July 2023 Newsletter: A Mid-Year Update from Untapped
This newsletter was originally sent to The Untapped Network on Tuesday, July 4th. To subscribe for future updates please click here.
Good morning, good afternoon, and good evening!
TL;DR…
- Our last quarter’s revenues came in at $1.024M, just a touch above our previous quarter’s revenues of $1.012M, but we anticipate a decline over the next months due to a refocus of our capital deployments towards mobility and new fundraising efforts towards institutional capital allocators.
- Our growing team has reached 39 staff, with the majority based in Kenya (23 out of the total). The data team grew the fastest, now with 7 data scientists and engineers building out our data platform, and many new additions are interns and junior level talent we’ve brought on to grow alongside us.
- We accepted our first contribution from a Donor-Advised Fund (DAF) and are launching new features in late 2023 to make it easy for owners of DAFs to contribute to empowering entrepreneurs while protecting and growing their charitable endowments.
Untapped 2023 YTD by the numbers:
- $1.024M: Last quarter revenue at Untapped
- 25.04%: Annualized return on deployed capital (cumulative to date)
- 13,798: Number of micro-entrepreneurs supported through Untapped financing
- 312%: Annualized Economic Rate of Return, i.e. each $1.00 Untapped provides in financing yields $4.12 of incremental revenue EACH YEAR for micro-entrepreneurs we support through our Operating Partners
- 100%: Repayment rate to our Noteholders
The Bad…
We expected to see a lull in revenue growth in Q1. We didn’t see much of a lull, but it’s coming! This lull isn’t due to a decline in our business or in the markets in which we work. Some of this had to do with a less active than usual December and January, but more importantly, we are refocusing our portfolio towards key sectors that are bringing the fastest growth, highest returns and impact, and best suitability for global institutional investors (private credit). In doing so, we have shifted capital deployment so that we can start grouping them into themed portfolios, including mobility, climate, and payments. The downside is that we will see a drop in our revenue growth for a few more months until we put more of these portfolios together.
And what about Africa’s macro environment? We’ve seen a softening in the market in the revenues from micro-entrepreneurs. Anecdotally, many are feeling the pinch. Thankfully, we haven’t seen a significant negative impact on our unit economics and average revenues. We continue to keep a close (real-time) eye on the data to spot changes.
The Good…
As I mentioned in our last update, we’ve been able to recruit a strong team including David Kleiterp and Grace Legodi on the investment side, and solidifying our fundraising with our Private Capital Markets team — Caitlin Craig, Lundie Strom, Hippolyte d’Ursel, and Wangu Kariuki — developing and managing diverse sources of capital for our growth.
Over the last several months, we’ve grown the data team led by Olivier Herlem with data scientists and engineers, including Thomas Blanchet, Tapiwa Mlangeni, Yasser Kotrsi, Redhouane, Abdellaoui, and Nairobi-based interns Pauline Mweberi and Dorothy Akoth. The buildout of the data platform is one of the most important pieces for building our long-term enterprise value, so it’s great to see a strong team driving the development of our data platform.
Our success depends on maintaining a high-quality team, and I’m excited to continue to add strong members to the team.
The Personal Stuff, in case you’re still reading . . .
My (almost) 84-year-old father recently had emergency surgery due to a bilateral hematoma in his skull. I’ve been at the hospital overseeing his care for the last several weeks while doing my best to support my twin daughters at home. I’m happy to say, on this past Father’s Day, that he is over the worst and is making progress toward recovery.
I have tremendous appreciation for the Untapped team for being there to do their jobs so well in the last weeks. It’s a testament to the competence, professionalism, and commitment of the Untapped team that all continue to move smoothly while I’ve been attending to my personal life.
I was finally home again with Andrea, Lexi, and Tali two weekends ago for Father’s Day brunch. As I dropped them off at home, a white card dropped out of my daughter Tali’s back pocket, lying in the driveway. They were about to go to a friend’s bar mitzvah, so I thought it was just a card she drew for him. I picked it up and found this hand-drawn card for me:
Reading this card filled me with gratitude and suddenly moved me to tears. I’m truly privileged to have so much support — from my family, from my unwavering colleagues, and from investors and partners who share our vision for a more equitable future. Happy (belated!) Father’s Day from me, my dad, my family, and the rest of the Untapped team.
What I’m reading…
Venture Philanthropy: Data for good?
“Despite an explosion in new forms of data — like digital payment, social media, geospatial and call record data — most impact verification remains surprisingly analog. This is a pressing area of needed change…” Read more by Mondato
Private debt investment surges in Africa
“Private credit and infrastructure investments across African markets rose 118% to record levels in 2021, as borrowers looked beyond domestic risk averse banks…” Read more on African Business
Reimagining economic growth in Africa: Turning diversity into opportunity
“Africa is home to the world’s youngest and fastest-growing population, burgeoning cities, and bold innovations in everything from fintech to clean energy. With its population expected to nearly double to 2.5 billion people by 2050…” Read more on Mckinsey
Chat soon!
