African Deep Tech: A Blueprint for Federated Growth
A session led by Bunmi Akinyemiju
The narrative of African growth is shifting. It’s moving away from isolated ventures to interconnected ecosystems and away from the high-risk gamble of “unicorns” towards sustainable, capital-efficient businesses. Our recent knowledge session led by Bunmi Akinyemiju and focused on Investment and Ecosystem Building in Africa , unveiled a powerful blueprint for this transformation, rooted in deep tech as a strategy for modular industrialization.
The Urgent Need for Federation, Not Fragmentation
Africa’s growth potential is immense, yet it’s often hindered by fragmented markets across 54 countries, each with different laws and infrastructure. The key to unlocking this potential is moving from competition in silos to federation and orchestration across countries, sectors, and stakeholders.
As Bunmi Akinyemiju—a serial entrepreneur who successfully built 10 companies over 15 years spanning sectors from education to energy —stressed, we must orchestrate collaboration across capital, countries, corporates, and the diaspora to create a federated, modular industrial system. This strategic coordination, learning from models like China and India’s diaspora engagement , is what he calls the pathway to Africa’s federated growth.
Deep Tech as Modular Industrialization
Deep tech is presented as a practical solution to Africa’s industrialization gap, framed as the continent’s “second independence”. This strategy champions vertical integration and engineering sovereignty through distributed, digitally orchestrated facilities instead of traditional mega-projects.
Modular Factories: Instead of large-scale factories that can take 10 years to build , the focus is on modular factories costing about $1 million each. These smaller units are accessible for diaspora investors to fund and can process raw materials like gold and cocoa locally.
Embedded Fintech: Crucially, embedding fintech into these machines is vital for financeability and governance, enabling traceability and capital return.
Real-World Application: This model supports micro-industries across villages, creating jobs and enabling exports. Examples include portable, relocatable edge data centers instead of large, centralized facilities.
The CAMEL Model: A New Investment Philosophy
The current VC model in Africa was critiqued as broken , likened to building an engine without an exhaust due to a lack of exits and poor liquidity, despite significant investment. To address this, Bunmi introduced the CAMEL model as an alternative investment philosophy:
C - Capital-efficient: Prioritizing predictable profitability
A - Accountable: Emphasizing governance and transparency
M - Modular: Building distributed, scalable systems
E - Enduring: Aiming for sustainable, generational wealth creation
L- Lean: Operating efficiently and profitably
This approach provides an 80-90% chance to build successful, profitable companies , aiming for businesses generating around $3 million revenue with 50% profitability in about 18 months. Strategic partnerships with sovereign and corporate partners like MOFI, Bank of Industry, Safaricom, and STI Uganda are essential to diversify investment and overcome fragmentation.
Governance, Corporates, and Policy
Capital alignment is essential for ecosystem federation. This requires a coordinated effort:
Governments should “get out of the way and focus on de-risking” innovation rather than overregulating.
Corporate Partners must accelerate distribution, engage in M&A to create liquidity, and provide the much-needed “exhaust” for the VC asset class. However, many African corporates tend to maintain the status quo and resist innovation. This calls for policy interventions to realign incentives, referencing models from Japan, South Korea, and Taiwan.
New Capital Markets are necessary. Existing stock exchanges lack liquidity , underscoring the need for new, SME-focused capital markets that cater to smaller companies, not just large ones.
Addressing the Talent and Infrastructure Bottleneck
The lack of skilled talent and hardware infrastructure is a critical bottleneck. The solution is a concerted push for physical infrastructure and education reform:
Hardware Labs: There is an urgent need to build many more open access hardware labs across Africa , acting as venture studios to support innovators from idea to prototype. China had over 350,000 hardware labs prior to its industrialization, providing a clear precedent. Funding should be channeled into these labs as shared infrastructure to reduce costs.
Education Reform: Initiatives like Forum Reform, which networks 170 universities , and Timbuktu’s innovation pods in 23 countries , are promising models for nurturing talent. The diaspora is crucial for integrating professors and researchers into African institutions.
Ultimately, the future of African deep tech lies in transforming 54 micro-ecosystems into a federated network. By focusing on collective intelligence, open source sharing, and leveraging the unique strengths of countries like Nigeria, Uganda, Kenya, and Rwanda, we can move beyond competition to lift all boats and build the enduring, innovative industrial system that Africa deserves. The diaspora is the critical bridge to fuel this federation, capital, and knowledge transfer.
Led by bunmi akinyemiju