Can a Nigerian ed-tech start-up change the face of education by paying its students to go to school?
When Tolulope Komolafe, a 24-year-old computer science graduate of Ladoke Akintola University of Technology (LAUTECH), saw an unbelievable Twitter ad from Andela, an unknown tech company claiming that it would pay interested “wannabe” programmers to attend she was initially skeptical. Her parents warned her it was a scam, but she decided to give it a try. After passing a grueling aptitude and communication skills test, she was so convinced of the programme’s potential that she turned down an invitation for an interview with the Nigerian National Petroleum Corporation (NNPC), the high-paying, state-owned oil company.
Komolafe is just one of many Andela students who are betting on this young education start-up company, which intends to train 100,000 software engineers over the next 10 years.
Andela, a Lagos and New York-based education start-up has brought a brand new approach to education on the African continent. Instead of charging students for a four-year degree before releasing them to a brutal economic environment characterised by high unemployment, Andela recruits intelligent, local talent through a rigorous testing and interview process and then pays each student approximately $500 each month, with benefits, at the start of a four year fellowship designed to transform even the least tech-inclined person into a world-class software developer or project manager. As they progress through the programme and take on greater responsibility, Andela fellows are eligible for pay raises.
Since launching operations in September 2014 from an office in the emerging tech hub in the Yaba area of Lagos, Andela has recruited 60 individuals from its monthly boot camps into its full-time training programme. Many of the recruits are young men and women like Komolafe – university graduates in their mid-twenties about to enter Nigeria’s dismal job market. Many have not had any experience with coding or the world of technology beyond the use of a mobile phone. Andela’s business model centres on training these students to be proficient in software and web development, before making their talent available (while they are still in training) to companies around the world in need of engineering talent.
In the West, at the other end of Andela’s value chain, a scarcity of developers, along with the pressure to reduce costs, has compelled companies to outsource jobs to cheaper labour markets in places such as China and India. Software development projects that cost $20,000 in the US can easily be completed for $8,000 in emerging markets. In many ways Andela practices a form of talent arbitrage that allows them to use earnings to fully subsidise the cost of an education in a global field with no shortage of available jobs.
“Across the world, brilliance is relatively distributed. Opportunity is not,” said Andela co-founder and CEO, Jeremy Johnson, when we met at Andela’s primary office on the bustling Herbert Macaulay Road in Yaba. The large, open space, with its pods of workstations, was alive with teams of Andela fellows huddled around laptops scrolling through screens of code.
The official statistics bear out Johnson’s claims. Young Nigerians definitely suffer from a lack of opportunity. Despite the recent rebasing that saw Nigeria’s GDP rise to just under a half trillion dollars and a growth rate consistently above five percent over the past several years, about 70 percent of Nigeria’s young people are unemployed. While much of this is the result of a resource-dependent economy that creates relatively few jobs, the Nigerian educational system has also suffered from chronic underfunding which began during the country’s military era, and inadequately trained educators with an overwhelming crush of students. Last year, over 70 percent of the candidates who sat for the 2014 November/December West African Senior School Certificate Examination (WASSCE) failed to make the five credits necessary to pass. In contrast, in the US, where the foundational educational systems are better, Nigerians are one of the most educated ethnic groups.
Johnson has made a living from providing educational opportunities to brilliant minds that lack opportunity. Before he turned 30, he had founded two “ed-tech” companies, one of which reportedly IPOed for $100 million. Johnson’s previous educational ventures, a small college matching service for students at high-schools without the benefit of dedicated college admissions guidance counsellors, and 2U, a tech platform that helps universities develop online degree programmes, have all been US focused. His first trip to Nigeria happened only three months before Andela’s official launch.
The seed for Andela came from one of the company’s other co-founders, Iyin “E” Aboyeji, a 23-year-old Nigerian and law graduate from the University of Waterloo two hours west of Toronto, Canada. E, as he is known by most people, is also a serial entrepreneur with two previous start-ups, Bookneto and Fora.co, an online pan-African platform that distributes tertiary and professional educational material. A bundle of enthusiastic energy to Johnson’s almost psychologist-like calm, E cold emailed Johnson in 2012 at the height of 2U’s aggressive expansion to seek Johnson’s thoughts on an educational start-up based in Lagos. The two jest that E was definitely the suitor whose aggressive pursuit of Johnson’s advice and mentorship eventually lead to an in-person meeting. “Within 10 minutes of meeting him, my response was ‘You know what, you actually are just an awesome human being. You clearly care about your mission and about making an impact through education. And sure I’m busy, but I’m happy to help with whatever I can’,” Johnson said.
