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A new generation of African founders has moved beyond proving the market exists, yet the capital structures financing their growth still largely originate in the West, bringing return expectations, fund timelines, and risk appetites that weren't designed for African market realities. This panel examines what building and funding durable businesses actually looks like in 2026: which sectors are generating real returns, how founders are navigating capital efficiency where patient local capital remains scarce, how exit pathways are evolving, and what the maturation of local ecosystem builders tells us about a continent that is increasingly writing its own next chapter.
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00:00Hello, hello, hello, hello. Give me the round of applause that will warm up the room, please.
00:06Thank you so much. Ladies and gentlemen, good afternoon, good morning, good evening, wherever
00:13you are. And for those of you watching us online, you're very welcome. My name is Anita Erskine. I
00:18come from the beautiful West African country of Ghana. So of course, this conversation is
00:23primarily coming from my heart, but I'm speaking to extraordinary Pan-African global
00:29individuals, panelists today. The conversation is about after the hype cycle, why African
00:36Tech's next chapter demands a different playbook, a different way of approaching our conversation,
00:42a different way of looking at the continent, not as one country, but as 54 individual states
00:47with a plethora of culture, but specifically different kinds of ways of doing business.
00:52My panelists are Yahya Houri, who is the CEO of Flat Six Labs, one of the Middle East and
00:59North Africa region's leading startup accelerators and seed investors. Yahya, let me hear your
01:04voice. Let me make sure that the microphone works.
01:07This thing, this thing. Thank you.
01:09All right. Zach George is a co-founder and managing partner of Launch Africa Ventures, one
01:15of Africa's most active early stage venture funds. And a respected voice on venture capital.
01:22Zach, how are you?
01:23Very good. And thank you for having us here today.
01:25Wonderful. And last but not the least, Marie Benrubi is a senior associate of Park Tech
01:30Africa, one of Africa's premier growth stage investors with a front row seat to the capital,
01:37the sectors and companies driving the continent's next phase of innovation and growth.
01:43Marie, bienvenue.
01:45Thanks, Anita.
01:46All right. So ladies and gentlemen, the microphones are working. The room is warm enough for us to
01:50have this very powerful global African conversation. We're starting off with this, you know,
01:56the view, you know, the late 90s. If you're as old as I am, you would have heard of Africa
02:01rising,
02:01you know, and specifically talking about the promise of Africa with Africa's investor community
02:07growing, with Africa's innovation growing, with Africa's economic transformation happening.
02:12Now, let's bring it to 2026. I don't say Africa's rising. I say Africa has risen.
02:18Would you agree with me as far as looking at how the innovation and venture ecosystem today is doing?
02:26Zach, starting off with you.
02:27I think, I mean, the context is very important. I mean, when I first came to Africa 15 years ago,
02:34there was the concept of venture capital didn't even exist. I mean, the first real pea shoots
02:40of venture capital happened in 2015 with the birth of accelerators like Startup Bootcamp,
02:45which I co-founded together with Techstars, Plug and Play, etc. There was about $100 million of
02:52venture capital annually from 2015 onwards. So from a context perspective, that's, you know,
02:57three deals in San Francisco on a random Tuesday morning. And that was the total venture capital on
03:03the whole of Africa in 2015. And if you fast forward to last year, that number was almost $6 billion.
03:11Right. So we've grown from a small base. But if you look at the acceleration of venture capital,
03:15and that includes venture debt, Africa is probably one of the fastest growing regions for venture
03:20capital. We are about five to seven years behind Southeast Asia and Latin America. But if you were
03:26to take that five to seven year differential out, we're actually batting on a much higher average
03:31compared to other markets. And the one thing I will say is a large part of that is driven by
03:37the very powerful, almost oligopolies that retail firms, insurance companies, banks and telcos have.
03:47And they are getting increasingly aware that they have to partner with startups to grow the ecosystem.
03:52And that's the fruits of what we've seen.
03:54All right. Thank you very much, Zach. Marie, Zach paints a picture of prosperity and things happening.
03:59What about you? What's your narrative?
