KIGALI â€" About a 20-minute drive from the Rwandan capital of Kigali, thereâ€™s a barren road that leads to a construction site amid cornfields and banana trees. A single blue sign from the China Civil Engineering Construction Corporation indicates the entrance to the location, which stands at the top of a hill. There, across a stretch of red earth, a hundred workers finish constructing the first building of the â€œKigali Innovation Cityâ€.
By mid-2017, the site is slated be home to a offshoot of Carnegie Mellon University, the first African campus for the American higher education institution.
Itâ€™s one of the many signs that Rwanda is emerging as a hub for new campuses, startups and innovation. The country, which hopes to convince investors and multinational companies that it can be their African â€œlaboratory,â€ recently hosted the 26th annual World Economic Forum on Africa with a focus on digital transformation.
Rwanda had three days from the conference to fend off competition from Kenya and South Africa â€" the two countries on the continent that receive the majority of investments in new technology. Giants like Google, Facebook, Microsoft and Uber attended the event, not wanting to lose a rare opportunity to meet local startups.
Many of Rwandaâ€™s startups are born in kLab, an incubator located on the sixth floor of the Telecom House in Kigali. The decor there is clearly inspired by Silicon Valley: vivid carpets, beanbags, industrial furnishing, even a foosball table. Future entrepreneurs can pay a nominal fee for a high-speed Internet connection and use the tables for their laptops. With plenty of light and a view of Kigaliâ€™s hills, the incubator is the birthplace of many of Rwandaâ€™s startups.
"The mind must be able to get away if you want to create," said kLab's founder Michel Bézy, who is also the associate director of the local branch of Carnegie Mellon University.
One of Rwanda's most promising startups, TorQue, was born in kLab in 2011. The company developed an application that enables distributors to keep an eye on their sales and stocks in real time. â€œPreviously, everything was based on paper records creating a lot of inaccuracy and fraud," explained founder Jean Niyotwagira.
TorQueâ€™s biggest client is Dutch company Heineken, which has a near monopoly on beer and other drinks sold in Rwanda. "Thanks to that tool, they can better manage their production and adapt their marketing," said Niyotwagira.
The young entrepreneur ignored advice from friends to take up an offer to work for Heineken. Instead, Niyotwagira hopes to use the drinks company's network to start TorQue in Nigeria and Congo.
Valued at $500,000 by an insurance company that took a 10% stake, TorQue is already profitable. And Niyotwagira has started working on his next project â€" a payment platform for shopkeepers â€" for which heâ€™s partnering with African telecommunications companies MTN and Tigo.
Like Niyotwagira, entrepreneur Patrick Buchana, 25, sees Rwanda as a good springboard for his startup AC Group. The companyâ€™s â€œTap & Go Cardsâ€ are now used across Kigaliâ€™s vast bus network.
â€œMany users would dodge the fare and part of the money would disappear into the ticket seller's pocket. This is now impossible," said Buchana. "The card is free for users. They just pay for their fare and we take a commission."
AC Group, which is supported by the Rwandan government, its first client, has raised $1 million.
There's no shortage of funds for these startups. Rwanda announced the creation of a $100 million fund for innovation in 2015. In its latest report, the World Bank named the country the easiest African nation to do business in. "We've eliminated all administrative nuisance and there's no corruption," said Francois Kanimba, Rwandaâ€™s minister of trade and industry.
Located on the same floor as the kLab, Kigali also has a space called the FabLab. It was originally a technical prototyping platform for innovation that was invented by MITâ€™s Center for Bits and Atoms in the US, which has since expanded to the rest of the world.
On May 12, Rwanda inaugurated the country's first FabLab, which has since helped forge a path between ideas and a market for those ideas.
At the FabLab itself, it smells of wood and fresh paint. Two American students explained how the software, 3D printers and lasers there work to a group of Rwandans.
"We're helping them to create their own solutions," said Neil Gershenfeld, the director of MITâ€™s Centre for Bits and Atoms. "We shouldn't expect yesterday's factories to create the jobs of tomorrow. The fourth industrial revolution everybody's talking about relies on initiatives like this one."
It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.
PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.
Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.
Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.
Share capital of one billion
The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).
The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.
Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.
While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.
The infamous typo that brought the Air Next scam down
Raising Initial Coin Offering
Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.
For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."
What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".
Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.
Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.
Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.
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