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In this new edition of HUSTLE & FLOW, we'll dig into two high-growth, big-potential African creative sectors: Gaming and Beauty. These markets are ripe for the taking, if you know where and how to look (read on for some tips).
Meanwhile, African animation continues to shine, with the back-to-back releases on 'Supa Team 4' on Netflix and 'Garbage Boy and Trash Can' on Cartoon Network, and African traditional combat sports such as Nigeria's Dambe are finally starting to attract the attention they deserve from key industry players.
And finally, are Africa's creative entrepreneurs ready to reconsider their aversion for bank loans as a source of finance? Birimian and Orange Bank may have found a way to make it work in Ivory Coast.
Scroll down for more!
GAMING
🎮 🤑 Sub-Saharan Africa’s gaming industry is expected to generate over $1 billion for the first time in 2024.
That's according to new research compiled by Newzoo for leading African gaming startup Carry1st.
🚀 Despite the current slowdown in the world's economy and in the global gaming market (partially due to a post-Covid correction), games sold in Africa generated $862.8 million in revenue in 2022, up 8.7% compared to the previous year.
According to Jackson Vaughan from VC firm Konvoy, “these initial numbers for gaming on the continent are promising, but the longer-term trends of population growth, internet penetration, and smartphone adoption paint a picture of incredible growth for gaming on the continent.”
Now, this is exciting, but these juicy numbers don't tell the whole story.
💸 Right now, 99.9% (my own guesstimate) of these hundreds of millions spent by Africans on video games are not going into African companies' or developers' pockets. Instead, they flow back into the balance sheets of global giants like Electronic Arts (FIFA, Sims), Riot Games (League of Legends), Ubisoft (Assassin's Creed), Gameloft (Disney games) or Zynga (Words with Friends, Farmville).
🤔 So how can Africa benefit from its young population's appetite for gaming?
✅ Partner with the big game publishers to adapt, distribute, and monetize their top sellers across the continent, then plough back the cash into growing the local ecosystem -- that's the Carry1st playbook.
✅ Invest seriously into video games development training programs. They don't need to be free. Connect graduates with remote game development or game design jobs to start.
✅ Game design is a hit-driven business. Gaming studios have to survive many failures on their way to success. African video games creators can increase their chances of commercial profitability by 1) focusing on casual and social mobile games, where they have an edge in terms of user experience and 2) targeting the global - not local - market from the get-go.
✅ Develop play-to-earn games to service brands, companies (such as FMCGs) or institutions (governments, NGOs) looking for hard-to-access, on-the-ground data across Africa.
✅ On the e-sports side, get global gaming companies to invest in local servers, like Electronic Arts just did in Nigeria, to reduce the latency and enable African gamers to compete in global tournaments. This will unlock new revenue streams around the organization of local gaming events, such as ticket sales, vendor services, sponsorships, and merchandising.
❓ Finally: African telcos potentially have a huge role to play, and massive upside to make, from investing in the local gaming industry. Where are they?
ANIMATION
🤩 South African studio Triggerfish has made African animation history for the second time in two months.
Just a few weeks after the release of its ground-breaking scifi anthology series 'Kizazi Moto' on Disney+ comes 'Supa Team 4', the first ever African orignal animation series to hit Netflix.
🦸Created by Zambian writer Malenga Mulendema and aimed at kids ages 6 to 11, 'Supa Team 4' follows four undercover teen superheroes on a quest to save the world after being recruited by an ex-spy, while juggling the many challenges of attending secondary school in a futuristic Lusaka, Zambia.
👩🏿 The first animated series to emerge from Zambia, the 8-part 'Supa Team 4' was written by eight African women screenwriters and voiced by five African women actors - a remarkable feat in itself. The theme song was composed by Zambian rapper/singer Sampa the Great.
The making of this show - which took 8 years - is also an example of persistence on the part of Mulendema, Triggerfish, and everyone involved. Mulendema originally pitched the concept for 'Supa Team 4' during Triggerfish's Story Lab organized with Disney in 2015. In 2017, Triggerfish and UK-based producer and distributer CAKE began developing the series under the working title 'Mama K’s Team 4'. Two years later, Netflix acquired the series and took it to the finish line.