04:01No, I agree. And to his point on the timeline, it's very important because as he's saying,
04:07like our ecosystem is barely 10 years old. And within those 10 years, we have seen a number of
04:13companies getting to $100 million in AR. Even this year, we're about to see the first startups
04:20crossing $1 billion in revenue, in annual revenue. And that's amazing. I mean, those companies are making
04:26100 million in net profit. They keep growing at 30%, 40% year on year. They keep executing.
04:34And that's like where lies the quality of an ecosystem. It's in its ability to produce this
04:39kind of outcomes. What's next now is that we need more of those. And we need, I think, more investments
04:49at the very, very early stages to keep building the reservoir and the pool of these companies.
04:56And we need more pre-seed and seed funds to do that. But we don't need two or three more.
05:01We need 10x more.
05:03A lot more. Yahya, are you singing the same song of praise?
05:07So, I echo both of my panelists. But to use your own image of, you know, Africa has risen.
05:13And I think Africa has risen, had its first coffee, went about its morning errands. But then now we're
05:21about like the mid-morning kind of little dip where you need your second coffee. You know, you're already
05:26challenged by all the problems that you had early morning. And you're like, I still have the rest of the
05:30day to go through. So, we're definitely there. But there's so many challenges that, you know, I'd love to
05:36talk about that. I think people don't necessarily are not able to measure to their right, you know, to
05:43their right strength, where we need to also see how we can collectively palliate these challenges so we
05:49can make it through the morning.
05:51Fantastic. Well, coffee is a good thing, but too much of it can also give you the jitters. So, hey,
05:55you know, a little bit of this and a little bit of that. Let's bring it down to you, Zach.
05:59I want to
06:00talk about capital structures, you know, of course, and LP dynamics. Our African fund
06:05managers still adapting themselves to fit global capital structures? Are LPs finally
06:12understanding and, you know, adapting to the African narrative being different?
06:18I love that you asked that to me because we, as a funder, one of the most, dare I say,
06:23controversial funds. Most of the early investors in African venture capital, if you look at 2015
06:29as one of the earliest vintages, were funded by DFIs. We are a specialist seed stage fund and a
06:38pre-seed, seed and pre-series A fund. So, we were looking for strategic capital that could add value
06:44above and beyond just money. So, when you're a founder that's building, you know, a fintech,
06:49an edtech, a health tech or whatever, you need a lot more than money. You need access to banks,
06:54insurance companies, telcos, actual POCs and pilots. You need help with recruiting, with cross-border
07:00expansion, with media exposure. So, as a fund, we made sure that our LP base reflected that.
07:07So, most of our LPs, almost 90% of them are family offices, fund of funds, individuals, CFCs,
07:15CBCs, sorry, that have links to industry. And that's what founders need the most. So,
07:20we were one of the only funds in Africa, as far as we're aware of, that manages more than $50
07:25million of AUM without a single dollar from a DFI. And we allow all our LPs to co-invest with
07:32us
07:32directly in these companies. So, founders aren't spending six months of the year fundraising
07:37when our LPs can do that for them. So, it's horses for courses. You need to adapt accordingly.
07:43As you get to Series B and Series C, it's a different story. Founders don't need that much
07:48hand-holding, but you need to have enough in the funnel to get you to that point. And I think
07:54that's
07:54an important change that we brought to the African ecosystem.
07:57That's a powerful change. Marie, let's look forward to the next decade, the next 10 years
08:05of African innovation. Assuming it were financed increasingly by African capital, what becomes
08:12possible, perhaps, that today's LPs cannot see in the short term?
08:18I think, to be fair, I don't, personally, I don't think that current LP structures are preventing us
08:24from financing African innovation in any sort of way. At the, like, very differently from
08:31Zach and Launch, we have a lot, at Partec, we have a lot of DFIs funding us. And at the
08:37end
08:37of the day, the best LPs, whether they're, like, either they're local or global, understand
08:43that venture returns take decades. And it's because fund returners are going to have the
08:49most impact at the end of this decade, because that's when the compounding effect is the most
08:55efficient. And so they know that GPs to succeed are going to need flexibility, and they're going to need
09:03flexibility in timing, in the type of investments that they make, depending on where you are in the cycle.
