Last week a 7th Unicorn appeared on the African tech landscape capping a blistering 6 months of record breaking valuations on the continent.
A Japanese backed VC firm is raising a second $100M fund to double down on a first $20M deployed across 97 African startups in 2 years.
Total volume of venture capital deployed across Africa in 2021 will break records and likely surpass combined totals of previous two years.
Clear signs that Africa’s tech ecosystem is unequivocally in rocket ship mode.
We are in the very first innings of a massive growth supercycle that will last for decades to come driven by the fastest growing, youngest population on the planet.
When I left Silicon Valley in 2018 to repatriate back to Nairobi after seventeen years, I knew in my bones Africa's tech opportunity was at hand. What drove me was a deep desire to immerse myself in the economic development challenge and to be part of changing the African narrative.
In 2019 I launched Impact Africa Network, a non-profit startup studio set up as a charitable entity, as a first phase to a strategy of building great African companies inspired by what I repeatedly witnessed in the Bay Area. Impact Africa’s mission is to ensure young talented Africans have a chance at participating in the digital transformation of Africa as creators and owners.
The non-profit structure is intentional as this is the only type of capital that aligns with the patient, bottoms up, grind it out work required to develop people even as we build projects.
The approach has proven successful allowing us to develop traction on multiple fronts including; community goodwill, brand trust, potent networks, robust talent development mechanisms, and a truly powerful set of operating capabilities and know-how for rapidly testing and developing ideas we call “the growth engine”.
However, what is most exciting is the approach has allowed us to develop a portfolio of high potential early stage projects which have every chance of becoming the next crop of unicorns on the continent.
Phase II - From Here Ventures
We are now entering the second phase of our strategy, launching From Here Ventures, an early stage venture capital fund as a parallel vehicle to the mother ship which will allow us to tap into the broader African tech opportunity.
All the advantages and capabilities we have established through Impact Africa Network accrue to FHV making for a very attractive alternative as an early stage investor on the continent. We are not the same animal, we are a beast.
Venture capital volume in Africa is projected to quadrapple from to $10B by 2025. In an inflating VC markets options accrue to the best entrepreneurs who increasingly prioritizing differentiated, value add sources of capital.
Our investment thesis is fashioned to capitalize on this fact, and, our approach is constructed around what we know to be true in this market.
The experience of developing multiple in-house projects and building a fast growing organization in Impact Africa Network has enabled us to cultivate distinctive instincts unique to the entrepreneurial journey while keeping us on the cutting edge of the building experience.
Our DNA at FHV is builder DNA. We are kindred spirits to our future portfolio entrepreneurs with whom we expect to build formidable partnerships.
Thesis - Proprietary deal flow
As the volume of venture capital increases on the continent, majority of which is domiciled offshore and operated buy non local fund managers the best African entrepreneurs will prioritize investors with deep, intrinsic understanding of how things work in Africa, local networks, operator experience, along with tangible value add capabilities on their platforms. More than money will mean something.
The inflation of Venture Capital on the continent will accrue proprietary deal flow advantage to funds that can demonstrate meaningful beyond money capabilities attractive to the most sophisticated African entrepreneurs.
Emerging from within the Impact Africa Network stable, FHV is immediately grandfathered into all the capabilities, resources, networks and tools we have developed over the past three years as founders ourselves.
From day 1 FHV comes to life with a mature set of value add capabilities founders will value. See our deck.
To execute effectively in any market one must understand the structural and cultural dynamics that exist therein. Africa is unique in many ways and many have paid a price for discounting that fact.
We have fashioned an investment approach in keeping with our beliefs and an understanding of the structural gaps, competitive landscape, and idea viability in a market that is not always what it seems.
Our approach is established on three pillars; i) human first, ii) infrastructure problems, and iii) diversity.
Pillar I - Infrastructure problems
We are excited to back entrepreneurs working on infrastructure level problems that form the rails upon which Africa’s transformation will be built. Systemic painkillers.
We believe that the most compelling opportunities on the continent exist at the ‘infrastructure layer’ of the problem stack.
Africa faces significant structural gaps across many critical sectors including financial services, education, housing, healthcare, logistics, business enabling platforms etc.
Attractive opportunities are those that provide foundational solutions which can become operating systems underpinning entire entire sectors. In many areas Africa’s future we be redefined by companies that manifest that future with their vision. That is where we seek to invest.
Pillar II - Human first
We invest in mission driven entrepreneurs who have an unwavering commitment to enhancing human wellbeing through their ventures.
We firmly believe that in a connected world the brands that will capture the future are those that can hold human wellbeing as a core operating principle and build from there backwards.
In a world where information is instantaneously global bad brand behaviour is immediately punished. This is particularly true in Africa where source looms large over any piece of information’s veracity. Africa is relational and people still rely heavily on WOM to make decisions.
In this context, brands that exist to authentically enhance human wellbeing will thrive and those that cut corners will pay a price.
This is not only true in Africa, but is a global phenomenon witnessed over the past decade driven by social media. We believe this will continue to intensify in Africa as market competition exposes consumers to more choice.
Further, the currently embryonic prospects of the Web 3 revolution, which harken to much more distributive and shared ownership structures in the value created could lend teeth to our human first ethos. The idea of sharing value with members of your community/network on your platform is very compelling to us.
Pillar III - Power to our women
We are excited to back entrepreneurs who prioritize women in leadership roles in their organizations and who are committed to gender balance.
This is an exciting one. There is no question that women already are and will continue to be crucial to Africa’s transformation.
We believe women are generally better endowed with a set of characteristics which are crucial to the effective running of highly dynamic, people centric systems of which startups are the canonical modern day example.
Women tend to have higher levels of empathy, relational perception, collaborative spirit and patience, all of which are vital to the effective running of dynamic organizations where complex knowledge work happens.
This commitment to diversity is deeply ingrained in our organizational DNA, stemming right from Impact Africa Network, where majority of senior leadership roles are held by women including the very first CEO to one of our portfolio companies. Wendy Oluoch was named CEO of JENGA School in September 2021.
The women of Impact Africa have taken this a step further establishing a livecast series where they host successful female business leaders and changemakers from around the world to share their experience with the intent of inspiring a new generation of women leaders around the world.
10 10 10
At Impact Africa we are animated by a big hairy audacious vision of developing 10 scale-ups, that provide 10K jobs with a combined value of $10B by 2030. We call it the 10 10 10 plan.
Naturally, FHV adopts this vision.
What is super motivating to us is that with FHV our philanthropic backers can now access Africa’s growth opportunity as investors rounding off our Two-Pocket strategy we have always promised them.
Onwards and upwards!
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