Eghosa Emoigui: I decided that it made sense to look at those emerging markets. I ended up picking Southeast Asia and Sub-Saharan Africa, in part, because they felt very highly-correlated. You had very similar signals in these markets that suggested they would evolve.
I went out to those two markets. I had no luck, because everybody thought I was insane. Those two markets were completely uninteresting in 2011. I then decided that I was not going to quit. I picked sub-Saharan Africa and went into that.
Why were sub-Saharan Africa interesting as well as Southeast Asia? Those two markets represented significant opportunities with respect to consumer, business, education, healthcare, government. With that as a backdrop, what we spent time looking for are two drivers to support that thesis.
Africa tends to have a younger demographic. Nigeria, for instance, has 200 million people. 70% are under 30. Uganda’s teens are 85% of the population. We found very significant and very rapid mobile broadband adoption. We saw more investments in internet and internet-enabled infrastructure.
The real big mover was the affordability of connected devices. They have consistently driven innovation at, increasingly, lower prices. We found these new markets that could leapfrog through distribution of both connectivity as well as devices.
Africa represents the coalition of those key drivers. If you now step back and say, “What are the mega trends that are applicable to Africa and African markets?” One was that mobile platforms were reshaping distribution and consumption paradigms very dramatically.
You saw a real opportunity to refactor financial services versus disrupt them. The most important thing is that Africa represented significantly large iceberg micro-economies. I call them iceberg micro-economies because a lot of these markets have these lurking micro-economies. Iceberg because nearly all of these micro-economies lie beneath the surface.
When you apply demographics, technology, and broadband to the mega trends, there were interesting things you could do. With technology, it could be rise of mobile in existing marketplaces, doing education technology at scale, or being able to deliver a high-octane adtech disruption. Africa represents, for us, the next big thing. That continues to be the case.
Sramana Mitra: Let’s talk about examples of companies that you have invested in from your first fund so we can get a feel for what kind of things you’ve been investing in. Also, to get a feel of what is happening in Africa.
We can do two or three examples. Take us through what they had when they came to you. How did they come to you? What is it about these companies that struck you as possibilities of really building interesting and exciting ventures in the long run?
Eghosa Omoigui: We’ve invested in over 20 companies from seed all the way to early growth. I’ll pick a couple of them and use them as examples of why they were interesting. First of all, what we thought about and talked about at length is how to create investments thesis to support the investing activity.