Startups – if You’re Not African It is Time to Fund the Future

It is Time to Fund the Future

By Iyinolowa Aboyeji

Welcome to the Future!

I know that sounds like a really odd way to greet you all given the current wave of fear, uncertainty and doubt but look beyond all of that for a moment. The future we have always imagined is unfolding right before our eyes. Zoom isn't the sound of a car leaving for work in the morning but the name of another critical tool for getting to work. Instagram Live is television except this time we can actually chat live with everyone else watching the show from Michelle Obama to Usher. E-commerce is not a nice to have subset of commerce but all of it. I'm no longer the crazy black guy investing in molecular lab diagnostics (www.54gene.com), my government is in on it too (https://nipc.gov.ng/2020/04/07/ncdc-nigeria-toget-four-additional-testing-labs). If even two months ago you showed me the world we woke up in today, I'd be asking you who's your dope dealer. But here we are.

At Future Africa, we partner with innovators turning our continent's most difficult challenges into global business opportunities. We believe that by empowering innovators with capital, coaching and community, it is possible to build an African future where p r o s p e r i t y and purpose is within everyone's reach. Even though we didn't see all of this coming, it feels like we were preparing for this moment. S o m e

investors - even traditional venture capitalists whose one job is investing in innovators - believe this is the worst time to invest in innovators. We disagree. Although I am pretty sure they are in the wrong business, I can understand their fear. Startups are small and risky. In a recession, perhaps even more so. There are no lofty valuations to chase or scores of investors writing checks to the next unicorn. Heck - many startups should be lucky to stay alive. Yet we believe that there is no better time to invest in innovators building the clear and present future we have just been accelerated into.

I say this only because I have lived this.

Andela and Flutterwave - our best performing portfolio companies have one thing in common - they were both founded in the middle of grave economic recessions and a health pandemic just like this one. We remember putting Andela's second class of intakes through a boot-camp right in the middle of the Ebola crisis. Flutterwave, on the other hand, was raising its seed round as the Naira was tanking and 40% of commercial bank deposits disappeared overnight to the Central Bank's treasury single account. Despite the turbulence, both companies delivered us triple-digit IRRs and cemented our reputation as the hit-makers of Africa's tech industry. Again, there is no time like the present to invest in African innovators turning our myriad of oncoming challenges into global business opportunities.

However, it takes an experienced operator to land a plane in the midst of a storm. Since we began investing as angels in the Nigerian financial markets downturn of 2015, we've deployed $1.5 million dollars of our own money across 19 companies including some of Africa's fastest-growing tech startups such as Andela, Flutterwave, 54Gene, Kobo360, MAX, Stem Cafe, Eden, and Lori Systems, amongst several others. In that time we have grown our portfolio 8x to $12m in assets under management with an IRR of 51.6%, our startups have accumulated $1.2 billion in company value, gone on to raise $300 million in follow-on capital, made $120 million in annual revenue, and created 3,000 direct jobs and 12,000 indirect jobs. That said, we know that our past results are not indicators of future returns and venture investing is a very risky proposition where you should only invest what you afford to lose. However your chances of successfully funding the future increase when you work with experienced partners like us who have been here before - building the future in good times and bad.

You see, before the crisis hit we too thought about playing the traditional venture capital game. Hire our own grey-haired investment banker who knows the limited partners. Raise a big fund and sit easy on a pile of fees as we hand over our hardwon judgement and experience to bureaucracy and investment committees far from the madness we are innovating in. We too wanted to settle. But when the crisis hit, we naturally dove into action supporting our portfolio companies to respond appropriately. As we watched the traditional venture capitalists entrusted with the responsibility of funding the innovators that will get us through this crisis drop the ball on one innovator after another on account of scared Limited Partners and restrictive investment committees, we knew that couldn't be us. So we decided to focus our energy on innovating a new way to fund innovators through this pivotal moment of crisis and opportunity.

This is why today we are excited to announce the Future Africa Collective - our people-powered innovation fund that allows you co-invest with us. The Future Africa Collective offers qualified investors who apply and are admitted an opportunity to co-invest with us on a deal-by-deal basis through investment syndicates. While we source and run diligence on innovators, the entire process for each deal is managed on your behalf by a globally renowned and trusted institutional fund partner based in the US.

In exchange for your capital, an annual subscription fee and a reasonable carry for the Future Africa team, you receive an opportunity to invest in groundbreaking innovators building the future today.

We need you, our community, to partner with us as we fund the next Andelas and Flutterwaves through this health and economic crisis. Like you, we believe that especially as far as Africa is concerned, capital is not just a tool for creating and preserving wealth, it is also a weapon of innovation and revolution.

As we stand at the precipice of this perfect storm, we see an opportunity to disrupt Venture Capital in Africa forever. There is no reason why limited partners and investor committees of investment bankers and aid workers who don't live here, don't understand our context, don't believe in our entrepreneurial talent and don't understand our challenges can determine which innovators help us make it through this crisis but you can't. You too can fund an African future.

If you would like to join the Future Africa Collective - our exclusive community of co-investors in African innovators building the future - please apply here: www.future.africa/collective.

www.future.africa Image credit: continuitysa.com