09:08And we're very lucky to have LPs that understand that. Now we can discuss about, like, indeed, what will
09:15African capital allocators bring to the table? Because, indeed, I think that, like, African
09:22corporates are now a major contributor to fundraising on the continent. I think the number is, like,
09:28from 2022 to 2024, it was something like 7% of the market, in terms of commits. And last year,
09:34it was 41%. And so what do we need from those guys? I think we need two things. We need
09:41smaller
09:42tickets. As I was saying, we need, like, entry investment, pre-seed funds to build a pool of
09:50companies. The issue is that over the past few years, we've seen a lot of pre-seed and seed funds
09:56struggling to raise. And some of them went to the later stages because they wanted to raise from
10:02global LPs, maybe because they were not finding the right source of capital locally, for some of
10:08them. And, yeah, so we need, we need definitely more funding at that stage. Second thing that we
10:16need is local denominated debt funds to fund models that are very working capital and capex
10:26intensive that are not meant to be financed by equity. And I think now it's also time for the
10:31ecosystem to get those new types of models and those new instruments that we need to grow.
10:37Yahya, for you, I'm going to guess that being at the forefront of being, you know, close to
10:43startups, you know, the way you are, gives you a special high every single morning and some
10:49excitement. But tell us, what kinds of businesses truly that you're seeing are you most excited
10:55about in the next cycle?
10:58So maybe to loop the conversation back in, you know, Zach had mentioned that the story
11:03of the continents, you know, innovation and venture capital world started with external entities
11:09coming in. And I think for the first few years, we saw a lot of like, you know, like Facebook
11:16-like
11:16and e-commerce-like and whatever, you know, so we were trying to replicate and that's fine. I think that's
11:20not a bad thing to start with. But now what we see is that the ones who are most successful
11:26are the
11:26ones who, you know, who are really grassroots, who see and are able to identify truly local
11:31problems, local challenges don't exist anywhere else, whether it's related to fintech or agri-tech
11:36or logistics tech or health tech, and are able to actually find a solution that is cost effective
11:42and that is sustainable. And so more and more what we see is that, you know, these guys are the
11:49ones
11:49that, you know, I would like to see succeed. And a few years ago, a lot of these, especially the
11:55ones
11:55that have a bit of a social impact were dependent on grant funding. So USAID collapsed, you know, a few
12:01others are, you know, reducing, but not collapsing yet. And so it actually forced them to go into the
12:07more sustainable, more simple business model, which is a very good news, actually, because that
12:12actually allows them to scale up without being dependent on anybody. And so those are the ones
12:17that are going to be succeeding. And if I was to predict in the next five years, the ones who
12:21actually focus on true local challenges are the ones that are going to be able to first scale to
12:26other countries because we have similar challenges, but not the same. But second, we'll also be able to
12:31attract investment to grow further. But, you know, from where you said agri-tech, health tech,
12:36you know, logistics, where is the capital going? Or perhaps, where should it go that it's not going?
12:44So, again, if we compare, you know, kind of the last few years with now, I mean, there was a
12:50big
12:50wave of funding that came in, you know, a few years ago. And so we saw a lot of our
12:55entrepreneurs kind
12:56of catering their businesses for investors, unfortunately. And so, you know, and I remember
13:02conversations with entrepreneurs a few years ago, where they're like, you know, I'm just working on my
13:06next fundraiser. I'm like, why don't you work on your damn business? You know, like, you should actually
13:10work on your business model, work on your, you know, on your revenue and your, you know, on how to
13:15make
13:15things scalable and more effective instead of just working on making it look pretty for the next investor.
