Nigeria’s CcHub acquires Kenya’s iHub to create mega Africa incubator

Two of Africa’s powerhouse tech incubators will join forces. Nigerian innovation center and seed-fund CcHub has acquired Nairobi based iHub — CcHub CEO Bosun Tijani confirmed to TechCrunch.

The purchase amount is undisclosed, but Tijani said CcHub will finance the deal out of its real-estate project to build a new 10 story innovation center to replace its Herbert Macaulay Way building in Lagos.

Details are emerging on how the two entities will operate together, but Tijani noted some degree of autonomy.

“The names will stay the same…iHub  will remain iHub…it is a strong brand…but iHub  will be supported from the central CcHub, which will help them strengthen what they do,” he said.

Per the acquisition, Tijani becomes CEO of both organizations, while Nekesa Were continues as iHub Managing Director. iHub’s existing programs will remain, according to Tijani, but CcHub will extend some of its existing activities in education, healthcare, and governance to Kenya.

CcHub will also use the iHub addition to expand its investment scope. “We’ll now have access to pipeline in Nigeria, Kenya,  and Rwanda,” he said.

Tijani views the arrangement as a boost to the continent’s tech ecosystem. “It strengthens our ability to support innovation. iHub and CcHub…coming together makes us stronger; it gives us a chance to attract greater resources and talent,” he said.

The acquisition joins two of the Africa’s most recognized tech hubs. These innovation spaces, accelerators, and incubators—which tally 618 per GSMA stats—have become focal points for startup formation, training, and IT activity on the continent.

There aren’t official rankings for Africa’s most powerful tech hubs, but if there were, CcHub and iHub would arguably be up top. This would be based on the size of their membership networks, volume of tech related programs, startups incubated, partnerships, and global visibility.

Founded in 2011 in Lagos’ tech-synonymous Yaba suburb, the Co-Creation Hub has grown into a multi-faceted innovation center. The organization manages digital skills programs for entrepreneurs and school kids, startup incubation, and a portfolio of investments through its Growth Capital Fund.

CcHub is considered a go-to spot for any tech related visit to Nigeria. It was Mark Zuckerberg’s  first public stop on his 2016 Africa trip. While leaving a CcHub event in 2018, I noticed the Vice President of Nigeria, Yemi Osinbajo, and his entourage packing into the elevator.

Tijani and team have mastered gaining partnerships with big global tech names. When Facebook launched its tech space in Nigeria—NG_Hub—CcHub was named lead partner. Google for Startups sponsored CcHub’s Pitch Drive, an African startup tour to Europe and Asia. CcHub also collaborated with the Government of Rwanda this year to open its Design Lab in Kigali, focused on innovating impact solutions in health, education, and governance.

The Design Lab launch extended CcHub’s West Africa reach further east and closer to iHub. The innovation center was co-founded by Erik Hersman in 2010 out of what he saw as a need in Africa’s emerging tech scene “for…creating community spaces…in major cities [for] young entrepreneurs. The nexus point for technologists, investors, [and] tech companies.”

iHub became that central spot in East Africa. Along with M-Pesa mobile-money and a vibrant startup scene, it is one of the pillars that inspired Kenya’s Silicon Savannah moniker.

iHub is also widely seen as giving rise to the Africa’s innovation center movement that inspired the upsurge in tech hubs across the continent.

Since 2010, 170  companies have formed out of iHub. It has 16,000 members and has played host to most major visitors to Kenya’s tech scene. After seeing CcHub in Nigeria in 2016, Zuck then headed to Kenya and toured iHub.

There’ll be plenty for continuing coverage on how these two prominent African incubators settle into becoming one big Africa mega-hub. That includes the sustainability question and what this all means to the continent’s tech scene.

At a high level, for now, the CcHub-iHub union creates a direct innovation link between two of Africa’s most active markets for VC and startup formation—Nigeria and Kenya.

In the past, both countries’ techies have shared a healthy rivalry. That could now turn to more  collaborations, as CcHub’s acquisition connects East and West in African tech.

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Music Streaming Eats Downloads With On-Demand Up 42% Over 2013, Digital Sales Down 12%

Nielsen’s U.S. music report on the first half of 2014 shows digital music consumption rapidly shifting from downloads to streaming. On-demand streaming was up 42% over the first half of 2013, racking up 70 billion play in the first half of 2014. Meanwhile, digital track sales fell 13% to 593.6 million and album sales fell 11.6% to 53.8 million. The report on US trends (not international) makes Apple’s acquisition of Beats looks smart, as its iTunes download sales model is quickly dying out. As a whole, dismal digital and physical sales dragged total music sales plus streaming industry down 3.3%.
Back in the analog world, hipsters are making a serious impact as vinyl sales rose 40% over 2013 to 4 million in the first half of this year. That’s the only medium where sales grew.

