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Inside Iyin Aboyeji’s plan to build charter cities for African tech



African cities, particularly sub-Saharan ones, have the fastest global urban growth rate. But with challenges around overcrowding, congestion, infrastructure, power and poor governance, these cities are maxed out in what they can provide to the average African living in urban environments.

Some experts think charter cities offer a solution. They are granted a special jurisdiction to create a new governance system and allow city officials to adopt best practices in commercial regulation.

Typically, charter cities are public-private partnerships between city developers and host countries. There are a few examples of successful charter cities globally—Singapore, Shenzhen and Dubai among them—but most have underperformed or failed, especially in Nigeria.

For instance, Eko Atlantic, a purpose-built city near Lagos, planned to house more than 250,000 people in an area where a large majority of its 15 million population cannot afford housing. The ongoing project, which commenced in 2009, also threatens to displace tens of thousands of people who live in coastal areas around the new development.

Nigeria’s special economic zones (SEZ)—regions with different business and trade laws from the rest of the country, with tax and business incentives coupled with regulatory innovation—have also struggled. For example, the 16,500-hectare Lekki Free Trade Zone hasn’t lived up to expectations.

The precedent set by these two plans showcases a more significant problem: Charter cities and SEZs often can’t escape the crisis and economic stagnation of their host state, particularly in poor countries.

This is why there’s some skepticism surrounding the Talent City project, a futuristic charter city for tech professionals announced in January 2020 by Future Africa, a firm housing rolling funds and collectives that invest in African startups. But the firm believes the planned city will be a success because it will focus on “creating jobs and attracting the talent that drives Africa’s technology, innovation and digital economy.”

Talent City, in a statement, the city will be managed within a free trade zone with its own “productivity-focused, entrepreneurial-centred regulations and bylaws.”

Do African states need charter cities for tech?

It’s been two years since this announcement. And while no single structure has been constructed, Future Africa general partner Iyinoluwa Aboyeji and his partners have continuously touted Talent City’s promise.

Progress has been incremental, but Talent City has acquired land to begin construction of its first location: Talent City Lagos, a 72,000-square-meter plot of land located in Alaro City, a 2-000 hectare city-scale development area in the Lekki Free Zone.

This first prototype city, featuring a central coworking campus and a variety of housing options, will be home to 1,000 residents and 2,500 remote workers. These figures are subject to change, the company said.

On a call with TechCrunch, Aboyeji, who kickstarted the project with Luqman Edu and Coco Liu, points out three main problems Talent City hopes to solve for techies.

During Aboyeji’s time at Andela, the company was still a tech talent incubator and housed engineers in its hubs. Between 2014 to 2017, the company spent heavily on office settings and living quarters because most real estate developers in Lagos didn’t understand how to build real estate for tech people, said the Andela and Flutterwave founder.

Andela, like many others, also faced issues around power, internet and commutes. Furthermore, these startups contend with stifling government policies (2020’s ride-hailing ban and last year’s cryptocurrency ban come to mind), political instability and security issues.

“This was not just an Andela problem,” said Aboyeji, who also co-founded payments unicorn Flutterwave. “Today, I run an investment firm with 60 portfolio companies (mostly technology companies) and over $20 million in assets under management, and they all continue to tell me the infrastructure problem has not only gotten worse but more expensive to solve.

“Over the years, the industry has grown from when I was at Andela. Last year, the technology industry raised over $1.4 billion in venture capital. Yet entrepreneurs in Lagos are still stuck in a subpar environment despite a strong drive to build, deeply frustrated with their living conditions along with a system that is not functional.”

Talent City, he claims, could remedy these problems. 

According to Aboyeji, Talent City is being designed for remote work and built for the niche of tech entrepreneurs and professionals. The charter city will provide infrastructure for tech such as constant power and high-speed internet; favorable policies that enable innovation; and a like-minded community of people who live and work in proximity to each other.

Aboyeji said that constructing the compound within the larger ecosystem of Alaro City will shield Talent City and its inhabitants from knee-jerk government reactions to policy changes, which will be critical to its ultimate success. 

