Estonians look to the web when they need to shop, learn, speak to the government, apply for a loan or… anything else really. It’s inefficient to show up in person and wait in line! Why if you don’t have to?
For local startups Estonia has been the perfect testing ground with its tech-savvy, demanding users and relaxed regulations. Lately, it seems, the local entrepreneurs are widening their scope.
At first an Estonian finance expert and CFO at Planet42 Marten Orgna just wanted to have an adventure. For a guy from a Northern European country, Africa sounded like an exotic enough place to start with.
He signed up for a new job in Mozambique. In a global investment firm Orgna reviewed hundreds of business opportunities and noticed that most Africans are held back by the lack of mobility. They simply couldn’t afford a car.
When the public transportation is poor, a private vehicle could be the only way to reach schools, hospitals, shops, offices. Big African banks would serve the wealthier top and leave most people without a car loan. Hence, only about 14 percent of rural South African families own a car, even though South Africa with its 60 million people has the largest vehicle market in the region.
Orgna convinced his friend, a vehicle finance specialist Eerik Oja to move to South Africa with him and solve the problem together.
Their company Planet42 buys cars and rents them out to anyone interested. It takes about a minute and three clicks to apply for the car online. It may be natural for Estonians, but unheard of for South African users, who are used to filling out paperwork for 40 minutes at a bank desk.
“South Africans are very open to foreign startups,” said Orgna, who expected his emails to end up in trash folders in the beginning.
Three years later and with over 4000 cars delivered, the South-Africa registered company has raised 13 million euros of combined debt and equity from Estonian investors and is expanding to Mexico.
If you have a global product, then just pack your bags and get on with it!” Orgna encourages entrepreneurs to think bigger. “No need to imprison yourself within your own mind.”
The founders encourage their staff (mainly locals) to decide for themselves and take responsibility. “Raise your hand, if you have a good idea!” they tell their employees, who find Planet42’s work culture new and refreshing, as brought out in the company’s feedback forms.
Planet42 hires locals, but all the IT solutions come from Estonia. “This keeps us one step ahead of potential local competitors!” Orgna revealed their little secret.
Doing the hard work of localisation
The first one to show up and pave the path for Estonian companies was a ride-hailing platform Bolt.
Only five years ago Bolt opened their office in South Africa, today they are present in six countries and are the market leader in the region, both geographically and in terms of volume. The service was clearly needed from the point of view of both customers and drivers, said Jevgeni Beloussov, Vice President of Rides at Bolt. The company doesn’t only make taxi rides more accessible, but also gives work to locals.
“We can see that foreign companies have not done the hard work of localization so far – we have been pioneers in this regard,” Beloussov said. In Africa, Bolt introduced motorcycles , which are the preferred means of transport among Africans, and have developed payment methods that suit the specifics of the local market.
“When hiring people, we follow the same values all over the world – motivation, being super sharp and the will to do great deeds,” continued Beloussov, who believed the employees pass on the culture and infect those around them.
The future sounds promising: the population of Africa is expected to double in the next 30 years, which means around 1.3 billion more people will be born.
Estonian ideas don’t only take over the streets of Africa. They are also spreading into the hospitals and schools.
In 2019, BBC dubbed Estonia as Europe’s newest education powerhouse after the global education PISA test results were out.
An Estonian education expert and CEO at eKool, Tanel Keres believes part of the success lies in the fact that Estonian parents closely follow their childrens’ progress and work with schools. His company eKool aims to simplify this even more, and spread it across Africa’s continent.
The online platform he is managing brings together teachers, students and parents. Everyone can follow pupils’ progress and communicate with each other. With over 100,000 users in Estonia, eKool has launched test platforms in Kenya and Ghana. “Estonian digital country’s image continues to exist, even if we here think it has stalled,” Keres told Invest Estonia. “We are still way ahead!”
Estonians had to learn their lessons the hard way, he believes, when building the country from scratch after regaining independence. Estonia is “focused on building a country where each generation should grow digitally,” as Estonia’s president Kersti Kaljulaid pointed out in a recent event in Kenya.
Now Estonians can help others to skip many of the unnecessary steps. “African nations could jump to where we are within just a few years,” Keres believes.
Technology can be the lifeline
The digital jump is not just happening in classrooms, but also in hospital beds. Medical institutions typically struggle with the lack of staff, especially during COVID-19 pandemic when the nurses burn out quickly.
The CEO and founder of Cognuse Andres Mellik believes that when all other resources have been exhausted, technology can be the lifeline. “Estonians are used to seeing everything through the digital lens. It’s natural for us,” he said.
Rather than depending on the limited number of experts to perform certain tasks, Cognuse’s core product CoNurse helps hospitals to optimize their workforce and support them at every step of the way. His US and Estonia based company Cognuse created CoNurse which enables voice-guided step-by-step instructions for critical and rare hospital procedures that until now mostly existed between old dusty folders or complex pdf files. Instructions include, for example, how many times should the ID’s of patientsbe checked for safe blood transfusions, how and when to disinfect hands, which medicine to administer, how to care for post-stroke patients. It also helps families play a more active role in caring for the patient.
“We take away all the unnecessary and make the procedures so easy that nurses can safely and easily follow them,” Mellik said.
Cognuse already operates in seven clinics in Ghana and in the largest hospital in Kenya, a project supported by the Estonian Ministry of Foreign Affairs via it’s development cooperation and humanitarian aid programme. As the company was expanding to Africa during the pandemic, flying was often out of the question. Therefore, they mostly worked online.
Mellik, who used to fly a hundred times a year when introducing his solution to American clinics, was surprised by how seamless the expansion to Africa has been.
Digital sustainable fashion community
Just like a former environmental consultant, Aune Aunapuu is running her South African company Yaga from Estonia. “I decided to fly over when an actual need for it emerged. This never happened,” said Aunapuu, who has been to South-Africa, but not on a business trip.
Yaga, a buy and sell app for sustainable fashion, now has two local employees, who also work from their homes. The platform, the largest of its type in South Africa, has more than 200,000 users and is growing 20 percent per month. Instead of relying on in-office employees, Yaga closely works with local influencers, who open their own Yaga shops and post about it on social media.
Opening the company in South Africa was the easy part, Aunapuu said. Winning over the trust proved to be the real test. South Africans are not as eager to buy online as Estonians. Is it safe enough? Will I receive what I ordered? These were the concerns Yaga’s users had.
Those who were assured about the reliability, started forming tight communities, supporting each other, and endorsing each other’s Yaga shops. Many started selling second hand clothes, mobile phones or even furniture to get by after losing their incomes due to the pandemic. “The sense of community is very strong there,” Aunapuu noticed with surprise.
Just like the other Estonian entrepreneurs, who have launched in Africa, Aunapuu encourages others to jump in the deep: “Just go and you’ll learn by doing!”
Africa is an exciting place where new ideas can come to life. It doesn’t only take a brave entrepreneur, but also customers, who embrace change. Africa seems to have plenty of both.
Estonia’s success in Africa proves that digitalization shouldn’t always be a state-runned campaign to innovate and improve our everyday life. Changes may happen step by step runned by companies. And in the digital sphere, Estonian companies have a lot of experiences to share.
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