It was a business hard won against bullets and bullies in the tough South African townships. Now Luvuyo Rani, the man who started a multi-million-dollar tech business by selling out of the boot of his car is telling the rest of the world how tech entrepreneurs can bridge the so called “digital divide”.
It is just after breakfast on a crisp spring morning on campus in Boulder, Colorado. Rani is chipper, far from home, and ready to talk. His ready laugh speaks of bitter-sweet experience.
This is one reason why the professors at the 150-year-old University of Colorado, an institution that produced three US Supreme Court Justices and five Nobel laureates, invited Rani back this year.
This year he led three panels and two lectures at its annual world affairs conference, alongside delegates from 60 countries talking about everything from Africa to artificial intelligence (AI).
It’s a sign of the continent’s growing stature that he is being invited to tell Africa’s story at a US university. “I think Africa is at the centre of the conversation rather than being invisible. I think the opportunity we have is to carry that flag and talk about our continent and the opportunities.”
Bringing tech to the masses
I last spoke to Rani 12 years ago, and a lot has changed since then. The World Economic Forum-linked Schwab Foundation helped his international image when they made him Social Entrepreneur of the Year in 2016.
Rani has spent the last 20 years helping entrepreneurs in some of South Africa’s poorest communities as CEO of Silulo Ulutho Technologies. Once the cheap labour dumping ground of apartheid, in the 21st century townships are still a graveyard of dreams for many young hopefuls. This is where Rani has made his money: by putting computers in the hands of those who need them.
Silulo Ulutho Technologies generates revenue through a “one-stop shop” model that provides IT services, training, courses and products to residents and small businesses in townships and rural areas. Silulo offers affordable courses in computer literacy, end-user computing and “soft skills” (such as CV or resumé writing and interview skills). It also sells computers and hardware directly to community residents, schools and local businesses. Rani’s firm has 46 centres across South African townships, teaching tech skills – and he has a plan to increase that to 200. Each centre has 20 to 30 computers and teachers to help the uninitiated master the internet and other core computing skills.
For the last three years the company has also taught entrepreneurial skills – part of a model he wants to reproduce in poor neighbourhoods across Africa. “We support entrepreneurs because we train people in South Africa, but the jobs are very scarce. In the last three years, we have produced more than 400 entrepreneurs. The beauty of that is it opens up training and funding from the government and the private sector. So that is how we unlock the value,” he says.
Many of the 100,000 people who, he estimates, have been trained in the last 20 years have gone on to work in call centres and offices, in jobs they would never have dreamed of. It may be a drop in the ocean in a nation burdened by massive youth unemployment but, at the least, Rani is trying to tackle the problem at its root instead of merely making speeches about it.
“These days we also train them in AI, social media and cyber-security,” he says.
The entrepreneurs trained by the centres now employ scores of people, including graduates of the computer training course.
The businesses range from horticulture to e-commerce and coffee shops.
The next planned move is to replicate the model in the townships of Kenya; then, if successful, in Botswana, Lesotho and Swaziland – perhaps 30 to 50 centres in each country, he says.
Rani has worked out it will cost just shy of $40,000 to set up each centre. The task of finding this has been eased by a recent investment from South African petroleum and energy company Astron Energy. “Our biggest cost is people, so we are looking for a partner to help us with this,” he says.
Township dreams
Rani started life in a township in Queenstown in the Eastern Cape, now known as Komani.
When he was a teenager he helped his mother run a shebeen – an illegal drinking den – in the family sitting room. His mother was a domestic worker, earning very little; the shebeen meant survival.
It was never an easy way to make money. In the late 1980s it was still illegal for black people to drink alcohol without a permit from the police station. It meant the police raided the shebeen, as regular as clockwork, often arresting Rani’s mother.
Rani’s job was to hide crates of booze in an attempt to convince the police that it was a mere private party.
When the police left, with his mother in handcuffs, Rani would emerge and carry on serving the drinks long into the night. Drunken customers would knock on his bedroom window demanding beer in the early hours of the morning.
Nearly 30 years later, he admits his part-time job interfered with his studies. “It certainly taught me how to deal with people,” he says. “I don’t think I would have been here today if it were not for those difficult days.”
Like many aspirant youths in Komani, Rani trained as a teacher, earning a BTech from a college in Cape Town.
