Why the Andela model failed in Africa and what went wrong

5 Mins read

Since its inception in 2014, Andela’s goal and model was clear; admitting and training developers on a four-year contract through a highly selective process and then generating revenue when it pairs developers with global companies in need of their services.

The software skills training firm saw an opportunity in the form of increased demand for engineering talent across the world and decided they wanted to take their shot at it. Andela believed that the continent had the potential to redeem herself from the problem of unemployment by simply skilling young people and linking them with employment. 

Although Andela was not the first company to go down the road of developing software talent in Africa, it gave the industry an unprecedented face, gave African software developers hope, employed thousands, inspired many to consider becoming software developers and ultimately painted a picture so perfect for the future of the industry in Africa. 

Andela rightfully entrenched its philosophy in Africa and was poised to be at the helm of training the best software developers. The firm didn’t seem to find a challenge in raising funds as it attracted the top guns such as the Chan Zuckerberg Initiative, GV, Spark Capital, and CRE Venture Capital all believed that the firm’s mission to build the next hotbed of technological talent in Africa was revolutionary and heavily funded it. 

Andela Founders(L-R): Brice Nkengsa, Iyinoluwa Aboyeji, Ian Carnevale, Christina Sass, Jeremy Johnson (CEO), Nadayar Enegesi

While making its entry into Africa, the American company chose Nigeria as its entry point being the country with the largest population in Africa and a 55 per cent youth unemployment rate with of course having a Nigerian Co-founder. 

Andela’s vision would later be expanded to the other corners of the continent by rapidly expanding and setting up operational campuses in Kenya, Ghana, Uganda, Egypt and Rwanda. 

“Nigeria served as an excellent place to begin our work of training Africa’s best and brightest to become world-class software developers.”  

Andela CEO, Jeremy Johnson once revealed.

At an instant, Andela’s model of training and outsourcing developers to global companies made them a house-hold name, a destination many developers wanted to go to and a revolutionary champion for grooming engineering talent across Africa.

However, while everything was seemingly going on well on paper, the Andela empire started to crumble right in our faces. At the helm of its success, Andela started having issues that forced it to lay-off hundreds of developers, switch up its initial business model, and make drastic changes five years after its inception.

Here, we try and understand what could have gone wrong?

Departure of top Management 

After a period of two years, Andela lost one of its crucial co-founding members, Iyinoluwa ‘E’ Aboyeji who left the company to go focus on building digital payment infrastructure, Flutterwave, a move that could have crippled the company. 

Iyinoluwa ‘E’ Aboyeji’s departure was just eight weeks after Andela raised $24 million in a funding round led by Mark Zuckerberg’s foundation.  Mr Aboyeji didn’t delve into the reasons for his departure from the company but reports cited the co-founder’s need to focus on building a payment solution that “Africa dearly needed”. 

Andela’s CEO Jeremy Johnson once confessed how pivotal Aboyeji was to the firm and was quoted as saying; “One of our co-founders Iyinoluwa “E” Aboyeji, is a Nigerian serial entrepreneur, and he helped us get off the ground quickly”. 

Coming from a failed start-up, Fora, Aboyeji had the forte and dream to train world-class developers in months and hoped one day that this dream would come true. He would later go on to bringing what later came to be known as Andela to life with the help of his friend Jeremy and other co-founders making its story remarkable

Twerking up things 

When Andela started operations, their model of training software developers and placing them with clients was an amazing venture that saw them train more than 100,000 people through programs like the Andela Learning Community. At its core, Andelans thrived and were successfully placed with opportunities until this move hit rock bottom. 

Andela would later shake up things after initial decisions proved costly for the firm. This saw the massive laying off junior developers and ending its developer training programs in Nigeria, Kenya, and Uganda—three of its four African campuses. At the time, in September 2019, Andela let go of over 250 of its contracted junior developers in Lagos and Uganda, and later 170 trainees in Kenya were also impacted.

In an explanation, Andela said that training junior developers involves more time and thus costs more money, especially if the developers go for a long time without being placed. To make matters worse, some trained Andela developers had not been placed at all for the past year and yet they were still paid by Andela.

At this point, the firm was extensively burning cash and not making a profit from its trained developers. 

Seni Sulyman, Andela’s vice president for global operations told Quartz in 2019 that with more junior developers now more widely available in the US unlike when it launched, Andela’s value proposition of supplying talent was directly impacted and means the company can no longer place as many junior engineers as required hence the lay-off. 

Andela’s strategy then shifted to focus more on hiring and then outsourcing senior engineers from its African markets and the firm had planned to hire an additional 700 experienced engineers by the end of 2020 something that is likely not going to happen. 

Plan B 

As the pandemic ravaged throughout the world, shaking up systems and destroying initial plans, companies were forced to take drastic measures.  The software industry too among others got punched in the face by the effects of the pandemic. 

Because of an interconnected market, the software development industry and IT in general felt the tremors from Covid-19 outbreak and Andela too was among those badly hit by the emergence of the pandemic. 

Andela’s CEO, Jeremy Johnson, revealed that the recent layoffs were a necessary measure aimed at safeguarding the future of the tech company. He cited the weight of the economic downturn on Andela’s customers as a sign that there will be attrition from the startup’s customer base and lower than expected growth. Hence, the need for the trim.

Andela’s woes didn’t start with the coming of COVID-19 but simply intensified. On top of massively laying off, they(Andela) had to come up with a plan to avoid such scenarios in the future. 

Subsequently, on 8th May 2020, Andela’s CEO, Jeremy Johnson announced that Andela was going fully remote in a bid to help usher in a world where the most talented people can work from anywhere and build careers commensurate with their impact. 

Additionally, Mr. Jeremy announced that Andela would expand its network to include top engineers from across the continent, and eventually around the world — and the company won’t require engineers to be full-time employees to apply for opportunities.

End of the road?

The news of Andela going fully remote has been followed by reports that the company is closing its offices in Africa and selling off property to former and current employees and asset disposal companies. The company is going full remote and will only have a sales office potentially in Nigeria where the Andela story started.

Forbes listed Andela as one of the next Unicorn startups in the world but everything seems to be crumbling right before our faces.

Could this be the beginning of the end of a start-up so promising? Only time will tell and one thing for sure, the darling start-up that announced itself to the world, gave software development a ray of hope, attracted the finest of Silicon Valley, and almost made the unthinkable possible will forever be a sensation. 

As Afritechpost, we’ll be keeping tabs on the future of Andela and its new model to keep you in the know of what they are doing in the ever-changing technology landscape of Africa.

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