13:20And so, you know, I think that the ones where I would like to see it is really the ones
13:25who are truly
13:26working on kind of getting more, becoming more profitable, more revenue generating, and more impactful
13:31on their local communities. Well, I think sometimes also trying to make an investor happy is also
13:36talking about making sure that investors can answer where the next exits are, really, essentially. So
13:43there's a bit of a push and pull sometimes. Zach, and I bring it to you, are investors still asking
13:47this
13:47question? And if they are in 2026, where are the exits? Yeah, I mean, I think a lot of founders
13:53forget
13:54that when they take money from a fund that they actually have, you know, a need to return it,
13:59right? A lot of funders look at investors. Sadly, we've all experienced this as, as ATMs, but we're
14:06not. So it's very important for investors also to be upfront when they communicate with founders. So
14:12we, we have 180 investments across 25 African countries, and it's quite, quite a challenge to
14:20manage so many investments, right? So the way we look at it is when you're in markets like India 15
14:26years
14:26ago, or Southeast Asia, seven, eight years ago, or Africa, you can't run a VC fund, like a classic
14:32Silicon Valley VC fund, where you ignore 80% of your portfolio, you write them off in your head, and
14:38you pay
14:39all your attention to the 20% that you're hoping to God that they can pay back your entire fund,
14:45right? So
14:45you're chasing unicorns. What needs to happen in less mature markets is you focus on portfolio
14:52optimization. So really good fund managers are managers who can make money off of average
14:59companies. So if you look at the bell curve, the big middle chunk, companies, we call them steady
15:05eddies that are doing 10%, 20% growth, quarter on quarter, that may not give you a 20 or a
15:1150x,
15:12but will give you a 3x or a 4x. Instead of ignoring those companies, try to do partial secondaries,
15:18management buyouts, trade sales. We just two days ago made a big announcement where we sold
15:25our stakes in 11 of our portfolio companies and returned $2.5 million to our LPs at the end of
15:31year five. That is better than the top quartile of US venture funds of that vintage 2020. So it's
15:39important to return capital to your LPs to make sure that there's enough money that's recycled in the
15:46ecosystem. Because what happens in mature ecosystems, founders have exits, they invest in other founders
15:52that goes and creates enough conviction that later stage funds like Bartek, etc., can fund companies
16:01coming through that factory. But if there's no recycling of capital, at some point, the tide's going
16:08to come out and people are going to be swimming with no clothes. So exits are extremely important.
16:13And there are multiple ways of exiting. It just doesn't have to be, you know, a path to an IP
16:18or
16:18a trade sale. There are lots of management buyouts happening, lots of securitization of portfolios,
16:26secondaries, private equity funds are looking at getting into early stage assets. So you have to be
16:30creative in the way you create liquidity for a VC fund.
16:33Zach, I'm so happy that you're talking about the different kinds of exits. And Marie, perhaps I bring you
16:37into the conversation on the different types. What really works for African startups?
16:42What kind of exit pathways?
16:44Sure. I mean, we're still working on it. So I don't have like a definite answer and a magic solution
16:51on that topic. But I guess if you take a step back, right, globally, most exits happened by M&A.
16:58In the US, 50% of the exit market is M&A in deal value. The rest is in between
17:07public market and secondary
17:09market, depending if the public market is open or not. In Africa, that number, the share of M&A,
17:18the share of M&A is closer to 70% historically. And we expect this to continue over time because
17:27the reality is that there's not yet a true secondary market on the continent.
17:31There's no institutional secondary fund. And IPO markets are very thin outside of SA. And it's going to take them
17:40a lot of time to mature.
17:43But within the M&A markets, we've been seeing a number of trends, right? So back in 2021, 2022, you
17:52had a few global players that were coming to Africa to acquire large startups and deploying very large amounts to
18:00do so.
18:00It was the case of World Remit with SendWave, Biotech with InstaDeep, Stripe and Paystack. There's a clear slowdown in
18:13this activity for several reasons.
18:16First, US companies are focusing more on core market growth and like going deeper in the US market.
18:25Second, the main reason to acquire, I mean, most of the time, companies are going to acquire pre-IPO because
18:32they won't scale.
18:34In a global context where IPO markets is mostly closed, there's no more rationale to acquire African companies.
18:42And third, there's been a lot of local currency devaluations. And so there's less of an incentive to spend your
18:49dollar for local currency returns in the long term.
18:52So all in all, like what we're seeing most these days is local M&A operations from banks that are
19:02acquiring fintechs.