“We’re trying to build for the part that we’re good at, which is the community and the technology piece of things. We’re not trying to reinvent the wheel by negotiating something new with the government,” said Liu, a former designer at Google and Line and Talent City’s head of operations and experience.

“And that’s why we positioned ourselves strategically in the Free Trade Zone within a larger city. So we have de-risked in terms of policy and infrastructure from both sides of the ecosystems we belong to.”

Africa’s new Silicon Valley?

Liu’s comments are telling. Contrary to other charter cities, which are built as public-private partnerships, Talent City’s first project in Lagos would eschew government participation. 

Talent City is taking advantage of Alaro City’s already-formed partnership with the Lagos state government, thus providing some coverage in that aspect, said Edu, adding that the company took this route because it needs to be able to test out ideas in Lagos before using it as a prototype to replicate in other parts of Africa. 

“The plan for Talent City is to scale across Africa… We are already speaking strategically about where we intend to put the second one once we get this one up and running. We have set up charter cities across Africa from the beginning,” said Edu, who also owns real estate services and proptech companies currently operating in 12 states of Nigeria.

It’s understandable why the team thinks highly of its project. But Nigeria’s tech ecosystem—with Lagos at the forefront, even regionally (the city is Africa’s startup capital from the recent StartupBlink report released this month)—has managed to pull in billions of dollars in venture capital funding and minted three unicorns last year, despite battling all of the infrastructure challenges.

So is Talent City even necessary? 

Aboyeji argues that while a lot of money has been pumped into Nigerian tech, real estate prices for offices and housing are becoming prohibitively expensive due to a lack of infrastructure, which Talent City wants to fix.

Also, in the past, founders and tech professionals alike touted Yaba, a suburb of Lagos, as the country’s Silicon Valley. But big company exits by the likes of Andela and Konga in 2017 (and several others over the years) due to infrastructure deficits and a fading sense of community has stained the town’s once-heralded tech reputation.

And though we now operate in a remote-first world, companies cannot guarantee that their employees have what it takes to deliver amenities themselves consistently. So although startups and tech professionals have found different places to thrive within Lagos, especially on the island part of the city, Talent City is hoping to draw in that talent to become “Africa’s Silicon Valley.”

The company said its pricing will be competitive enough for individuals and corporations as it “offers monthly rent and mortgages to match global expectations,” along with communal benefits of working together.

Aboyeji said his venture capital firm, Future Africa, which is remote-first, will also move its headquarters to the new city. Future Africa is the majority owner of the project. With founding residents such as prominent founders and VCs (Yele Bademosi, Timi Ajiboye, Nadayar Enegesi and Kola Aina have already taken pieces of real estate), local tech companies may make similar transitions — if the city takes shape.

Iyinoluwa Aboyeji (Andela and Flutterwave co-founder; Future Africa founding partner, and Talent City co-founder)

Talent City will be working with Amsterdam-based design and urbanism firm NLÉ and real estate agency Jones Lang LaSalle for community and development management purposes.

The charter city—backed by Pronomos, Charter Cities Institute, Ventures Platform and LoftyInchas raised more than $13 million for its Lagos project. However, Aboyeji said fundraising efforts are still ongoing. The first construction phase is set to begin by May, with some structures completed by the end of 2023.

“We can’t build a $1.4 billion industry in thin air. I mean, it sounds romantic. And so people want to try it. And I’ve been one of those advocates of attempting it. But the ecosystem must have an address,” said Aboyeji, who referenced a trip to Israel as an influential factor in starting Talent City.

“So I think the important thing is that this becomes that address for the ecosystem, it becomes where people come together to do tech. It has amazing prospects; there’s a seaport opposite our location and an airport about 20 minutes away, so this is undoubtedly going to be the future of Lagos. And I think it would be really fun for tech to get here first.”

Aboyeji isn’t the only tech leader trying to build a private city. Ryan Rzepecki, an ex-Uber executive who sold his electric bike company Jump to the mobility tech giant, said in 2020 that he wanted to fund a politically autonomous charter city to welcome tech workers abandoning Silicon Valley during the pandemic.

However, his reasons differ from Aboyeji. In an interview with The Telegraph, Rzepecki said his goal was to fix the homelessness crisis in San Francisco.

