At the recent Localogy 2021 conference in Hollywood, Soci CEO Afif Khoury made an interesting comment. He and Localogy Senior Analyst Mike Boland were discussing how the pandemic has changed the way we work. And specifically how it has expanded the talent pool from what’s in your city to what’s around the world.
He noted that his two most recent engineering hires — whom he spoke of glowingly — came from Nigeria. That’s about six time zones away from Soci’s Austin headquarters. But in many fields like engineering, the work doesn’t always have to happen during regular office hours. So why not take advantage of the best talent the world has to offer? And often at rates considerably lower than what a Silicon Valley veteran would command.
The Global Talent Pool
Andela is a fully remote company, based in New York but with its roots are in Africa. The company began with a mission to pair African tech talent with global companies. It has since expanded that mission to more than 80 countries worldwide. The company plans to be in 100 countries by the end of the year.
As noted, the pandemic has broken down the walls that prevented many companies from tapping into this resource. As a result, demand for skilled tech workers from Nigeria and elsewhere in Africa has swelled. One side effect of this is that many African startups complain that they now have to offer Western-level salaries to attract the best engineering talent. Andela reports that the engineers it places earn on average 64% more than their previous job.
This no doubt contributed to Softbank’s decision to pour $200 million into Andela in a Series E round announced last week. The round gives Andela, founded in 2014, a $1.5 billion valuation. The company is currently led by Jeremy Johnson. He is one of a founding team that also includes Iyinoluwa Boyeji, Christina Sass, and Ian Carnevale.
Fast Forward Seven Years
Needless to say, the pandemic has been transformational for Andela’s business. Here is what CEO Johnson said in a blog post announcing the Softbank investment.
“In 2014, when we started Andela, the concept of remote work was well known in the engineering world, but rarely practiced,” he explained.
“The perception was that in order to do collaborative work, you had to be around other people five days a week. Fast forward seven years and one viral catastrophe. It’s become obvious that not embracing remote in some capacity — and therefore constraining hiring to twenty miles from a company’s physical offices — is irresponsible. The challenge: how do you hire the right people when you have the whole world to choose from?”
Back in June, my colleague Neal Polachek wrote about Internet legend and current venture capitalist Marc Andreessen declaring the end of the “geographic lottery.” This is the system that gave all the best jobs to those in proximity to a handful of global tech hubs.
“Permanently divorcing physical location from economic opportunity gives us a real shot at radically expanding the number of good jobs in the world while also dramatically improving the quality of life for millions, or billions, of people,” Andreessen wrote.
Andela adds value by making the process of finding qualified international talent manageable.
“As soon as you open global hiring, all of a sudden you get 10x the applicants. But companies don’t have the systems to source the right candidates, assess them properly, and navigate global compliance and labor laws. In short, global hiring in 2021 is an obviously good idea, but complicated to do well on your own,” Johnston said in his post.
SoftBank’s Growing Interest in Africa
SoftBank clearly sees the same explosive post-Covid talent-acquisition opportunity that Johnson describes. SoftBank makes big bets. And $200 million is still a pretty big bet. SoftBank Vision Fund 2 led the round. Other investors joined, including new investor Whale Rock and existing investors Generation Investment Management, Chan Zuckerberg Initiative, and Spark Capital.
“Hiring remote technical talent is one of the top challenges that companies face today. We believe Andela will become the preferred talent partner for the world’s best companies as remote and hybrid work arrangements become the norm,” said Lydia Jett, Partner at SoftBank Investment Advisers. “We are delighted to support Jeremy and the Andela team in their mission to connect these companies with brilliant engineers. And in the process, unlock human potential at scale.”
Jett will join Andela’s Board of Directors.
This is actually SoftBank’s second recent investment in an Africa-related company. In August, Softbank’s Vision Fund 2 led a $400 million funding round in OPay, a Chinese-backed mobile money player based in Nigeria. That round raised OPay’s valuation to a reported $2 billion.