South Africa was on the cusp of democracy and Rani wanted more from freedom than the paltry teacher’s pay from his first post, in which he taught business and economics at Kwamfundo Secondary School in Khayelitsha township. Rani tried township tours and selling phones, nappies and cakes – until he realised that the biggest need in the township was a computer connection to the internet.
Selling tech from a car boot
Rani quit his job and drove across the townships selling computers to schools from the boot of his Corsa Lite.
“Nobody took me seriously when I asked to do presentations. Others were saying, ‘You’re not okay, you’re mad, you can’t be selling second-hand computers’,” he told me in 2014.
Yet he had spotted a gap in the market. Teachers in the townships were supposed to teach computers on the curriculum, but most didn’t have access to tech or knowledge.
Paying for computers was also a hurdle. Rani clustered the teachers in groups of six, pooling $35 a month each into a stokvel – an informal savings or investment group. Within six months each teacher had access to their own computer.
It took a $900 loan to start the business, and the help of his brother Lonwabo, who was training as an engineer. By the following year, the two sold around 35 computers a month.
Soon their customers were returning the computers for repairs and maintenance. The brothers took the computers back to the supplier because they didn’t know how to fix them, but realised repair was another business opportunity.
Then they hired a technician to fix them – and had to make him a shareholder because they didn’t have any money to pay him. It was tight in the early days and, to add insult to injury, the bank wanted to repossess the humble Corsa Lite.
Finding premises in which to carry out the computer training was just one small step along the way. For the first six months Rani and his colleagues suffered threats of eviction and legal action from suppliers for falling behind with payments. Eventually the business stabilised. By 2014, nearly a decade after the opening of the first centre, Silulo Ulutho Technologies was turning over $1.8m a year.
“We really wanted to make an impact in the township. People in the rural areas need to have key role models they can learn from and realise that it’s possible to start from nothing and build something.”
Facing down criminals
I’ve interviewed scores of township business people in the last 20 years and all of them say nothing is earned without a fight. Crime, South Africa’s biggest bugbear, dogged the business long after it became established.
“Guns, extortion and protection rackets were traumatising staff members, who would then leave,” Rani says.
“There was a time when these guys came in, young ones, they closed the door and put a gun in my face. Luckily, my staff hit the panic buttons, so the guys shot in the store and ran out.”
Another gang of eight put Rani face down on the floor – stealing his money, car keys and laptops before driving away. Yet another gang burned down his offices when he refused to pay protection money. “But I think that was personal, even though, to this day, I don’t really know,” he says.
Crime also haunted the company’s investment efforts. Rani secured a 2.5m rand investment (now $152,000) with a handshake in Cape Town and then got onto a plane heading home to the Eastern Cape. “As I was getting onto the plane for East London I saw from my email that the money was diverted to another account!
“That was the longest plane journey of my life… What they had done was intercepted my email and used it to give the financial director of the company we were dealing with instructions to send the money to their account… Then the next thing the person who we were meant to pay for new premises was ringing up saying: ‘Where is my money?’ ”
On landing, Rani investigated; traced the fraud to one of the people in his call centre and opened a case with the police. Eventually he got the money back, though it took quite some time.
‘Utilise this energy’
These days, Rani’s working life is a lot more peaceful. He lives with his family in the genteel countryside near the university town of Stellenbosch in the Western Cape. He spends less time in the townships and more time looking to expansion in Kenya and the rest of the continent, although he says better political leadership is needed to unlock opportunities for businesses like his.
“You need to utilise this energy. You have Kenya, South Africa, Rwanda and Egypt – you see those pockets of innovation that are coming in… Looking at the leadership, Africa has a problem with the leadership.
“They have to understand now things have changed and entrepreneurship and social entrepreneurship has to be at the centre,” he says.
“The old ways of doing things have shifted. In the next two years, or three years, a young guy from Nigeria or Khayelitsha is going to find a solution around AI and it is going to make him a billionaire.”
Rani believes AI, and the way Africa approaches it, is also going to be crucial to the economic well-being of the continent.
“Look at AI, we could be one of its victims if we don’t understand it and protect the data so people can make sure companies coming into the continent are not exploiting and taking over,” he warns. “I think we need a long-term view of how we see ourselves in the next 100 years.”
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