African startups are stronger together: What we learned hosting our first cross-continental African program
The Village Capital Africa team just just wrapped up our seventh investment-readiness program for early stage ventures in sub-Saharan Africa: FinTech Africa 2017, in partnership with the MasterCard Foundation and the DOEN Foundation.
Over the course of three workshops, we worked with eight fintech startups from East and West Africa working to improve financial health in their markets, and are investing in the two peer-selected companies: Piggybank.ng and Olivine Technology.
We did a few things differently this time around:
- We sourced applications from across sub-Saharan Africa to implement a cross-continental program. The objective was to expose Fintech entrepreneurs to their peers across Africa.
- We hosted the program in three different African hubs — Accra, Ghana; Nairobi, Kenya; and Lagos, Nigeria. The objective was to provide entrepreneurs the opportunity to work with investors, potential partners, customers and other stakeholders in new markets.
- We invited representatives from innovation hubs in francophone Africa to join each workshop as mentors. The objective was to foster learning and growth of entrepreneur support in that region.
Here’s what we learned.
1. Exposure to new markets is important — the earlier, the better
The typical venture capital investor defines “scale” as a potential $1B market, which means that (with a few exceptions) for venture businesses in Africa to scale, they will have to venture beyond their own borders to other African markets.
One concern we had about running a program in three different countries was that even if exposure to other markets is essential, we were providing this exposure too early in the game for our seed-stage ventures to be relevant. What we learned was quite the opposite: ventures that have scale potential should start planning for it now, even if they won’t (and shouldn’t) take action until achieving several other milestones first.
We also realized that early exposure to mentors from Francophone Africa can help bridge the divide between English speaking and French speaking Africa. Throughout the program, we had the pleasure of hosting Laissa Mouen, the head of an entrepreneur support program through Cofina Groupe in Senegal. Due to her incredible guidance and insights, an entrepreneur from Nigeria actually changed her expansion plans to include Francophone Africa, a region she hadn’t previously considered. When we as entrepreneur support organizations make an effort to work together more, and share best practices, we strengthen the bridge between these markets.
2. Investors in East and West Africa are very different
Our team is very familiar with the VC space in Nairobi. Nairobi has a lot of impact investors, foreign investors, and foreign aid that is increasingly directed towards impact startups. However, we had the opportunity to move westward and learn about a new market: Lagos. And, it couldn’t have been a better choice.
I was excited to see that Lagos has a number of active investors, which include Nigerian investors, as well as more and more Silicon Valley funds or offshoot funds hunting for deals, which we don’t see as much in Nairobi.
Thanks to the help we received from the Africa Business Angels Network and the Lagos Angels Network, 24 investors participated in our final investor forum, and they meant business. For the first time at a Village Capital program in Africa, an investor actually offered one of the entrepreneurs terms on the spot at our event (versus after or many months later)!
3. Entrepreneurs don’t just need investors, they need each other
At Village Capital, we invest in using a model called peer selection: we ask entrepreneurs to evaluate each other’s businesses. Through this process, the entrepreneurs provide each other feedback and constructive advice on ways to improve their businesses.
During this program, I continued to reflect on a recurring theme I’ve seen since beginning to work at Village Capital: the value of peer support. The value the entrepreneurs provide to one another is often the greatest takeaway from Village Capital programs. Because of the collaborative, community-oriented nature of the peer-selection model, entrepreneurs are provided a unique environment to meet like-minded innovators, and learn from each other.
Curating a cohort of high-potential, non-competitive entrepreneurs in the same sector is a recipe for partnership. Every Village Capital program I have run has resulted in one or more official partnerships after the program, and at the very least — long-lasting support networks.
Entrepreneurship is a lonely road, and support networks offer tangible benefits. Bernie Akpiriaye, founder of Matontine, highlighted that being part of the cohort was the best part of the process
“It was just amazing meeting so many talented people. Sometimes in your own little corner, you think you’re the only one going through these hardships, you think you’re the only one who’s that brilliant, so it’s fantastic to see other people who are just as driven as you, just as visionary as you. The cohort of people, the entrepreneurs, have been the biggest thing for me.”
What’s Next for Village Capital’s Africa Practice?
Sadly, this is my last post as Village Capital’s Regional Manager for sub-Saharan Africa. I’ve had a great time expanding our practice here and meeting so many brilliant innovators dedicated to changing the status quo. There are exciting roads ahead for both me and Village Capital’s Africa practice! Stay tuned for more from both.
If you’d like to learn more about Village Capital’s work in emerging markets, e-mail Heather Strachan, Manager for Emerging Markets Operations and Product at Village Capital, at email@example.com.