This past decade, Nigeria has seen loads of companies cater to the pattern and articulate of software engineers and tech abilities in general. It’s a deliver many in the Nigerian ecosystem fancy to mutter is budding but overcrowded.
So when Chika Nwobi started Decagon in 2018, the perception changed into in general “here comes one more tech abilities accelerator.” Two years on, the entrepreneur who is a family title has vastly scaled the firm to unique heights.
Today, Decagon is asserting its $1.5 million seed spherical and a pupil loan financing facility of $25 million from Nigerian financial institution Sterling Monetary institution.
As a serial founder, Nwobi ran a few tech agencies, most notably mobile net firm MTech in the early 2000s. With Decagon, Nwobi is charting unique territory in the immediate-paced startup world after years of investing by his seed-stage firm called L5Lab.
Nwobi says Decagon goals to handle the underrepresentation of shaded other folks in tech globally, starting with Nigeria. The West African nation is the most populous on the continent and the most populous shaded nation globally.
The dire need for tech abilities in Nigeria has develop to be extra evident at the 2d, where startups are elevating challenge capital at a ridiculous tempo. Formative years unemployment in the nation is at a staggering 50%, and whereas tech has offered an avenue to beget jobs, present isn’t catching up with demand. And extra worrisome is the actual fact that the nation’s very top abilities are leaving in droves to international companies in the U.S, Canada, the U.K., and Germany.
So the subject in actual fact is present. If present is mounted, each person is cheerful. That’s what Decagon hopes for by training and connecting engineers to work remotely with both local and worldwide companies. “Microsoft, Fb and Google have all invested in constructing engineering offices in Nigeria, but most assorted companies can’t manage to pay for to fabricate that, so we assist them rating entry to top abilities to work as remote engineers,” Nwobi said.
Decagon runs a six-month software engineering program and selects its candidates according to advantage. It’s a paid program, and the software engineers are anticipated to pay about N2 million (~$4,000) tuition to rating in. Then, the firm employs an profits-sharing model when the engineers rating work and open incomes upon graduation.
But what if the trainees can no longer manage to pay for this system in the famous deliver? The pupil loan financing takes care of that, and college students who decide that option are anticipated to repay N3 million (~$6,000) in the deliver of three years.
The firm claims to be the famous to beget such advantage-based loan financing for faculty students in Nigeria. The financing is in partnership with the financier Sterling Monetary institution and Nigeria’s apex bank, the Central Monetary institution of Nigeria (CBN). It enables Decagon to provide a Pay-After-Studying belief that supplies the trainees with laptops, accommodation, net, meal allowance and a stipend. No upfront price is anticipated, says the firm.
Decagon says whereas higher than 80,000 other folks have utilized to partake in its program, it has permitted handiest 440 candidates. That’s a 0.55% acceptance price. Nonetheless, Nwobi discloses three figures to show camouflage the firm is on the actual observe: the firm has recorded a 100% placement price for its trainees, a 100% loan repayment price, and a 410% wage increment made by its software engineers after getting placement.
Global tech abilities firm Andela employed this model before pivoting, and whereas it didn’t work for them, it appears to be like to be working for Decagon. The explanation is seemingly ensuing from Andela weak equity financing to fabricate these operations, whereas Decagon makes utilize of debt.
Obinna Ukachukwu, the divisional head of Sterling Monetary institution, commenting on the pupil loan financing, said, “We got fervent to enhance different training by offering loans for Nigerian college students complemented with financial literacy training. According to the classy efficiency of the present portfolio, it made sense to scale our enhance to Decagon.”
For its equity financing, Decagon raised cash from Kepple Africa and Timon Capital. Some angel investors fancy Paul Kokoricha, managing accomplice of the non-public equity industry of ACA, and Tokyo-based UNITED Inc., additionally took section.
Nwobi says Decagon operates at the intersection of edtech, fintech and the vogue forward for work, and the funds will be weak to scale its efforts on the three fronts. The firm will additionally be taking a spy to deepen gender inclusion by rising female participation in its cohorts from 25% (its present stats) to 50% in the subsequent three years.
The CEO provides that the firm which he refers to as a “tech abilities catalyst” is successful and growing at 500% per annum. “We spy this capital as gas to tempo up our mission to transform outstanding other folks, in general from below-represented backgrounds, into world-class engineers by connecting them with financing, in-demand abilities and their dream jobs.”
“We’re overjoyed to work with Decagon to beget up the top 0.5% of vetted engineering abilities in Africa and assist join them to worldwide tech opportunities. The frequency of engineering leaders from US and European companies in our network seek recordsdata from about sourcing African and Nigerian technical abilities has increased at a immediate clip, and we’re angry to lean into that and assist Decagon on their mission,” accomplice at Timon Capital, Chris Muscarella, said in a press liberate.
Decagon’s lift comes when there is general skepticism in regards to the viability of tech abilities accelerators on the continent despite their apparent need.
Sooner than Andela changed its model, it changed into a particular market chief with over $180 million in its arsenal. Because it’s pivot, funding has moderately stalled for loads of those companies. Presumably Decagon’s pupil loan financing manner would per chance maybe well be the unique trendsetter in a deliver that desperately needs investment to resolve Africa’s abilities subject.