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Hot startup of the month: Mini-Internet network provider NodeOne

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Digital inclusion remains a novel concept in much of Africa, but a Rwandan-founded company is looking to change this by taking infrastructure to the masses.

According to Internet World Stats, African Internet penetration was still below 40% as of the middle of last year. This figure is in itself misleading, however, as the vast majority of connected Africans live in urban areas. Rural communities are still digitally excluded to a major extent, cutting them off from all kinds of crucial services.

There are several reasons for digital exclusion in African countries, with pricing and education among them. But a major one is lack of adequate broadband infrastructure, and the failure of mobile network operators to extend connectivity to far-flung areas where people have lower incomes. "Mini-telecoms" are aiming to address this, and one of those is NodeOne.

NodeOne is part of the Vuga group of companies founded by Rwandan Patrick Muhire and his brother Ceddy in 2015. Launched in Kigali, Vuga's first product was VugaPay, a cross-platform payment service that lets businesses and users transfer money across major payment systems. The fintech startup was funded by well-known US investor Tim Draper in 2016.

NodeOne, headquartered out of Toronto and San Francisco, came about after the brothers decided they wanted to help Africans get access to more affordable Internet services, which would, of course, get them using services like VugaPay on a more regular basis.

Internet for all
Launched last year after two years in development, NodeOne's hardware and software package enables anyone, anywhere to create small, affordable Internet networks.

Whereas in the past, building beyond a single-point connection required high-cost hardware solutions and software implementations to connect the "spaces in between," the maturation of Internet of things platforms means there are now myriad low-power, low-cost alternatives.

The NodeOne is one such alternative. The device allows anyone, regardless of technical ability, to set up their own mini-Internet network in less than 20 minutes. All that is needed is to mount the NodeOne in a position where it has a clear line of sight of the clients a user wants to serve, and then install as many repeaters as required to extend the network's reach.

The user can then use the device's network management console to manage the network and see real-time data analytics, as well as simply deploy custom apps. Muhire said the company is using a combination of hardware and software to provide an affordable platform for last-mile Internet services in the least developed countries.

"Telecoms in the developing world have not been disruptive over the past decades. They are more into selling high-cost Internet data packs, which most average Africans can't afford," Patrick Muhire said.

NodeOne, and other "mini-telecoms" like BRCK in Kenya, BlueTown in Tanzania and in Nigeria, are filling this gap, using the old, tried and tested method of buying Internet and reselling it to the end user.

"What we are doing differently with NodeOne is we're enabling people with no technical skills to hosts micro-Internet networks for communities to stream data without Internet access," Muhire said.

A simple concept but one that could have a lasting impact in digitally excluded communities in Africa, allowing people to get online and access financial and educational services. The company deployed the first version of the NodeOne in eight locations in Rwanda, with more than 1,200 people trying it out, and it is now building version two, which will be ready by 2021 for global scale.

"We sell the hardware – NodeOne S for US$800, NodeOne M for US$1,400, and NodeOne X at US$2,200," said Muhire.

"We have so far sold 30 sets of NodeOne X to people based in Ethiopia, Ghana, Somalia, Tanzania, Rwanda and Zambia. After the completion of version two, we are expanding to West Africa, Ghana, Nigeria then Ethiopia," he added.

The NodeOne in action.
The NodeOne in action.

COVID-19 challenges
The global crisis caused by the spread of COVID-19, or coronavirus, however, has posed its own set of challenges to NodeOne. Funded by Vuga, its parent company, the startup already faced difficulties given the high cost of producing the hardware component of its product.

"Cost of production has been the major difficulty. We have high demand for the product, but the bad news is that it takes too much time and capital to have the product sets ready for shipment," said Muhire.

He said the company had been solving this issue by partnering with major hardware manufacturers, but the COVID-19 outbreak has brought additional issues. Firstly, in the short term, sales are down, as African businesses wait to see what the future holds, but an even bigger immediate problem is getting hold of the hardware in the first place.

Though the NodeOne is built in Canada, and then shipped to Africa, all of its hardware components come from China, ground-zero for the coronavirus outbreak.

"NodeOne's hardware components are 100% from China. We have been running out of hardware and the cost of production has increased significantly since the pandemic's outbreak," Muhire said.

"We cannot ship more components for the time being as some are still pending transit and not yet delivered to our clients."

Like all entrepreneurs, and early-stage businesses, Muhire and Vuga are nothing if not adaptable, however. Already flexible by nature given the various products run by Vuga, which include a fintech platform, the team reacted quickly and has put all of its remaining funding – around US$1.5 million – into its trading platform Stoqey.

Stoqey is an automated trading platform that handles all of Vuga's trading assets for stocks and cryptocurrencies, equipped with high-end algorithmic trading technology. Using an automated arbitrage trading strategy, Stoqey trades any stock symbol worldwide from all markets, such as NASDAQ and NYSE, plus the more than 150 crypto coins on Binance.

"Stoqey ensures all our assets are generating recurring revenue at every minute of the hour," Muhire said.

In the meantime, then, the entrepreneurial focus of Muhire and the Vuga team is on encouraging uptake of Stoqey in order to protect the company's assets over the course of the pandemic. Hardly ideal, but necessary in an uncertain world.

"Those who will survive are not the strongest or the most intelligent, but the most adaptable to change," concluded Muhire.

Tom Jackson, co-founder of Disrupt Africa, special to Connecting Africa

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