19:03It's been the case with NetBank and ISOCA in South Africa with KCB and PESAPAL in Kenya.
19:12We also see larger startups acquiring small startups. So it was a case of OmniRetail with Traction and Orda.
19:21So usually like subscale companies are getting acquired by larger scale ones that are more likely to raise capital.
19:29So that's for the M&A side. Outside of M&A, I think we're also very optimistic on IPO markets.
19:37There's been like a few recent events that are showing that local IPOs are more and more of a route
19:43to a route for exits.
19:45You have Optasia that showed that you could be a global company and go to JSC to list.
19:51And so it's now a pathway to exit for non-South African companies.
19:56And the other one is Cash Plus in Morocco.
20:01Yeah, that's like it's a single country company from a non-tier 4 country market that is listing at more
20:10than 500 million.
20:11So all of these are very good signs for local IPOs.
20:14And finally, secondaries, as Zach was saying, we're expecting to see more and more, both from seed funds that are
20:22selling stakes to series A&B funds.
20:25On our second fund, every transaction that we've done, there's been a secondary element to it.
20:32And also larger stage companies.
20:36And that's what we've seen with MoneyPoint and DPI, for example.
20:40Well, Yahya, then I'm going to use you to go into the engine room, the minds and, you know, of
20:44our African startups, of our startup ecosystem.
20:48From what Zach and Marie have described, what would you say Africa's exit challenge is?
20:54Is it about the market structure?
20:56Is it about the reason entrepreneurs are building businesses or how they're building businesses?
21:03So, obviously, the answer is it's a bit of both.
21:06But the true reality is that, you know, we need our own exit strategies.
21:10And so, you know, in the U.S. or in Silicon Valley, there's a lot of noise.
21:14So you need to be unicorn level in order to stand out.
21:18You know, like they both mentioned, like you don't actually need, you don't have to depend on unicorns in the
21:25African ecosystem for it to, you know, to show that there's success.
21:30I mean, Mary mentioned Insta Deep, who's a, you know, unicorn out of Tunisia.
21:34But, you know, nobody mentions all the other ones who are not unicorn.
21:38You know, you have Expansia that did really great.
21:41You have What Now is actually sitting in the room, you know.
21:43He's going to be a future unicorn one day.
21:45I know it.
21:46You have GoMyCode, who's in, I don't know, like 10, 12 countries across Africa, is dealing with edtech.
21:52And so, by focusing, you know, like they both mentioned, by focusing on, you know, different levers for exits.
21:58And without taking the playbook of Silicon Valley, that's where we'll be able to really, truly, you know, draw our,
22:06like, you know, make our mark on the global ecosystem.
22:10That's kind of on the infrastructure, you know, framework phase.
22:14On the other side is that, again, we need entrepreneurs who are less dependent on external funding.
22:21That's one.
22:22I loved your statistic on, you know, kind of the corporates investing more.
22:27Now, I don't know if they're actually investing more or the others are investing less, so their proportion increased.
22:32But still, you know, it's a new thing for us.
22:36You know, a lot of the private sector, you know, a lot of our system was dominated by DFIs, which
22:41is not a bad thing.
22:42And we do need them, and we did need them before, and we will need them after.
22:46But the whole point is they're supposed to kind of, you know, help us create some leverage to bring in
22:52other, you know, more locally-based sources of funding and, again, more localized structures of funding in order to truly
23:00fit the models that we need in order to grow.
23:02But, Yeha, talking about – go ahead.
23:04I just want to add some – I mean, numbers don't lie.
23:07I mean, opinions are great, but facts are better, right?
23:09So, to both of their points, if you just look at the number of exits in the African tech ecosystem
23:15in just the last six years, since 2020, there have been more than 220 exits M&A.
23:23Most of it is corporate M&A in the last six years.
23:27So, if you look at the size of venture capital in Africa, exits as a percentage of the amount of
23:34venture capital funding is higher than any place on planet Earth.
23:39For five to six billion dollars of venture capital, right, you're having 200-plus exits, right?
23:47Now, most of these exits are happening to corporate M&A, right, which what we would call vertical exits.
