In the wake of the COVID-19 pandemic, remote working has become the name of the game for knowledge workers in the tech industry. Today, a startup that was an early mover on the opportunity of that model is announcing some news to double down on the concept.
Andela, the New York startup that helps tech companies build remote engineering teams while at the same time shrinking the digital divide by tapping talent out of hubs in Africa for those teams, is today announcing a big step-up in its efforts. The company is itself going fully remote, and as part of that it’s widening the pool of people that it taps to work and train by extending its reach across the whole of the African continent, while also shutting down its existing physical campuses.
Jeremy Johnson, the co-founder and CEO, said that he believes that the move will extend the talent pool that it can tap to more than 500,000 engineers from the 250,000 that it could reach through its earlier model. To date some 100,000 engineers have applied to and used Andela’s skills training tools (it works in partnership with a number of other tech companies to provide these, including Google, Microsoft and Facebook) and it has connected some 1,000 people to job opportunities.
The news comes on the heels of the company laying off 135 employees in May, with senior employees taking 10%-30% pay cuts ahead of what the company hinted would be a big change in its business — the news that’s getting announced today. Andela has confirmed that it is not making any more cuts to its staff with today’s news. (It has around 1,200 employees globally.)
We’re seeing a huge shift right now to remote working due to the persistent existence of COVID-19 and the need to keep more social distancing in place. A byproduct of that has been people actively moving out of expensive tech hubs now that it’s been accepted that being in them isn’t a fundamental requirement to do work.
At the same time, a lot of companies have either slowed down or frozen hiring of full-time employees but are continuing to tap people for project-based work because their businesses are no less in need of talent to operate.
Both of those trends are an endorsement of the model that Andela helped to pioneer with its remote teams concept, and they more pointedly spell opportunity for companies like it that already have networks in place to speak to those demands.
All the same, it’s a major shift for the startup, not least because it’s closing down its physical campuses.
Founded in 2014 out of Lagos, Nigeria, and backed by investors like Generation (Al Gore’s fund), the Omidyar Network, Spark Capital and Chan Zuckerberg Education and valued at $700 million as of its most recent funding round last year, Andela has for the last six years focused on building a network based around the biggest tech hubs on the continent, building physical spaces in Nigeria, Kenya, Uganda and Rwanda, that helped source, vet and further train talent to become part of remote company teams for some 200 customers, with a large proportion of those in the U.S., including Cloudflare, Wellio, ViacomCBS and Women Who Code.
As Andela started to scale that model, starting with a pilot in Ghana in 2018 and a second in Egypt last year, it saw that the more efficient route was to forego the physical hubs completely for virtual ones.
Indeed, Jeremy Johnson, the CEO who co-founded the company with Christina Sass, Nadayar Enegesi, Ian Carnevale, Brice Nkengsa and Iyinoluwa Aboyeji, said that its move was not a direct response to the pandemic per se, although global events have definitely given a fillip to the concept.
“What we’ve done historically is go and build a campus in each location and in the early days that made a ton of sense because that was helpful for training and from an infrastructure standpoint it was what we needed to do,” he said in an interview.
“But as we’ve transitioned to focus more on the breadth and depth of talent and diversity across the continent, we opened satellites in Egypt and Ghana where we didn’t require a campus. It’s actually worked really well and in some ways feels like it’s opening opportunities for even greater growth.”
Our own interview was via Zoom, with me in London and Johnson in New Hampshire. Andela’s New York office (where he is normally based) is closed for the moment.
“Our headquarters has technically been the internet, but we’ve had a big presence in NYC,” he said referring to its U.S. base. He added that the expansion in Africa using the satellite/remote concept is not the limit to how it applies the remote concept, with the question of what will happen in the future to even its U.S. offices still not fully answered.
“We announced a few weeks ago we are going to be a remote-first company overall going forward,” he said. “It lets you think differently about where to live and more. I don’t know what it means longer term but for now we are all living on Zoom.”
While Andela is obviously expanding its talent pool with this move, and potentially giving a huge boost to providing more job opportunities for technology talent on the continent, the interesting next step for all of us will be to see how that connects with the other side of the marketplace — that is, the big tech companies themselves and how much they need to and are willing to invest in growing their own workforces. That is not a minor issue, considering the millions that have been laid off so far in the last few months.
Andela, Johnson said, has no plans to raise more capital at the moment with money in the bank and revenues continuing to come in. Last year, it confirmed that it was on an annual revenue run rate of $50 million, but it’s not updating that figure at the moment.