Sramana Mitra: My last trend question is B2B versus B2C. It sounds like it’s largely a B2C entrepreneur pool.
Eghosa Omoigui: Actually, it’s the other way around. That has some correlation with the difficulty of access to capital. What you find is that more entrepreneurs are entering businesses where their path to revenue is much shorter.
No one is going to give you three years of financing to go out and build a customer base and not monetize. We’ve done a few consumer plays, but many investors favor B2B.
Sramana Mitra: B2B is a lot more cost-effective to build than these large-scale consumer plays. There is one factor that is still true in Africa. The mobile advertising is still cheap.
In other markets, it has become expensive. There is a way of doing online customer acquisition that is still affordable in Africa, which would not be true in America anymore.
Eghosa Omoigui: Except that the market is mostly offline. More importantly, being able to create an advertising platform that would allow SMBs to advertise in local environment is quite difficult. Newspapers are expensive.
We invested in a company that is doing extremely well. They design screens that are wirelessly enabled. They’re little tablets in retail stores and cars. They drive content and commerce. What that does is, it enables hyper-local advertising. Essentially, it’s AdSense of the real world. That’s a large opportunity that we feel is gigantic.
Sramana Mitra: That makes a lot of sense. I was thinking more about your conversation on female founders. What is driving that trend?
Eghosa Omoigui: We don’t know. We are 45% female in the fund. I grew up in a household with strong and smart women. That’s normal to me.
Sramana Mitra: It looks like there is enough female-led deal flow.
Eghosa Emoigui: Yes, there’s a lot of deal flow. There’s one interesting trend that we detected in our portfolio of women-led firms. Every single one we’ve done is a solo founder.
Sramana Mitra: Interesting.
Eghosa Emoigui: It’s not that we’re looking for women solo founders. Everybody in the portfolio is exactly that. In a lot of these sub-Saharan markets, they run into chauvinism. They run into patriarchy. There’s all this expectation of what they should be doing.
They start these businesses. They start on problems they care about. They have important insights into those problems. We continue to be amazed at the quality of the founders that we’ve seen.
One of the founders told me that one of the things that made a difference to her was coming to our office, sitting at a conference table, and seeing all these women looking back at her. That just made a difference. We have some superstars, and we are very happy with them.
Sramana Mitra: What is the Facebook penetration status, or the social media penetration in Africa? Is that a customer acquisition channel that is viable?
Eghosa Emoigui: Nigeria has 26 million internet users now. Years ago, there were around five million. Facebook is Facebook. Facebook is WhatsApp. Facebook is Instagram. We look at the activity.
Instagram continues to be a very significant driver of activity and attention in African markets. It’s probably the same thing in emerging markets. Facebook, as an advertising channel, works.
Sramana Mitra: Where are you normally? Your profile says you’re in Los Gatos.
Eghosa Emoigui: I am everywhere and nowhere.
Sramana Mitra: Thank you very much. This is very interesting. I’m personally fascinated by Africa and this whole explosion of youth population and how education is going to evolve.