“The way we have built regions and cities is not fundamentally sustainable and there is a chance to build new places that are better, more sustainable and environmentally friendly,” he said in the interview.

“There is a pretty broad spectrum of people who are interested in this and I think most people, or at least myself, are trying to make a better world in the broadest terms. It’s not like things are working for everybody on the planet at the moment. I think having some people say, ‘let’s try something different, shouldn’t be met with skepticism.’”

And some big-name investors aren’t skeptical: Peter Thiel and Marc Andreessen invested in Pronomos, a backer of Talent City. While successful charter cities have been created with government backing, the tech hubs of the future are attracting private funds, suggesting it’s only a matter of time before a blueprint is drawn for charter cities to be replicated globally.


The market has changed, but super-voting shares are here to stay, says Mr. IPO



Yesterday, the ride-sharing company Lyft said its two co-founders, John Zimmer and Logan Green, are stepping down from managing the company’s day-to-day operations, though they are retaining their board seats. According to a related regulatory filing, they actually need to hang around as “service providers” to receive their original equity award agreements. (If Lyft is sold or they’re fired from the board, they’ll see “100% acceleration” of these “time-based” vesting conditions.)

As with so many founders who’ve used multi-class voting structures in recent years to cement their control, their original awards were fairly generous. When Lyft went public in 2019, its dual-class share structure provided Green and Zimmer with super-voting shares that entitled them to 20 votes per share in perpetuity, meaning not just for life but also for a period of nine to 18 months after the passing of the last living co-founder, during which time a trustee would retain control.

It all seemed a little extreme, even as such arrangements became more common in tech. Now, Jay Ritter, the University of Florida professor whose work tracking and analyzing IPOs has earned him the moniker Mr. IPO, suggests that if anything, Lyft’s trajectory might make shareholders even less nervous about dual-stock structures.

For one thing, with the possible exception of Google’s founders — who came up with an entirely new share class in 2012 to preserve their power — founders lose their stranglehold on power as they sell their shares, which then convert to a one-vote-per-one-share structure. Green, for example, still controls 20% of the shareholder voting rights at Lyft, while Zimmer now controls 12% of the company’s voting rights, he told the WSJ yesterday.

Further, says Ritter, even tech companies with dual-class shares are policed by shareholders who make it clear what they will or will not tolerate. Again, just look at Lyft, whose shares were trading at 86% below their offering price earlier today in a clear sign that investors have — at least for now — lost confidence in the outfit.

We talked with Ritter last night about why stakeholders aren’t likely to push too hard against super-voting shares, despite that now would seem the time to do it. Excerpts from that conversation, below, have been lightly edited for length and clarity.

TC: Majority voting power for founders became widespread over the last dozen years or so, as VCs and even exchanges did what they could to appear founder-friendly. According to your own research, between 2012 and last year, the percentage of tech companies going public with dual-class shares shot from 15% to 46%. Should we expect this to reverse course now that the market has tightened and money isn’t flowing so freely to founders?

JR: The bargaining power of founders versus VCs has changed in the last year, that’s true, and public market investors have never been enthusiastic about founders having super voting stock. But as long as things go well, there isn’t pressure on managers to give up super voting stock. One reason U.S. investors haven’t been overly concerned about dual-class structures is that, on average, companies with dual-class structures have delivered for shareholders. It’s only when stock prices decline that people start questioning: Should we have this?

Isn’t that what we are seeing currently?

With a general downturn, even if a company is executing according to plan, shares have fallen in many cases.

So you expect that investors and public shareholders will remain complacent about this issue despite the market.

In recent years, there haven’t been a lot of examples where entrenched management is doing things wrong. There have been cases where an activist hedge fund is saying, “We don’t think you’re pursuing the right strategy.” But one of the reasons for complacency is that there are checks and balances. It’s not the case where, as in Russia, a manager can loot the company and public shareholders can’t do anything about it. They can vote with their feet. There are also shareholder lawsuits. These can be abused, but the threat of them [keeps companies in check]. What’s also true, especially of tech companies where employees have so much equity-based compensation, is that CEOs are going to be happier when their stock goes up in price but they also know their employees will be happier when the stock is doing well.

