Andela is a remote company that helps tech companies create remote engineering teams. It was founded in Africa, but has since expanded to a global market. SoftBanks Softbank Vision Fund 2, a $30 billion venture fund, led a $200 million Series E round.
SoftBank was joined by Whale Rock, a new investor and existing investors such as Generation Investment Management and Chan Zuckerberg Initiative.
According to Crunchbase data, Andela raised $381 million in total since its inception in Lagos, Nigeria, in 2014. The company's most recent valuation was $700 million when it raised $100 million in Series D funding in 2019.
Lydia Jett, founder partner of SoftBank Investment Advisers will join Andelas board as part of the investment. Jett stated that the biggest challenge companies face is hiring remote technical talent. We believe Andela will be the preferred talent partner of the best companies in the world as hybrid and remote work arrangements become more common.
After a successful regional expansion last year, the company started a global expansion this year. This action was in line with Andela's fully remote policy, which aims to tap into the talent pool of more than 500,000 engineers over the next years.
Andela has now grown to have engineers in over 80 countries, Jeremy Johnson, CEO, told TechCrunch. This is an increase from the seven African countries it had previously served and the 37 that were available at the start of its global expansion. It has over 200 clients, including ViacomCBS, Cloudflare, GitHub and Cloudflare.
Johnson believes that working with SoftBank will result in more acceleration of the company's current activities, especially since remote work has become more commonplace. Andela assesses the technical and soft skills and matches them to the best teams.
Andela said that Andela worked remotely because it was the reason he started his career. It is a seal of approval that top tech companies seek remote methods to build engineering teams and source talent. SoftBank and other sources tell us that it is difficult to find tech talent. Andela pushes the "easy" button for all of this.
Johnson stated that Andela employs over 300 people and will use the capital to expand its workforce, especially in product and engineering, and to grow. The company will also invest in growth, product development, M&A, and continued expansion of technology.
Johnson said that Andela is looking for talent networks to grow geographically, or in terms of client base and talent bases. Johnson also mentioned technology to help it better access and source talent, while also managing delivery.
He said that there are many moving parts, so any technology that can speed up the process is always exciting. As part of this, we are also moving towards AI.
Toptal, a freelancer marketplace, sued Andela and its employees earlier this summer. According to the complaint, the lawsuit was filed in the Supreme Court of the State of New York. It alleges that trade secrets were stolen in order to create a perfect copy of Andela's business.
The complaint also included allegations of interference with contract, unfair concurrence and misappropriation trade secrets.
Johnson stated that despite the allegations, there has been no movement. Johnson considers the lawsuit the price you pay to do things that matter and says it was an attempt to scare employees.
He said that if they were serious about the damages they would try to settle. But they don't want it to drag out.
Johnson stated that even though the company attracted some large investors, it struggled with its business model. Johnson explained that the journey of discovering ourselves is similar to all startups.
Idris Bello, a managing partner of Africa-focused VC LoftyInc Capital and an early investor in the company said investors are still optimistic about the company because they know Andelas influence will be felt in the future, especially when developers or individuals who have worked for the company come fully into their own.
It is not an easy task to combine financial returns with human development, but they have done it and are just starting to do so, he said to TechCrunch. We didn't see the impact Andelas had on the local community. It inspired others to start their own ventures, and attracted global investors.
The CEO said that most of Andelas technology comes from Africa. He also stated that the company is growing in Nigeria. This is not a major shift in technology, but more of an evolution of the company to a more global market that allows it to grow faster around the globe.
In niche regions such as Africa, the marketplace model is also used. Andela was arguably the first to use it for tech talent matching. Today, tech talent matching websites such as GetDev, TalentQL and eWorker use similar strategies, but have different business models and operations. They match engineering talent with people who need them.
Semicolon, Decagon and other platforms have modified Andela's model and continue to train engineers to make it work before they release them to the market.
Johnson isn't surprised that Andela has become a unicorn. He sees more competition in the tech talent market to facilitate global hiring. However, Johnson believes the company is ahead of the pack, with a 96% success ratio in placing engineers in the most lucrative areas. Johnson doesn't see Andela as competing with Toptal, and views his company more as a recruiting alternative than a gig economy marketplace.
He said that the success rate is testament to Andela's shift to focusing more on matching technology and building long-term relationships with talent and customers. Andela's average income increase from his previous job as an engineer is 64%.
Johnson said that it is a significant shift, especially when you consider the thousands of engineers involved. It also affects the economic development of the countries in which they live.
Andela is expanding in 80 countries. It has thousands of developers who use its platform. The number of applicants increased fivefold in the last six months. Johnson confirmed that the company's annual revenue was $50 million in 2019, but he didn't give any details, but he said that it is significantly higher now than that.
The company will next launch design as a vertical. This follows the recent launch of Salesforce engineering and data verticals. These verticals include Angular and DevOps as well as iOS, Java, Python (QA), React Native, React.js, Ruby, and iOS.
Johnson stated that Andela is supporting the development of a digital product suite as well as adding more skills to meet the needs of its growing enterprise clientele.
He said that larger companies require a wider range of skills on a regular basis. As enterprises are more comfortable with remote work and expand their talent pool, we are now expanding our talent offering.
SoftBanks investment is Andela's second in rapid succession in Africa. It is coming just a month after OPay's $400 million Series C round.
They join fintech platforms Wave and Flutterwave as the region's only billion-dollar businesses.
Africa's first unicorn was created in 2016 by Jumia, an e-commerce company. It is now publicly traded and has waited three more years to obtain Interswitch. This year, the continent has already seen four more and now has five.
It is clear that Africa is at a tipping point. SoftBank, one of Africa's first-time investors, is now writing back-to-back checks. Andela is the second non-fintech unicorn to be created on the continent.