[Update: It's important to note that abroad, where iTunes is available in 83+ countries and streaming services often aren't, the download may survive longer.]

If you use the standard 10X multiplier convert album sales to tracks, you get a combined 1.131 billion songs sold in the first half of 2014, down 12% from that period in 2013.

While YouTube’s music videos have been strong provider of music streaming for years, the rise of apps like Spotify is pushing on-demand audio music streaming to grow faster (+50%) than video (+35%). The two are now nearly the same size, as 33.65 billion songs were streamed in the first half of 2014, compared to 36.64 billion music video streams. At this rate, pure audio streaming will overcome music video streaming in the U.S. by the end of 2014. Internationally, where many of the top streaming apps aren’t always available, YouTube is probably still a bigger chunk of consumption.

You can see Nielsen’s full report here:

The State Of MusicTech

The music industry’s rapid recent changes make more sense after looking at this report. With the death of the download and the rise of the stream, power is up for grabs. While iTunes and to a lesser extent Amazon ruled the age of the legal download, Spotify, Google Music, and Beats are poised to reign over the streaming era.
That’s why Apple bought Beats. A source close to iTunes’ executives told me before the acquisition that Apple didn’t want to shock users and the music industry’s bottom line by suddenly converting iTunes into a streaming service. Instead, it bought Beats to allow for a graceful transition, permitting late-adopters to stick with the familiar a la carte download model while early adopters moved to Beats’ all-you-can-hear streaming subscription.

Google just acquired contextual playlist app Songza to bolster its bolster its on-demand Google Music All-Access streaming service. Google’s combatant looked a bit dry before, especially compared to Beats’ focus on expertly crafted playlists for different themes, situations, and moods. Now Google Music has a more human understanding of what people want to hear and when.

Spotify has raised over a half a billion dollars, making it too big to buy for all but the biggest players like Google, Microsoft, and Facebook. At this rate it’s going to fly independent into an IPO, though that could be tough to sell since it’s saddled with high royalty rates that scale alongside it’s popularity. Spotify bought data provider EchoNest earlier this year, and is now experimenting with an API that let’s users play their Spotify music through third-party apps. Becoming the legal backbone of music streaming in tons of apps could make its subscription more attractive to users, and I see developing an ecosystem of niche music apps around it as high-potential way to fight the platform owners.

Samsung is trying to popularize its own device-specific music service with Milk, but since its phones run Android, it highly vulnerable to Google’s native offering. While Pandora still has a huge user base, personalized radio has been commoditized and bolted on in the form of iTunes Radio and Spotify’s ad-supported version. Meanwhile, Pandora’s licensing model doesn’t allow it to offer on-demand song choices like they do, which is why I foresee it struggling in years to come.

SoundCloud offers on-demand streaming of songs and long mixtapes that users and artists upload themselves. It’s seen labels cracking down on unlicensed streaming through the app, which is trying to build out its own advertising system. While music fans view it as an authentic place to connect with artists, it’s still figuring out how to become a succesful business. The “YouTube of music” might benefit from being acquired, though Twitter recently passed on the idea, which I believe was because it needed to spend the money to get its own monetization squared away by buying ad tech companies instead.
Amazon just launched its Prime Music on-demand service.

 But rather than trying to win over serious music fans, it’s using it to simply add value to Prime subscriptions that help it earn money by selling physical goods.

Nielsen Music 2014 Mid-Year US Report

It’s more of a threat to services courting casual listeners like Pandora who just want to hear something and aren’t too picky. YouTube is expected to launch its on-demand music streaming subscription service soon as a complement to its ad supported music video streaming that gets little press but is extremely popular, especially with kids. While the on-demand service has a tough uphill climb ahead given Google already has its native Music All-Access service to promote, its free browser-based videos reduce the need to pay for a dedicated music app.

In 15 years we’ve gone from CDs to Napster piracy to iTunes downloads to Pandora radio to YouTube’s music video streaming to Spotify’s audio streaming app. Perhaps the next shift will finally see the labels loosen their death grips and allow a cornucopia of music discovery apps to flourish atop a few legal rights holders so everyone can get a listening experience that’s their jam.

Source: TechCrunch

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