The emerging Zambian animation community is feeling energized by the 'Supa Team 4' spotlight, writes Semafor, so we hope to see more stories coming from the Southern African nation in the years to come.
🗑️ Meanwhile, in (another!) African animation first, Cartoon Network also released the long-awaited series 'Garbage Boy and Trash Can' by Nigerian creator and director Ridwan Moshood.
Just like the teen girls of 'Supa Team 4', Garbage Boy is a super hero, except that, in this case, he does not actually have any super powers.
🍋 “The inspiration for creating the lead characters came from the derogatory name bullies used to call me in school,” explained Moshood, who said he created the characters to help children experiencing the same mistreatment. Talk about making lemonade with the proverbial lemons.
The 10-episode series was commissioned by Cartoon Network after Moshood won the Cartoon Network Creative Lab initiative 4 and a half years ago -- a sprint compared to 'Supa Team 4's marathon. It was co-produced in collaboration with Pure Garbage, a South African company which was founded specifically for this project, and Nigerian animation studio Magic Carpet.
BEAUTY
💄 The African beauty market has the potential to become one of the most lucrative in the world.
🚀 According to Statista, the African beauty industry currently grows by 8-10% per year against a global market growth rate of 4%. It is projected to be worth $77.81 billion by 2028.
💸 Black women spend a lot more on hair care than white or Asian women. In fact, in the US Black women spend 4 times more on their hair than white women -- and that amount represents more than 25% of their monthly budget!
Although there's been much progress in the Black beauty market in the past few years, in a large part thanks to the spotlight (and FOMO) effect created by the launch in 2017 of Rihanna's Fenty line, there is still a lot of space for growth.
Here are some of the opportunities I see in the beauty space:
✅ Modern, branded chains of beauty salons that leverage tech to make the (very long) experience of getting one's hair done smoother, more enjoyable, and more affordable for both women and men.
✅ Tech and scientific innovation around natural or synthetic hair for weaves or extensions, focused on avoiding damage to the skin or scalp.
✅ Innovation around some of Africa's natural, indigenous ingredients such as shea butter and baobab, moringa, marula and argan oils and their transformation into cosmetics. There is no reason why Africa couldn't become a center for organic, sustainable cosmetics development for the world.
⚠️ For all of the above, a strong focus on branding, marketing, and distribution will be key to success. Too many young brands are thinking too small and not projecting enough cool to break through in the beauty space.
Who will be the entrepreneur who will convince Lupita to launch her own, Africa-sourced brand?
SPORTS BUSINESS
💪🏾 The African Warriors Fighting Championship (AWFC), a leading promoter of traditional African martial arts, has signed a landmark sponsorship deal with crypto betting company Stake.
🇳🇬 AWFC has been working to modernize and standardize Nigeria's traditional combat sport Dambe, which is very popular in the north of the country, and to introduce it to international audiences.
Its new agreement with Stake is a significant step towards reaching that goal.
🔥 A major online gambling company and a big sports sponsor, Stake already supports the Ultimate Fighting Championship (UFC), one of the biggest Mixed Martial Arts (MMA) leagues in the world, as well as Nigerian middleweight world champion Israel Adesagna.
The deal - the first in Africa for Stake - will see the crypto company branding appear on African Warriors uniforms, events and digital content. It is also likely to generate a lot of visibility for Dambe internationally.
I first became aware of the world of African traditional combat sports in 2007, during my past life as a journalist. Stuck in Khartoum waiting for an elusive visa to Darfour, I decided to go film a story about traditional Nubian wrestling (which I had read about in my Lonely Planet guide!) rather than sit in my hotel room.
The circular sand pitch, the charisma of the fighters, the passion of the audience -- It felt like stepping into the movie 'Gladiator'.
Indigenous African martial art forms exist all across the Sahel. Senegalese wrestling is probably the best-known one - it's more popular locally than football. Meanwhile, Maxwell Kalu, founder of AWFC, describes Nigeria's Dambe as “ancient, intense and steeped in tradition”. AWFC's Instagram account already counts more than 212,000 followers, many from Brazil, Canada, and the US.
