• Andela (Infosys)
  • Jumia (Amazon)
  • M-Kopa
  • mPharma
  • Flutterwave
  • CoinDirect


  • The market sizes are just small. And smaller than your intuition would lead you to believe. SA, Nigeria and Kenya are the largest and so a presence in at least one of those is essential. Outside of that, in Sub-Saharan Africa, there are some fast growing and business friendly locales like Ghana and Rwanda, but the addressable markets are practically non-existent
  • It means building a consumer-focused business is very tough because the relevant consumer base is likely to be tiny. When running the numbers, you have to take into account preferences by tribe, race, gender, nationality and income level. Only some of which apply when thinking about western markets where preferences can be more homogenous
  • Disposable income across the continent is small on an individual and absolute level, despite the sheer number of people. There is high affinity for established western brands at the upper end of the market and so penetrating this segment is challenging
  • Distribution is tough. A patchwork of family owned stores fragment the landscape and are closest to the customer and so often your business will rely on getting into these stores. Tech companies have begun to augment these stores across the continent, but it’s still early and most will have little technical capacity whatsoever
  • Markets are informal in nature and by that I mean not registered with authorities. For example, only c. 5% of Kenyans have bank accounts, money instead flows through m-Pesa and is outside of government control
  • The consequence is that any given business must be able to service markets outside of their home country. Some more canny companies seem to try to push this angle (most common; we’ll move into Latin America after completing our next round) because they know the domestic African markets just aren’t big enough to justify venture valuations. Quite often, it’s just a bit too early
  • B2B focused businesses are better, but it’s hard to pick which sectors are ready. Africa is not a meritocracy outside of the main multinational institutions and so founders must be well connected to sell into larger and often family run organisations
  • Many markets are protected. Government links into businesses are rife, especially in logistics and so taking on these interests can be fraught with danger. In Nigeria it’s said to be almost impossible to obtain a banking license without knowing someone in the government intimately
  • Regulatory differences across the continent are vast and of course differ country by country
  • Cultural differences are relevant by tribe and country, depending on the jurisdiction. Supposedly ex-communist states clamped down on tribal differences with the result being to spur fervent nationalist rhetoric, whereas countries like Kenya and Zimbabwe are divided totally along tribal lines. These tribes vote together, and the largest ones often determine electoral outcomes. In the case of Zimbabwe, the largest tribe, the Shona led by Mugabe, decided they no longer liked the minority (c. 20%) Sindebele and so began that country’s slide into genocidal chaos. These conflicts are echoed in almost every country, Kenyans won’t work with Nigerians as they find them too aggressive whilst Nigerians and South Africans have been physically trashing each other’s stores over the past year
  • These societies can often feel violent and immature, life is cheap and populations are easily riled
  • The obvious consequence is that one never feels truly safe. Parts of cape town feel like Monaco and rarely as a tourist will you have problems, the issue is that when you do, there is nobody to help you. Car-jackings in Joburg are still all too common and in Nairobi, terrorist attacks on westerners do occur frequently enough to be of concern
  • The opportunity cost of being an entrepreneur is very high for a skilled, well-educated individual. Familial expectations are of course to get a high paying job at a multinational organisation and to use the paycheck to support the wider family. Moving away from a prestigious job and a regular income is an opportunity cost few can bear
  • There are significant business practice differences. In Egypt for example there said to be 3 types of books — those for the management team, those for the government and taxman and those for the investor. It’s supposedly not malicious, just an ingrained cultural practice
  • Due to their overbearing influence, it’s worth thinking about the role of the following parties in particular when evaluating an investment;
  1. Telcos
  2. The Chinese; Particularly in the form of the handset manufacturers like Transsion, see figure 01 below and Opera, the most used web browser







Venture Investor with Concentric

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Alexander Mann

Alexander Mann

Venture Investor with Concentric

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