Before WeWork’s original IPO plans famously imploded in the fall of 2019, Adam Neumann expected to have so much voting control over the company that he could pass it along to future generations of Neumanns.

But when the attempt to go public backfired — [with the market saying] just because SoftBank thinks it’s worth $47 billion doesn’t mean we think it’s worth that much —  he faced a trade-off. It was, “I can keep control or take a bunch of money and walk away” and “Would I rather be poorer and in control or richer and move on?” and he decided, “I’ll take the money.”

I think Lyft’s founders have the same trade-off.

Meta is perhaps a better example of a company whose CEO’s super-voting power has worried many, most recently as the company leaned into the metaverse.

A number of years ago, when Facebook was still Facebook, Mark Zuckerberg proposed doing what Larry Page and Sergey Brin had done at Google but he got a lot of pushback and backed down instead of pushing it through. Now if he wants to sell off stock to diversify his portfolio, he gives up some votes. The way most of these companies with super voting stock are structured is that if they sell it, it automatically converts into one-share-one-stock sales, so someone who buys it doesn’t get extra votes.

A story in Bloomberg earlier today asked why there are so many family dynasties in media — the Murdochs, the Sulzbergers — but not in tech. What do you think?

The media industry is different from the tech industry. Forty years ago, there was analysis of dual-class companies and, at the time, a lot of the dual-class companies were media: the [Bancroft family, which previously owned the Wall Street Journal], the Sulzbergers with the New York Times. There were also a lot of dual-class structures associated with gambling and alcohol companies before tech firms began [taking companies public with this structure in place]. But family firms are nonexistent in tech because the motivations are different; dual-class structures are [solely] meant to keep founders in control. Also, tech companies come and go pretty rapidly. With tech, you can be successful for years and then a new competitor comes along and suddenly . . .

So the bottom line, in your view, is that dual-class shares aren’t going away, no matter that shareholders don’t like them. They don’t dislike them enough to do anything about them. Is that right?

If there was concern about entrenched management pursuing stupid policies for years, investors would be demanding bigger discounts. That might have been the case with Adam Neumann; his control wasn’t something that made investors enthusiastic about the company. But for most tech companies — of which I would not consider WeWork — because you have not only the founder but employees with equity-linked compensation, there is a lot of implicit, if not explicit, pressure on shareholder value maximization rather than kowtowing to the founder’s whims. I’d be surprised if they disappeared.

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Tesla brings back European referral program as end of Q1 nears



Tesla is bringing back its referral program to Europe, a strategy that taps into the brand loyalty of customers as it seeks to preserve market share and boost sales before the first quarter of 2023 closes.

The referral program follows Tesla’s move to reduce prices in a variety of markets, including Europe, China and North America.

Starting Tuesday in Europe, new Tesla buyers can receive 100 so-called “Loot Box Credits” when referred by a current Tesla owner, who will get 2,000 credits for the referral. If the referred customer takes delivery before March 31, 2023, they’ll get a bonus of 5,000 free Supercharging kilometres, and the referrer will get 10,000 credits. Those credits can be redeemed for software upgrades, up to 10,000 kilometers of free Supercharging “and more.”

Tesla has never used traditional advertising, so the company has historically used its referral program to get its loyal customer base to promote vehicles. Those rewards have changed over the last few years. At certain points, owners could win rewards like having a photo of their choosing launched into deep space orbit, an invite to an upcoming Tesla event, or even free new Roadsters to owners who accumulated enough referrals.

Tesla realized such extravagant rewards were starting to eat into profits, so in 2019 the automaker paused the program and came back with a more reasonable one that gives the referral giver and receiver 1,000 miles of free Supercharging each.

Last November, Tesla launched a revamped referral program in the U.S., which gives out credits that can be put towards the purchase of Tesla solar products, like the Solar Roof and Solar Panels. Tesla also launched a program in China called Treasure Box, where owners get credits that can be used towards the purchase of accessories like vehicle chargers, t-shirts or shot glasses.

