#31. Startup Mafias
The startups that changed their employees' lifes and their ecosystems: they created Mafias
Welcome! Have you ever wondered:
What are the best startup mafias born in Emerging Markets? 😎🚀
Which great companies did not yield a mafia? 🚶🏦
Where to explore the relationship between China and Africa? 🇨🇳🌍
If so, keep reading…
The Emerging Markets Mafias 😎
Startup mafias are startup alumni that go and found, lead or back other tech companies.
This term started being used in a Fortune magazine 2007 article when referring to the PayPal Mafia. The PayPal Mafia is the PayPal alumni that originated companies like Elon Musk’s Tesla or SpaceX, Peter Thiel’s Palantir, or Reid Hoffman’s LinkedIn.
Startup mafias are usually born from startups with successful exits, however, each one has an effect of its kind. And of course, there are startup Mafias in Emerging Markets.
Careem Mafia
Careem is a Super App in the UAE that got acquired in 2019 by Uber for $3BN. Careem spurred its own mafia: the Careem Cartel founding of startups in industries like mobility, e-commerce, fintech, and edtech, mainly focused in the UAE.
Careem’s success case had a changing effect on the local ecosystem. In the MENA area, wealth is usually tied to inheritance or family business, not entrepreneurship. Careem was the first of its kind: its founders became rich after the exit; and this inspired a new wave of entrepreneurs in the region.
Rappi Mafia
Rappi, the Colombian delivery App, meant a before and after for the Colombian startup ecosystem, and it also spurred a mafia.
Rappi Mafia is has created startups like Frubana (B2B food deliveries for restaurants) or Tribute (tax preparation software for Latin America), which also went to Y Combinator. Its mafia has created the most startups in the region.
Gojek Mafia
Gojek is the SuperApp unicorn in Indonesia that began with ride-hailing and merged with Tokopedia this year. The Gojek Mafia spurred companies like Zenius or Pinhome. Indonesia actually has a high percentage of young people wanting to start their own businesses.
But what if I told you that Gojek is the child of another mafia? It is actually the brainchild of people coming from the Zalora mafia, an online fashion retailer which was created by Rocket Internet.
Mafias in Emerging Markets create something significant: a culture of more entrepreneurship, hustle, and growth, and also that of investing and supporting entrepreneurs. They nurture the ecosystem with investing money and operators, and have a personal touch - would you invest in your former colleague?
Failure story: the Mafias that didn’t happen 🚶
A successful startup is not the only indicator of the origin of a startup Mafia. Auren Hoffman wrote an article on American Mafias, including the PayPal Mafia; but highlighted that success isn’t the predictor of Mafias: there is no Amazon Mafia or Google Mafia.
When seeing the case of Rappi yielding plenty of startups, I realized how Nubank, the Brazilian fintech giant, didn’t yield as many. It is the largest neobank in the world, valued at $25BN, and yet there is no strong Nubank mafia.
MercadoLibre did not create a mafia either. They are a solid and enduring company, which has had their trying times, but no Mafia. However, they have their own VC Fund.
In the case of Africa, it is similar: there is no obvious startup mafia.
The answers in the tweet pointed at Andela, however, the sample is not representative. Still, this case is subject to changes: the startup ecosystem is much earlier in Africa than it is in Asia or Latin America. Startup Mafias are a fuel that helps the ecosystem grow, in terms of projects and investable money. In 2021 we’re starting to see large rounds in Africa, so maybe in the next 5 years, we’ll see the OPay Mafia or the Kuda Mafia.
Source recommendation: The China-Africa Project
The China Africa Project is an independent media organization that has been covering the engagements of China with Africa since 2010.
They produce a mix of editorial content combining original material with curated information.
They produce a lot of content: a twice-weekly podcast, a weekly newsletter, a Facebook Page, a YouTube channel, and Twitter and LinkedIn posts.
They even allow students to publish essays on the relationship of China-Asia in their student Xchange section.
You can check out their work here: https://chinaafricaproject.com/