23:54But the sign of a maturing ecosystem is when you have, to Marie's point, horizontal M&A, so larger startups
24:01acquiring smaller startups.
24:03Why?
24:03Because they pay much better multiples of revenue.
24:07So, for example, a net bank acquiring ECOCA, which is a POS system, good acquisition but very low multiple.
24:15So, you have a lot of corporate M&A, but the really good M&A is when you have horizontal
24:20M&A.
24:21And that's been happening a lot more in Africa.
24:23I mean, like I said, more than 200 exits in the last six years is not a joke.
24:27But unfortunately, people outside of Africa don't hear about this.
24:31So, when you have platforms like this in VivaTech, it's great to get people in the, you know, in the
24:36audience and online learning about the huge amount of liquidity that is present today in Africa.
24:42Thank you very much, Zach.
24:44You've taken us back six years.
24:46So, perhaps, yeah, yeah, I'm going to take you back six years.
24:49You're mentioning something new.
24:50You know, Zach is talking, comparing the times.
24:54Take me back six years.
24:57What about entrepreneurs?
24:59How they're building businesses?
25:01Why they're building businesses?
25:03African entrepreneurs specifically shows you that the market is actually maturing in addition to what Zach has just talked about.
25:11So, now six years ago, you can't talk about a continent.
25:16You have to talk about individual countries.
25:17You know, Nigeria, South Africa, Kenya and Egypt were doing amazing.
25:22And so, I was the managing director of Flask Labs in Tunisia at the time.
25:25And I remember I was really jealous of my Egyptian colleagues because, you know, the entrepreneurs, and that was right
25:32before COVID, the entrepreneurs wouldn't have, you know, during the demo, they wouldn't have, you know, the time to get
25:36on stage and say, hi, my name is.
25:38Before the guy actually says Mohammed, he would get a million dollars, you know, full-on funding.
25:42I'm like, dude, we haven't even heard your pitch yet.
25:46You know, as opposed to other countries where, you know, they had a lot more challenges.
25:50And so, a lot of these, you know, these countries were actually doing really great.
25:55They, you know, I think they went through a lot of challenges.
25:58So, one, COVID, Egypt in particular, went through a very big devaluation.
26:03But we, of course, corrected.
26:05And I think, and now, like, we went through this correction, I think, across the board in most of our
26:10markets.
26:11A few other markets have also, you know, started to join them a little bit.
26:15And so, you know, you have Francophone Africa that's also starting to show some very good results.
26:19And so, it's, I feel like now it's more, you know, you have less of the, kind of, the headlines
26:25that we used to have.
26:26But there's a lot more, and it's a lot more widespread.
26:29And that's when, I feel like now we can talk about, you know, continental ecosystem growth.
26:34Before, we couldn't really talk about that.
26:36You know, I just have to say, Yahya, I'd be remiss if I didn't say this.
26:39I work on the Jack Ma Foundation's Africa's Business Heroes.
26:43Every year we see, you know, tens of thousands of applications coming in.
26:48And I side with what you're saying.
26:49Even from 2020 to now, 2027, you see the maturity in why they're building their businesses and what their businesses
26:55are solving.
26:56So, I agree with you 100%.
26:58But, Marie, perhaps I also want to play a little bit of a devil's advocate.
27:03You know, I always say, before you see the light, you've got to go through the darkness of the tunnel.
27:06What is it about African markets that investors continue to misunderstand?
27:15I think global investors, in later stage investors, still tend to put companies in a box.
27:23And so, for example, like, oh, you're building from Senegal.
27:27Sorry, your market is too small.
27:30Wave has proven otherwise.
27:33Or you're building from Africa, so you'll never be anything else than, like, an African company.
27:39And now look at Time Bank in South Africa, expanding to Southeast Asia.
27:45Look at TerraPay building global payment infrastructure.
27:49Or even Aura in South Africa that's taking, like, a South African expertise in the security sector and taking it
27:56to the UK, to the US.
27:58So, yeah, I think just, like, those, like, frameworks of limitation or preventing them, like, making them miss out on
28:06great opportunities.
28:07And sometimes even the dynamism of the markets.