🥊 However, Dambe or Senegalese wrestling are not currently recognized by the MMA ecosystem, which combines fighting techniques from various combat sports such as Brazil's jiu-jitsu, Muay Thai, kickboxing, Japan's karate, or Korea's taekwondo.
But the concept of MMA is quite new. It was first introduced in the United States in the 1990s by... the UFC. It was then regulated and standardized in the 2000s.
🚀 So, in 2023, as world-famous sports enthusiast Shakira once said, "tsamina mina, eh, eh, waka waka, eh, eh, tsamina mina zangalewa, this time for Africa."
FINANCING THE CREATIVE SECTOR
🤔 Can debt be an appropriate tool to finance the Creative Industries in Africa?
This debate has been going on for years.
💰 Most investors currently active in the Creative space are Development Finance Institutions (DFIs) -- essentially very large, multinational banks. They have many financial tools at their disposal, but debt is the less risky one as the lender's expected return is directly baked into the price of the loan (the interest rate).
😱 On the other side are creative entrepreneurs who, for the most part, are small business owners extremely vulnerable to the vagaries of their home market -- currency devaluations and forex risk, political instability, unpredictable taxation, rising interest rates, and value chain disturbances. They don't want to be burdened by a loan when the path ahead is so unclear.
When I was running my first business, a company in Kenya called Buni Media, my year was consumed by finding work and raising money to sustain our 80-person team. And every year, it almost felt like starting from scratch. That was pressure enough -- I would have never taken a loan I wasn't sure how to repay.
💡 But a recent partnership between Orange Bank and Birimian Ventures is showing that debt facilities geared towards the creative sector can work, if they are thoughtfully designed and managed.
🎉 In September 2022, Orange Bank and Birimian launched a $167,000 pilot debt program targeted at fashion companies in Ivory Coast. As of July 2023, 21 companies had been financed, with a repayment rate of 100%.
🚀 Last week, the two partners announced a new $836,000 fund, which will expand its reach to other sub-sectors of the creative industries. This time, the program is backed by IFC (International Finance Corporation)'s guarantee facility, which means that Orange and Birimian can take more risks.
So what did Orange and Birimian do to generate such positive results?
✅ They focused on one sub-sector in which Birimian had deep expertise.
✅ Birimian used its sector knowledge to pre-select companies and prepare them to apply for a loan. Out of 80 submissions, they selected 21 (26%).
✅ The product was packaged as a short-term loan to assist designers with the production of their next collection, so the loan had a clear and concrete purpose: to purchase raw material, lease equipment and pay for labor costs over a defined period. It would also be immediately repaid from the sales of the products. The short duration of the loan limits the impact of the interest rate on the borrower.
✅ Birimian then continued working with the selected companies throughout the period, providing coaching, access to markets and visibility.
The same model could be applied to finance the creation of other products that have a short route to market: TV series, music album, art exhibition, and more.
FOR THE CULTURE
🍦 And I'll leave you today with a cool Africa Special to dig into on these long days of summer, bought to us by none other than Teen Vogue.
The boundaries-busting youth magazine has published a juicy "Africa New Wave package" of articles that "celebrates the rich culture and impact of the globe's demographically youngest continent. Through a series of visual stories, [Teen Vogue] is unpacking the gravity of Africa's history and influence on the world and why it needs to be looked to as a source of inspiration for radical youth-focused change."
Check out in particular:
📱 "What Young People Are Wearing in Lagos" -- Using an iPhone Pro Max 14, photographer Stephen Tayo (one of my personal favorites) captured the incredible street style of Lagos.
👗 "The Folklore Is Putting African Fashion and Beauty Brands on the Main Stage" -- Founder Amira Rasool talks about her mission to make the work of African designers and creatives available around the world.
🎤 "Amaarae's Sophomore Album Fountain Baby is the Baddie's Manifesto" -- The Ghanaian American singer-songwriter is on her journey to self-discovery through music, fashion, and beauty.