CAPE TOWN - On Wednesday Day 2 of the MEST Africa Summit kicked off in the Waterfront, Cape Town.
The penultimate panel for the conference gathered some of the biggest names in VC to discuss the concept of Silicon Africa vs Silicon Valley.
The panel discussion was led by Julien Decot, Head of Platform Partnerships, EMEA, of Facebook who welcomed a star-studded cast to join him on stage.
The panellists in this much-anticipated panel included Jorn Lyseggen, Founder and CEO of Meltwater and MEST; Keet van Zyl, Co-Managing Director of Knife Capital; Polo Leteka, the Executive Director of IDF Capital; Manuel Koser, Partner at Silver Tree Investment Holdings; Vuyisa Qabaka, Founder of Uprise Africa; Bastian Gotter, Founder and Partner at Spark.ng; and Pule Taukobong, Founding Partner and MD of CRE Venture Capital.
The discussion started with a bang as Decot alluded to the ever-elusive tech unicorn and whether finding the mythical creature will help Silicon Africa compete on equal terms with Silicon Valley.
“We should forget about unicorns that don’t exist and focus on our gazelles,” countered Keet van Zyl immediately, “My view is that from an African perspective we generally build a different type of company than the typical Silicon Valley company. Embracing failure and getting third or fourth or fifth time lucky and throwing money at problems is simply not possible in Africa due to limited funding.”
“It’s a cliché to think about the non-existent unicorn, we shouldn’t be chasing the binary unicorn. The concept of a gazelle, a high-growth sustainable company that creates jobs, is really what we should be focusing on.”
The once-popular concept of the tech unicorn seems to have lost its flavour in the African market.
Jorn Lyseggen added: “The hunt for the unicorn is a very flawed obsession across the world including Silicon Valley. The search for the unicorn is very destructive. And everyone that tries to copy Silicon Valley is going to fall very flat on their face. Every market has unique attributes and should be treated as such.”
“The interesting thing about Africa is that the opportunities are so big. Every little opportunity in other larger ecosystems like Silicon Valley is so crowded. In Africa the opportunities are endless. The overall conditions for startups does not only include capital and expertise. The biggest challenge is actually opportunity, and in Africa there is an abundance of it,” Lyseggen concluded.
Although it seems that opportunity in Africa is the golden ticket for tech startups, Pule Taukobong was quick to note the opportunities for African startups elsewhere.
“African companies don’t have to solve African problems though,” Taukobong stated, “They can solve global problems. We can compete globally in the tech ecosystem.”
The discussion continued to explore what the role of the VC is in the tech startup ecosystem as it was agreed that capital is only part of what key players such as those participating in the panel do as a service to the ecosystem in the capacity of a VC. However, although not the only important facet to building a business, capital is a struggle for most in Africa.
“We’ve gotten so stuck on the definition of VC, we’ve tried to superimpose it on our market. We need to educate around VC. We don’t have to cut and paste what is happening elsewhere in the world, yet we cannot ignore what’s been learned in other ecosystems.”
Pule Taukobong added to this: “In Africa’s ecosystem, because it’s harder it will yield better results. To attract capital as an entrepreneur here you have to work very hard. Capital is just a service. VC is the same as your accountant or lawyer, they’re just an enabler. The approach here is we roll up our sleeves and work with the founders, value relationships and experience. It’s not just a matter of giving a cheque and hoping the business becomes a unicorn.”
Even though the unicorn notion seems to have lost its appeal, Qabaka made the point that there needs to be some sort of drawcard for the rest of the world to want to invest in Africa.
“We ultimately need to make what is happening in Africa normal for everyone else. There’ s a preference to pigeon hole. The growth and traction in Israel and South East Asia had to come because they normalised what they do. We have that need in Africa. We need to normalise what’s going on here. The flow of capital needs to be more fluid and attract itself to the talent coming from Africa, so the rest of the world can participate as well. There’s not nearly enough capital available in Africa due to our history and we need the participation of global.”
“I’m from the school of thought that says lot of our ecosystem VCs need to do a better job of selling it to other VCs across the world. I feel if you’re deploying capital you should do it as best you can. The reality of what’s going on in our ecosystem is that not enough money is coming in. If more money was coming in, people would take more risks, more deal flow would happen, and we will be able to discuss terms in doing deals with other ecosystems. We need more capital in Africa,” Qabaka concluded.
Fundraising for Africa seems to be a brutal exercise but well worth it. The ecosystem has grown exceptionally and as Qabaka so eloquently put it: Capital is global so we need to be loud about what’s happening in Africa if we want to attract global investment.
However much the conversation in this panel centred around investment, capital and VC, it is clear that these top leaders in the field believes in the talent that Africa holds.
“The driver is not capital, the driver is talent. The best indicator is young university graduates opting for entrepreneurship rather than a cushy corporate job where they could earn good money. There are opportunities missing in the corporate structure,” commented Manuel Koser.
“Talent is what fuels the entrepreneurship ecosystem,” Lyseggen agreed.
Polo Leteka finished by tipping her hat to the MEST Conference’s focus on Women in Tech.
“It’s important for us to start seeing more women in the VC space. Investing and private equity tends to be a network where people invest only where and when they feel comfortable and this has the result that women huddle together, and men huddle together. Investing is a key theme but as a woman and a leader in this space I believe it to be important to become more inclusive.”
She continued: “Diversity always adds to the bottom line. It just makes business sense. The reality is that women tend to bear the brunt of societal problems and are therefore in the best position to come up with solutions to those problems. If we continue with these so-called “boys clubs” then we are leaving money on the table. I think we need to deliberately be seeking diversity to reach our potential.”
- BUSINESS REPORT ONLINE