28:10Yes, Zach, go ahead.
28:11I think it's also, I mean, to her point, a lot of non-Africa investors don't really, they try to
28:17find a comparable company in the US or Europe to benchmark an African company.
28:22So, the number of times we've had to explain to the likes of an Index or a Sequoia or an
28:27Accel to say, oh, so is this the Brex of Africa?
28:31Is this the Uber of Nigeria?
28:33Is this, I'm like, no, stop, stop, stop.
28:36You have to look and see what is relevant for the African country.
28:40We've got one and a half billion people with arguably the world's biggest purchasing power in the next 20 to
28:4730 years, right?
28:47Low cost of cell phones, low cost of data, youngest population, et cetera, et cetera, et cetera.
28:53So, if there's a unicorn in Africa called Money Point, right?
28:58Try explain Money Point to a US investor.
29:01Try.
29:02Money Point is basically the equivalent of human ATMs.
29:07Human beings are ATMs because they exchange electronic money for cash.
29:12It's an informal economy.
29:13Money Point has a ridiculous amount of revenue, close to half a billion dollars in revenue, and they are a
29:19unicorn.
29:20But all the Silicon Valley firms missed them because they couldn't understand what Money Point does, right?
29:26The problem is African founders have been so used to just pitching to US and European VCs that they have
29:34to tailor make what they do to fit what the investor wants.
29:38So, it's literally, to use an English phrase, the tail wags the dog or the cart drives the horse.
29:45Now, with the increase in domestic capital, so regional and pan-African funds, African founders are finally saying, we can
29:54do what we do based on our economics.
29:57Amazon has failed miserably in Africa.
29:59Why?
30:00Because most Africans pay with things on cash.
30:02Jumia, which is often called the Amazon of Africa, is, to this day, 90% cash on delivery, right?
30:09So, eventually, you're going to have international funds understand Africa and African tech founders for their demographics, their culture, their
30:20anthropology, and their markets.
30:22And that is happening as we speak.
30:24All right.
30:25Are there any African founders in the house?
30:27Just give me a round of applause.
30:30A round of applause.
30:31Any who are planning to start businesses in Africa?
30:35A round of applause.
30:37And any who have been to Africa and are thinking, I don't know if I'll survive.
30:41A round of applause.
30:42Silence.
30:43Beautiful.
30:44Now, let's come to this point where, you know, I've just asked the audience who they are and a little
30:50bit of speaking to them or speaking with them as we've been doing.
30:54Zach, if there were investors in the house today or online watching us, what would be your one, two, or
31:02let's say three crucial words or sentences of advice that you would give them?
31:09Investors who are looking at the continent and thinking, wow, I want to be part of that prosperity.
31:13Yeah, I mean, there are quite a few things you can talk about, but let's make it very high level.
31:18So, first of all, you've got to think, I know investors outside of Africa love to chase unicorns, and, you
31:23know, it's not just about unicorns.
31:25But if you focus just on the billion-dollar companies, Africa has had 16 unicorns in the last six years.
31:32Sixteen.
31:33That's a lot.
31:34Now, the average time it takes a U.S. company to get to unicorn status is around eight to 12
31:41years on average.
31:43The last few unicorns in Africa were minted in three to four years, half the time.
31:49Now, why do you think, even though it's a small sample size, I understand, why do you think African companies
31:55get to unicorn status quicker?
31:57It's because you use technology as a means to solve real-world problems and not nice to have problems.
32:05I often give the example, I got my MBA from Stanford 25 years ago, and there was a company in
32:11San Francisco that raised almost $20 million in Series A funding to build drones to deliver organic smoothies to high
32:22-rise businesses on Market Street.
32:24It's because it was a nice thing for the CEOs to say, oh, I'm going to use an IoT device,
32:28open my windows, have the drone delivered to our board meeting, and I can impress all my colleagues and pay
32:33$50 for a juice.
32:35Now, if you could use that technology to deliver ARVs in parts of the world that healthcare was inaccessible, that's
32:42a sticky revenue.
32:45So, the reason why African startups perform really well and get to unicorn status quickly is because when you find
32:51perfect product market fit, that revenue is sticky.
