00:00Let's just start with a lot of the uncertainty that has been permeating the markets right now.
00:05When it comes to your own investment strategy, how has the recent economic disruption affected your approach?
00:14I think it has affected in the sense that because it has affected valuations of technology companies,
00:20of course, the valuation of the businesses that we buy and sell reflect that uncertainty.
00:26And so, on one side, it makes it even more than already it is a buyer market.
00:33So, this is a time to invest, not a time to exit.
00:35The other thing is that, as you know, venture capital is a very long-term business.
00:40Our holding period is 5 to 10 years.
00:43So, this could be seen in a way as one of the largest but one more big disruption in the macros
00:50that tend to be fairly decoupled from what we do every day.
00:54So, it would be wrong to ignore it, but it has a short-term impact on the pricing of the investment
01:04and the valuation of the investment.
01:06But I think long-term, you know, demand for some, the fundamental investment eases on African technology doesn't change.
01:13It doesn't change.
01:15That's what I was going to ask you, whether or not the sentiment around investment into African technology has taken a hit.
01:22Have you seen that from your vantage point?
01:27No, we haven't.
01:28I think the fundamental driver of the attractiveness of global capital into, you know,
01:34exploring the upside of technology in Africa is that the fundamental issue in Africa is productivity.
01:39And obviously, technology is at the center of that.
01:42But, so, the fundamental thesis doesn't change.
01:48There is a cycle in venture capital in Africa that goes very much in sync with the rest of the world.
01:54So, last year, it was not the highest year in terms of volume of investment, but just like the rest of the world.
02:02But, you know, just to give you a sense, Africa is less than 1% of global venture capital, is 5% of global GDP, 18% of population.
02:12There's only one direction in which we expect the amount of investment to go, which is out.
02:17So, that's the fundamental thrust.
02:21Do you expect that trajectory upwards, though, to happen in 2025?
02:28Or could this be potentially a year, at least with venture capital in Africa, where it could stall a bit, just given a lot of the uncertainty?
02:37It's very possible that this could be a stall year.
02:39Of course, you know, when you see the $2 billion or $3 billion of annual investment, then there's a lot of movement if you have a more granular look in terms of specific themes that are growing and others that are less growing.
02:53Of course, the more capital-intensive opportunities are less attractive in this environment.
03:00But, you know, the high margin, the highly disruptive opportunities, the AI-related, the FinTech-related opportunities may actually go up.
03:11But the big picture, you're absolutely right, in the big scheme of thinking, somebody looked at this from Mars, 2025 may be a flat year.
03:18What are the risks then, Maurizio, when you take a look at, you know, many people talk about the risks of investing into, you know, startups more broadly, but in Africa, do you feel like the risks potentially are more pronounced right now?
03:38Look, the nature of the venture capital risk in Africa is a little bit different.
03:42The model is absolutely the same, and that any attempt of treating Africa differently is a disservice to the continent.
03:49But the amount of risk, the nature of the risk is quite different in the sense that we do not actually incur a lot of technology risk.
03:59The startups actually work on applying mostly existing technology.
04:04Most of the innovation is on the business model side.
04:07So entrepreneurs that try to redesign verticals that are broken or to reduce the cost to serve consumers, because, of course, in Africa, consumers do not have a lot of money on the demand side.
04:18Those risks are there and remain, but they are not increased by the tariffs or by the gyrations of the U.S. administration.
04:27So there is risk, but it doesn't increase because of the nature of the risk.
04:33So we're exposed to losing all of our money, just like every other year.
04:38But this is a fund-returning, unicorn-driven, outlier kind of business.
04:45So our job description is to look for those companies that actually would more than offset the high-risk bets that do not translate into commercial success.
04:54How do we start seeing more exits, though, happening, Maurizio, in your opinion?
05:02Because the focus a lot of times is on the raising and the initial part of startup building.
05:09But the exits are really not always the focal point.
05:13How do we get to a point where it is more about the exits and there is more progress on that front?
05:17Absolutely.
05:19The attention needs to shift from how much we're investing to how much we are generating in terms of value for global capital.
05:26Global capital needs to see evidence of returns in Africa to allocate more money.
05:31I think that, once again, when you move from a generic view into more specific, over the last four or five years, there have been a number of unicorns in Africa.
05:41And these have been investments of, you know, collectively, the dozen unicorns have up to $4 billion and they're worth $16 billion.
05:51There have been 20-plus exits of $100 million plus.
05:54And then there's this thing in the VC community that are called sunicorns, so potential unicorns with a measure in different ways.
06:03And also, the number is growing.
06:06It takes five to 10 years to actually generate companies that are really worth exiting.
06:13And so, we shouldn't compromise on value generation in terms of creating liquidity.
06:17When you look at the pipeline of companies that are growing and are qualifying progressively for exits, the picture is a lot more optimistic than what we've seen now.
06:26Once again, there have been exits.
06:28There have been valuable exits.
06:29But more along the way, when you just look at the fact that, you know, this was an industry where 10 years ago, they were investing $100 million a year in venture capital.
06:40Right now, we have around $2 billion to $3 billion, but it takes the time that it takes to create very valuable companies.
06:48The average 10-year holding period of a unicorn globally is seven to eight years.
06:54So, we cannot accelerate that.
06:57But you're absolutely right that it is our responsibility to show the world that investing in Africa VC is a good idea.
07:04And right now, we can show mostly great companies that are growing, but great companies and great investments are different concepts.
07:12So, we need to translate those great companies in liquidity and returns.
07:16And that is a priority for the ecosystem, definitely.
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