What started off as an arbitrary email quickly transformed into a mentor-mentee relationship that soon became a business partnership. Johnson eventually left 2U to join E and his business partner, Ian Carnevale, as CEO of the new venture. He brought with him as a co-founder and COO, Christina Sass, who had worked for former president Bill Clinton on education issues at the Clinton Global Initiative and who knew Johnson through her work as an education advisor to the President and CEO of the MasterCard Foundation. Obie Fernandez, Andela’s CTO, and one of the foremost experts in the programming language, Ruby on Rails, later joined the team. “These were superstars in my eyes,” said E when asked about working with Johnson, Sass and Fernandez. “They still are.”
Andela launched on 1 September 2014, with six students selected from a developer boot camp, in the office building it currently occupies on Herbert Macaulay Road not far from the famed Co-Creation Hub, an incubator at the centre of Nigeria’s tech revolution. Within two months, the start-up had outgrown the space and initiated the search for a larger office. On 19 December 2014, E tweeted a picture of two yellow-painted stretch bungalows: “Looking at this 2 acres property next to us with eyes of faith. #2015 #leggo #specialzone #yaba,” the tweet read, indicating the young company’s potential plans.
Eight minutes’ drive away from the company’s offices on Herbert Macaulay, Andela is completing the final touches on a new, 800-square-metre campus called Amity. The three-storey, cream-painted cube structure, which previously served as a teaching hospital as well as a university administrative block, stands out from the colony of residential buildings clustered around it. From the roof terrace there are breathtaking views of Yaba, stretching all the way to Lagos’ famous Third Mainland Bridge and the financial district in Marina. The 20-plus room Amity campus is designed to give fellows an aspirational feel. When I visited, there were still ongoing renovations around Andela fellows hard at work in air-conditioned rooms full of shared work stations, Apple laptops and executive leather chairs.
The building also has a cafeteria on the ground floor courtyard, which offers fellows free lunches. Amity can accommodate 45 boarders to provide certain fellows with respite from the three hours of commuting that many face on a regular basis. “We want them to eat, think and sleep tech. That’s how we sieve out the lazy ones and those in it only for the money,” E said. He hopes that the close quarters but open vibe of the campus will help students to build connections that will grow the Lagos tech scene. “What we imagine is that people come here, they make friends, they find cool families for whatever they want to do for the next four years. And that the relationships that have a massive impact on the ecosystem for the next four years, five years are built here,” he said enthusiastically.
Olatunde Garuba is a 30-year-old Andela fellow and Federal University of Technology (FUT Minna) graduate who previously earned less than $300 a month as an electronics repairman. In his second year of the Andela fellowship he credits the programme with transforming his professional life. “You can’t survive without the passion,” he said. “Though the contracts stipulates working just 9 to 5, everyone keeps going on and the experience has been great.” Andela fellows are required to report for work at 8 in the morning and stay until the close of the day at 4 pm, but most end up staying after hours to finish work on their various projects.
For E, such behaviour is indicative of the kind of work ethic necessary to build world-class developers and programmers. “One thing that we’ve ingrained in the team here is ‘always find a way to make it possible’. That’s one of our really core values. No matter what, find a way to make it possible regardless of anything. That’s what it takes to build a quality programme,” he says. “If you allow the environment to determine where the programme grows then you start running into quality issues. There is demand for Andela developers because we take all those things very seriously.”
The team focuses obsessively on a series of metrics for evaluation: the number of people they can educate, direct and indirect jobs created, and eventually impact on a country’s economy. One key internal measure of Andela’s effectiveness is whether fellows would recommend the programme to their friends. According to Johnson, this is one of the most accurate measures of impact. Thus far, according to both E and Johnson, 98 percent of Andela students are satisfied with the programme, which includes coursework and training on business writing, entrepreneurship, project management, communication and professional certification. Andela’s objective is not only to produce brilliant software engineers but also to provide successful outcomes for clients who hire its services. “You need to be able to train brilliant people really well. And that’s what E and the team have done really effectively over the past five months – to execute and improve on quality and attention to detail in a way that rarely happens anywhere in the world. That’s the reason why 100 percent of our customers who started working with us are still working with us,” Johnson said.
