Untapped Insights
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Untapped Insights

September 2022 Newsletter: Let the Untapped roadshow begin!

This newsletter was originally sent to The Untapped network on Tuesday, September13th. To subscribe for future updates please click here

Good morning, good afternoon, and good evening!

TL;DR…

📈 Grew an average of 14% month-over-month over the last 3 months

🏍 Added over 2,500 entrepreneurs/assets in the last 3 months, reaching over 9,200 entrepreneurs supported

🇲🇱 Had a default in Mali, raising our default rate to 1.82%, but still well under the 17% default rate threshold for any Noteholders to be impacted.

💰 Kicking off our institutional fundraise this month and would appreciate intros to great investors you know! More below on what we’re looking for.

💻 Online investment platform is up and running! We’re currently accepting investments as low as $300 from accredited investors. Get started here.

Why we invest in Africa

Bumped into Boum III Jr from Daba Finance in Vatican City!

Last week, I was in Vatican City to be a guest judge on the “Meet the Drapers” TV show with Tim Draper and family. We heard from seven African finalists pitching their startups in an upcoming ‘Africa episode,’ including Tinashe Rizane from Flexclub (one of our Operating Partners!), and Boum III Jr. from Daba Finance.

Aside from the tropics-like heat and mosquitos in the Vatican, what struck me was the quality of entrepreneurs working in Africa who pitched at the event, and that most of their businesses were truly transformative, i.e. they were “0-to-1” businesses that aren’t just incrementally innovating, but are driving or capitalizing on dramatic shifts in the economy.

The digitization of what were previously informal markets and the potential to quickly move from analog peer-to-peer economies to digital peer-to-peer transactions offers an exciting leapfrog opportunity. Smart Asset Financing — our investment model that captures high-yield, short-term returns that traditional debt and venture capital can’t — targets businesses driving this transformation.

0-to-1 businesses, the upside they offer, and the potential for transformative impact are why I personally have gone “all in” on investing in emerging markets — and in Africa in particular — and now have over 100 African companies in my portfolio!

August by the numbers…

$307,211: Revenues for the month of August. Revenue in the last 3 months has grown by an average of 14% month-to-month growth. We anticipate continued modest growth in the next few months.

9,220: Number of assets we are currently financing — we added over 156 entrepreneurs/assets since last month and a total of over 2,500 in the last 3 months with new deployments in several markets.

82%: Our default rate, up due to a pilot in Mali defaulting. For any of our Note holders to be affected, the default rate would need to exceed 17% (for Junior Noteholders; or 34% for Senior Noteholders). Country risk is a major risk factor investing in Africa and this is why diversification is so important for safely investing in Africa. If there is a problem in one country, it is mitigated by the fact that it is balanced by the returns from other markets.

Asks…

1. We are kicking off our institutional fundraise this month! We appreciate the importance of having the right investors on board, and we would appreciate intros to great investors you know. The right investors for Untapped are ones who:

  • Appreciate the potential of emerging markets and see a key role for data and new ways of underwriting to unlock untapped markets
  • May be or may have links to capital allocators that are comfortable with exposure to alternative assets and/or emerging markets or are actively investing in web3 for real-world assets
  • Are well respected in their areas of expertise
  • Above all, they should share the vision of innovating the finance sector to include more small businesses and emerging markets because it will unlock opportunity and create shared prosperity that makes a fairer world.

If you know of investors that fit any of the criteria above, please send them my way at jim@untapped-global.com.

2. Our team will be traveling a lot the next three months. Reach out if you’ll be in:

  • New York — September 19–23
  • Accra — September 27–29
  • London — October 10–12
  • Cape Town — November 12–26
  • Washington D.C. — December 12–16

3. Our Pilot Operating Partner, PayGas, is raising their Series A! PayGas is a pay-as-you-go LPG refill company based in South Africa. Their target of $5.6M will ​​enable PayGas to accelerate its growth across the country through partnerships with Shoprite and Pick N Pay. For more information reach out to Philippe at philippe.hoeblich@paygas.africa.

Untapped Insights…

Dream VC x Uncap x Untapped talk ‘Alternative investment models for emerging markets’

We recently had a conversation about the potential of alternative investment models in Africa, if revenue-based financing can be combined with traditional VC, emerging trends and more

What I’m reading…

Electric batteries are fueling the shift from petrol-powered bikes in Kenya

At e-mobility startup Roam’s assembly plant in Nairobi, an engineer tests a new electric battery he has just designed. He mounts the battery on one of the waiting bikes… Read more on Quartz Africa

Africa’s hidden growth opportunity: betting on venture debt

Growing up in Nairobi, I have witnessed how a lack of access to finance stifles economic growth. What role is there for entrepreneurial finance to address this gap?… Read more from Stephen Muriithi

Technology now contributes more than oil to Nigeria’s GDP

According to the recent Gross Domestic Product (GDP) report by the National Bureau of Statistics, the information and communications technology (ICT) sector contributed 18.44% to Nigeria’s GDP in the second quarter of 2022… Read more on TechCabal

Til next month, keep well!
- Jim

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Untapped Global

Untapped Global

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Untapped creates opportunity by connecting frontier market innovators to global investors.