The move in Europe suggests that Tesla is trying to hold onto, or even grow, its market share dominance. Tesla was the most popular EV brand in Europe last year, with the Model Y and Model 3 topping the ranks at 138,373 and 91,257 sales, respectively. Following behind were the Volkswagen ID.4 with 68,409 unit sales, the Fiat 500 electric with 66,732, and the Ford Kuga plug-in hybrid EV with 55,018 sales, according to Inside EVs.

While Tesla was the most popular EV brand in Europe last year, it actually falls behind the large multi-brand OEMs. Volkswagen Group, which includes brands like Audi and VW, actually has the largest market share of plug-in EVs with 20.6%. Stellantis, BMW Group and Hyundai follow with 14.6%, 10.5% and 10.1%, respectively. Mercedes and Tesla are tied at around 9% share.

As of this week, Tesla has finally hit production capacity of 5,000 vehicles per week at its Berlin gigafactory — a milestone CEO Elon Musk had originally promised for the end of 2022. While production numbers don’t equal sales, it’s possible that the increased production in Europe could help the automaker maintain its position and gain even more market share in the future.

The referral program isn’t the only move Tesla has made to boost sales, particularly before it reports quarterly earnings. In January, Tesla cut prices for Model 3 and Model Y vehicles in the U.S. and Europe by 20%. Earlier this month, the automaker slashed Model S and Model X prices in the U.S. as well.

In December 2022, Tesla also provided up to $7,500 discounts for vehicles purchased and delivered before the end of the year in the hopes of attracting buyers who might otherwise wait for the new year when Inflation Reduction Act incentives would kick in.

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Pinterest brings shopping capabilities to Shuffles, its collage-making app



Pinterest announced today that it’s testing ways to integrate Shuffles collage content into Pinterest, starting with shopping. Shuffles, which is Pinterest’s collage-making app, launched to general public last November. To use Shuffles, users build collages using Pinterest’s own photo library or by snapping photos of objects they want to include with their iPhone’s camera. The iOS-only app is available in the U.S., Canada, Great Britain, Ireland, Australia and New Zealand.

Shuffles will now have all of the shopping capabilities as regular pins. Users will be able to tap individual cutouts used in collages, see the brand, price, and other product metadata along with similar products to shop.

“Unlike typical product exploration, Shuffles bring an interactivity that makes the experience inspirational and fun,” the company said in a blog post. “Gen-Z is curating fresh, relevant content alongside their peers, which is quickly making for a marketplace of trendy, shoppable ideas. The high density nature of Shuffles, which can include layers of product cutouts from multiple Pins, allows consumers to dig deeper and also connect to other Shuffles that include the same Pins. As we look ahead to how consumer behavior is evolving, we’re testing ways of integrating Shuffles collage content into Pinterest, starting with shopping.”

Although Shuffles surged to become the No. 1 Lifestyle app on the U.S. App Store in August when it was invite-only, the app’s popularity has since declined. By bringing shopping capabilities to Shuffles, Pinterest is likely looking for ways to retain users on the standalone app.

Image Credits: Pinterest

Pinterest also announced that it’s exploring a new takeover feature for advertisers called “Pinterest Premiere Spotlight” that prominently showcases a brand on search. The company says the feature is designed give advertisers a new way to reach users on Pinterest.

The company says 97% of top searches on Pinterest are unbranded, which means users typically don’t type a brand name into their searches on the platform. This gives brands the opportunity to be discovered as they help consumers go from discovery to decision to purchase, Pinterest says. In the coming months, the company planes to offer additional ways to help brands connect with shoppers.

Pinterest also shared some new stats about its Catalogs offering, which lets brands upload their full catalog to the platform and turn their products into dynamic Product Pins. The company says it has seen a 66% increase in retailers setting up shop by uploading or integrating their digital catalogs on its platform, along with 70% growth in active shopping feeds year over year globally.

As part of its most recent earnings release, Pinterest revealed that its platform now has 450 million monthly active users globally, a 4% jump year-on-year. Pinterest has been focused on enhancing the shopping experience on its platform over the past few years, and said during its earnings call that it wants to make every pin shoppable, including videos.

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