Adam Frankel, a former speechwriter for US President Barack Obama, is now Vice President of External Affairs at Andela. He explains how fellows work with clients: “Andela is supporting clients ranging from startups to global enterprise organisations. Our process is straightforward: we talk with prospective partners to understand their technology needs. Then we identify Andela developers who are a good match given the technical complexity of the work. From there, clients manage Andela developers as members of their own team.” Andela can staff between one and five fellows to a project depending on the complexity and duration.
According to the Andela founders, the services provided by fellows are routinely cheaper than the market rate. “Hiring an Andela developer on average is about half the cost of hiring someone locally in North America, and you’re getting someone who is on average smarter – higher IQ for problem solving – is also more driven and who, quite frankly, is going to learn at a pace that everyone on your engineering team would be envious of,” Johnson said. “Over all we believe that the quality of the work relative to price is the highest in the world period. We’re not trying to be the lowest cost provider. That’s not our goal. Our goal is extraordinary quality and value.”
The Andela story has attracted a lot of attention, not only from policy makers looking at how this new model might kickstart a moribund educational sector but also from investors who see the start-up as a harbinger of things to come in what has become a multibillion-dollar tech industry subsector. Technological advancements and increasing global demand for high-quality knowledge programmes have created more and more education technology start-ups. The venture capital has followed. According to CB Insights, a venture capital and angel investment database company, ed-tech financing surged 55 percent in 2014. Global Industry Analysts (GIA) reports that in 2015, the global e-learning industry will top $105 billion.
Andela’s business model and geographic positioning means an eclectic but dedicated list of primary investors. Last year it raised a seed round for an undisclosed sum that drew participation from investors such as the African Angel Network, Former America Online CEO Steve Case, Facebook alum and New Republic Owner Chris Hughes, social investment fund the Omidyar Network (ON), and even the basketball star Carmelo Anthony.
AAN, a for-profit impact investment firm focused on African start-ups, has 18 investments totalling $500,000 across eight countries. A member of the 11-man Network, Pule Taukobong, explains that Andela meeting Eugene Hill’s 5Ms criteria (Market, Management, Method, Money and Metrics) was the deciding factor for AAN’s investment. Taukobong believes the startup could receive a valuation of $100 million within 10 years. Omidyar Network, which owns close to 5 percent of Andela, has also made investments in several other education tech startups around the world, including South Africa and Kenya. Amy Klement, ON partner and lead on their education imitative, said: “We invest in [education] all the time so we recognise there is still a lot to be learned. That said, Andela’s early numbers are very positive, but because it’s so early, our biggest fear, which we haven’t proven out, is if there are enough clients to sign contracts with Andela to use their fellows.”
The Andela team members understand the challenges they face as a new player in a sector characterised by its lack of definition and proven business models, but they are not perturbed. “There is virtually zero unemployment in software development as a field. Amazon currently has 16,000 development IT jobs, Accenture currently has 14,000 so the demand is inexhaustible if the quality is there,” Johnson said.
If Andela is to succeed as a business, as well as in its mission to educate 100,000 Africans, it will mean turning the buzz around its novelty structure in what is still considered an unusual geographic location for tech into a sustained and reliable talent source for global firms with large budgets.
For now, the Andela team is focused on building the right kind of organisation alongside recruiting a strong and diverse student body. As part of the effort to identify talent in all corners, Andela has started hosting women-only coding boot camps to try to improve the gender representation of its fellows. Approximately 30 percent of Andela fellows are women – which is better than global industry numbers – but the Andela founders believe the organisation can do better. “The young women we have in the programme now are meeting and exceeding expectations. We had over 1,300 female applicants to the all-female cycle,” Sass said. “We must become known as a great place for young Nigerian women to work that their families can support. At our last family day, we had more parents and siblings from the all-female class, which is a good sign.”
Though the Andela team definitely has to meet bottom lines and manage investors, it is completely focused on what it considers the company’s larger mission in the education space. When asked why he chose to work in education, E replied: “my experience here in Nigeria is that this place is brimming with talent, but we have an education system that isn’t helping that talent to grow. So for me it’s always been what can I do to make the education system work for most people, not just the people who can afford to send their kids abroad. What kind of systems can we build so that all the talents in this country can be unleashed and we can build a better country?”