32:55And I think that is what a lot of funds outside of Africa don't really understand.
33:00And that's something I would encourage international investors to do a little bit more research on the continent.
33:07And the second thing is B2C business models don't work that easy in Africa compared to B2B.
33:15In Africa, the vast majority of billion-dollar companies or even half-a-billion-dollar companies have clear distribution partnerships
33:24with insurers, telcos, banks, and retailers.
33:28So, you really have to solve a problem for the large conglomerates in Africa and then acquire customers through them.
33:36And that's something that you only understand if you're on the continent.
33:40I like that.
33:41Marie, what about you?
33:42Your words of advice to potential investors?
33:45I think do your research and go to the ground because you need to understand each market in its singularity.
33:56And because the entry points, what a good outcome means, is not going to be the same from one market
34:03to another.
34:03And so, you need to adapt your investment thesis to each market individually.
34:09And you need to be able to invest with new ones.
34:12And that doesn't mean like, oh, if you haven't been to the ground, you're not going to be able to
34:16do it and be relevant.
34:18If you also can and you should surround yourself with local investors that are going to be the one helping
34:26you understand local ecosystems.
34:28All right.
34:29Yeah, yeah.
34:29The question is not so easy for you because I like to look at you as the voice of entrepreneurs
34:34and the voice of the startup ecosystem on this panel.
34:37A big responsibility.
34:38A big responsibility.
34:39So, you've got two things to do for me.
34:40One, words of advice.
34:42I like how you said mind your business.
34:44But words of advice to startups, to founders who feel like they need to polish up so that they can
34:48kind of look attractive for global investors.
34:51And then, like Zach and Marie, your words of advice to investors.
34:57So, to the entrepreneurs in the room, you know, I think really, you know, all of you who are in
35:03the continent, just look at the challenges that you already have.
35:06And really try to, you know, to solve them the most cost-sufficient way possible.
35:12You don't have to say that you're AI enabled.
35:13Just use AI to, you know, to lower your costs.
35:15And that should be sufficient.
35:17You know, that should do the trick.
35:20But also, don't think local.
35:21Always think, you know, regional, continental, and then, after that, global.
35:27Get the best people with you on the team.
35:29I think that goes without saying because, you know, without them, you won't be able to do anything.
35:34Those who have, you know, a million AI agents won't replace, you know, somebody who truly understands the challenges like
35:38you do.
35:40For the investors, you know, and I totally agree with, I would have to echo, you know, Mary's point of
35:46view, which is, you know, go and, you know, try different countries.
35:49And try to experience some of the challenges, you know, get stuck in traffic in, you know, in Kenya.
35:57Try to get something delivered in Cairo.
36:00And, you know, have, you know, try to check out the healthcare system in Nigeria.
36:04And if you actually, you know, try to truly experience these challenges, then you see how the solutions were so
36:10incredibly innovative in order to actually be able to palliate to these challenges and help the entrepreneurs really kind of,
36:17you know, make their business scalable and in the most cost-efficient way possible.
36:21Thank you very much.
36:22Well, ladies and gentlemen, for those of you joining us online, for years, the question was whether Africa could really
36:29grow or inspire or produce world-class startups.
36:32Well, now we know that the continent can.
36:35But the question is, how do we move from the hype to maturity?
36:38And I believe that my panelists have answered those questions.
36:41Of course, there's more for you to answer.
36:42Find each and every one of them on the Viva Tech app if you want to extend and, you know,
36:46have this conversation more extensively.
36:49Ladies and gentlemen, I've had Yehia Huri, who is the CEO of Flat6 Labs.
36:54Yehia, thank you very much.
36:55I've had Marie Benrubi, Senior Associate at Partech Africa.
36:59Thank you very much, Marie.
37:00Last but not the least, I've had Zach George, Co-Founder and Managing Partner of Launch Africa Ventures.
37:06To you, ladies and gentlemen, my name is Anita Erskine.
37:09We'll see you on the next stage.
37:10Have a great afternoon.
37:11Thank you all.
37:12Thank you, Anita.
37:13Thanks, Anita.
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