Joining Gojo…
As I left Baobab at the end of 2019, I decided to tackle a new challenge. Indeed, I had been committed for the last 20 years to address poverty alleviation through financial inclusion. However, as I was thinking about my next move, it was clear that financial inclusion had reached a certain maturity and that there were other challenges worth tackling. One challenge in particular sounded exciting to me: Climate Change.
Indeed, in the last 5 years with Baobab, we had seen that our microfinance banks were not only able to address poverty by offering financial services to micro-entrepreneurs, but were also able to support SMEs excluded from financial services to help them grow.
It did not take long to see a potential convergence between Micro&SME finance and Climate Finance. A first paper from Paul Rippey @ CGAP in 2009 highlighted how microfinance could respond to Climate Change and since then many studies but also a number of investment funds have been set up to capture the Green finance opportunity.
With this in mind, I decided to leave Baobab to start acacia a green digital microfinance group focusing on Africa. My idea was simple: first, there was still a huge opportunity in Africa to provide access to financial services to MSMEs. Africa was one of the fastest growing continent on the planet, and additionally Africa’s population growth as well as the youth of the continent created huge opportunities in the coming years for anyone interested in investing in the continent. Secondly, one of the most obvious need of Africa is access to energy. Energy poverty in Africa is striking and concerns everyone: households, MSMEs as well as larger commercial and industrial activities. Finally, the needs are so huge that there will be significant financing needs at all level (micro-enterprises, SMEs, Corporate or Large projects) to support this transition and it was obvious to me that microfinance institutions will have to contribute. Therefore, I decided to build acacia. My idea was simple: 1. there was a great opportunity for M&A in Micro&SME finance in Africa: too many small MFIs that will benefit to be backed by a strong financial partner to grow faster 2. then how to grow faster small African MFIs: this will depend on a couple of factors: a) outstanding management teams b) a clear strategy designed to meet client demand with a diversity of products and channels ( products including green products and channels including mobile banking).
As I embarked on the journey of creating acacia at the end of 2019, I was invited by a number of entrepreneurs in Asia, Africa and California to support them and advise them, either joining their board or becoming their strategic advisor. Interested in staying exposed to other regions and companies, I decided to dedicate them part of my time. This is how I met Taejun, Takao and Gojo’s team thanks to the kind introduction of a friend from IFC.
As I started advising Taejun and his team, I noticed very quickly that Gojo was very similar to Baobab a few years after I had founded it company : a young and passionate team dedicated and fully committed to the company’s vision. However, in term of skills Gojo’s teams gather a large number of sophisticated investors / capital markets specialists, unlike most other microfinance holding company.
At the end of 2020, both Taejun and Takao kindly insisted that I consider joining Gojo to help them grow the company to the next stage. Taejun proposed me to join him and become one of his partner to help develop the company further. Then I started thinking… what about joining a partnership to grow Gojo and make it the largest microfinance players globally? Will we be able to do so? Additionally will I be able to develop my vision about Africa within Gojo? and finally, as an entrepreneur always very independent will I be able to work in a team? I decided to try it and to partner with Gojo.
So what did I like about Gojo?
- First, a great ambition: serving 100 million clients, operating in 50 countries,
- Second, very clear Values and Guiding Principles, that I will encourage you to read ! Having had to deal with all kind of investors in the past, it is great to partner with people sharing strong values,
- Third, an enthusiastic, passionate and highly skilled team and the possibility to work in a partnership with them learning from different cultures,
- Fourth, Gojo is exposed in some of the best markets for microfinance, and particularly in India where a lot of innovation is going on around financial inclusion, innovation that can possibly be exported globally;
- and finally an exciting project for the next 3 to 5 years: growing the company in Asia and Africa and listing it through an IPO on the Tokyo Stock Exchange,
What‘s next ?
Since joining, we have defined a clear Pre-IPO strategy and in the coming months we will start rolling it out with as a priority for 2021:
- Setup a best in class Governance framework for Gojo and its partners;
- Develop the digital strategy leveraging the capacity of our Indian Tech Hub ;
- Develop best in class playbooks for Operation, Impact and Governance ;
- Support fundraising effort in order to raise up to 200 MUSD in 2021;
- Investing more in Asia but also enter Africa.
About what about Africa and acacia ?
One of the major project for Gojo in 2021 is to enter Africa. Starting operating in Africa is a key element of the Pre-IPO equity story. However, Africa is a huge continent and we should make sure we have the right strategy and the right partners to succeed on the continent. Investing without a clear vision is the best recipe for failure, so what we will do and how we will enter Africa will clearly be one of the biggest challenge for Gojo in the coming months.
Arnaud
