ways with over 1500 junior developers, shifting it’s attention to its more experienced developers. 

The company said it wants to maintain more long-term engagements with international companies. Hence the need to switch its attention to more experienced developers.

In 2020, due to the challenges caused by the pandemic, the tech company switched its operations to fully remote, becoming a fully remote company and closing down its campuses in Nigeria, Kenya, Rwanda and Uganda. In addition to this, Andela decided to focus on developer placement in international companies and also stopped training developers directly. The company instead created the Andela Learning Community which is an online learning programme that has trained more than 100,000 developers.

Andela’s impact has helped hundreds of thousands of young minds and according to a report, the number of tech job employment has increased by 391,000 in December 2020. Andela claims it has over 200 international clients, with more than 2500 vetted experts. Majority of its developers are in Africa, Nigeria to be precise and the rest spread across Europe and Latin America. Most of Andela’s pool of engineers have been placed with leading technology companies including Github, Cloudflare and ViacomCBS.

Today, the tech company boasts of a network of engineers from more than 80 countries and six continents. 

What’s next for Andela

With the latest funding, Andela said it will invest in “developing products to simplify global hiring and make engineers’ lives easier.” 

The company will also expand its talent pool beyond software developers to include experts in data, product design, and user experience, among other design skills.

Speaking again on the investment, Lydia Jett said

“Hiring remote technical talent is one of the top challenges that companies face today. We believe Andela will become the preferred talent partner for the world’s best companies as remote and hybrid work arrangements become the norm,” 

What you should know

Andela funding is SoftBank’s third publicly disclosed investment in a Nigeria-founded company. In April, the Japanese firm backed Shyft Power Solutions, a clean energy company. And in August, it led the $400 million series C round in Fintech startup OPay, valuing the startup at $2 billion.

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