Episode #358: Africa Startup Series – Zachariah George, Launch Africa Ventures, “The Evolution of Tech In Africa Had To Always Start With Fintech”

Episode #358: Africa Startup Series – Zachariah George, Launch Africa Ventures, “The Evolution of Tech In Africa Had To Always Start With Fintech”

 

 

 

 

 

 

 

Guest: Zachariah George is the Managing Partner at Launch Africa Ventures – Africa’s leading Early-Stage VC Fund. He is also the Co-Founder and Chief Investment Officer of Startupbootcamp AfriTech – the leading multi-corporate backed venture accelerator program in Africa.

Date Recorded: 9/15/2021     |     Run-Time: 1:06:57


Summary: In today’s episode, we start by hearing how volunteering at an African orphanage changed Zach’s life, convincing him to leave Wall Street and move to Africa to eventually launch the first accelerator there. Then we hear about all the areas technology is touching that Zach is excited about, including education, healthcare, finance, transportation, and more.

As we wind down, Zach shares the challenges companies face when navigating the different countries across the continent.


Vinovest | LinkedInSponsor:Today’s episode is brought to you by Vinovest. Vinovest makes it easy to invest in fine wine. Vinovest’s investment platform lets you buy and sell wines that have increased in value like Screaming Eagle and Chateau Lafite. Vinovest provides you with access to some of the finest wines in the world, and takes care of the storage, insurance and authentication of each wine in your portfolio. You can get started in just minutes online. Go to vinovest.co to create an account and invest in fine wine today.


Comments or suggestions? Email us Feedback@TheMebFaberShow.com or call us to leave a voicemail at 323 834 9159

Interested in sponsoring an episode? Email Justin at jb@cambriainvestments.com

Links from the Episode:

  • 0:00 – Sponsor: Vinovest
  • 2:12 – Intro
  • 2:59 – Welcome to our guest, Zachariah George
  • 4:40 – Zach’s globetrotting journey to South Africa
  • 6:06 – Key connections forged in college
  • 7:23 – How volunteering at an orphanage changed the course of his life
  • 9:57 – Cape Town’s potential as an innovative tech city
  • 13:00 – The case for corporate investment in startups
  • 14:15 – Setting up the first corporate accelerator in Africa
  • 17:08 – Launching Startupbootcamp AfriTech with corporate support
  • 18:37 – What makes accelerators so successful
  • 20:48 – Post-accelerator growth of portfolio companies
  • 23:16 – Moving away from corporate funding of accelerators
  • 26:37 – Meeting the global demand for early-stage African startup investing
  • 27:58 – Launch Africa Ventures dynamic with LPs
  • 30:38 – Creating synergies between portfolio companies
  • 31:43 – Launch Africa’s approach to idea sourcing
  • 34:25 – Why many African startups don’t need to scale outside of the continent
  • 37:21 – African investment opportunities that have been historically ignored
  • 39:18 – An overview of the largest economies in Africa: Kenya, Egypt, South Africa, and Nigeria
  • 42:32 – Investing opportunities outside of the four key players
  • 44:23 – Some of Launch Africa Ventures’ most innovative portfolio companies
  • 48:36 – Why tech solutions in Africa have more impact and higher returns
  • 50:08 – How the African venture ecosystem has transformed in the past 10 years
  • 53:39 – Launch Africa Ventures’ increased accessibility to investors
  • 56:28 – Startup events in Africa; Africa Early Stage Investor Summit 2021, SuperReturn Africa, AfricaCom
  • 57:57 – Zach’s plans for the future of the fund
  • 58:52 – Zach’s most memorable startup and personal investments
  • 1:02:33 – Learn more about Launch Africa Ventures and connect with Zach; zach@launchafrica.vc, Zach on Twitter, Launch Africa Ventures

 

Transcript of Episode 358:  

Sponsor Message: Today’s show is brought to you by Vinovest. Vinovest makes it easy to invest in fine wine. Their platform lets you buy and sell wines that have increased in value like Screaming Eagle and Chateau Lafite. Vinovest provides access to storage and insurance, so all you got to do is sit back, relax, and enjoy a nice glass of fine wine. In fact, fine wine has typically had a low correlation to traditional asset classes and that’s one of the reasons I recently added a case of 2018 Sorento Barbaresco Asili to my own growing portfolio. We recently had the founder of the company, Anthony Zhang, on the podcast for episode number 349. Make sure you check out that great conversation. And you can get started in just minutes online. Go to vinovest.co to create an account. That’s vinovest.co. Check out vinovest.co again to invest in fine wine today.

Welcome Message: Welcome to the Meb Faber Show, where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.

Disclaimer: Meb Faber is the co-founder and chief investment officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.

Africa Startup Series Intro: Today we have an episode on our Africa Startup Series. If you look out the horizon the next few decades, arguably no place in the world has more tailwinds than Africa. And right now the startup scene in Africa is on fire, with amazing companies being founded, fundraising records being set, and M&A heating up. We’ve already featured some of the top companies from Africa like rocket ship unicorn Chipper Cash and Smile Identity. But in addition to these world-changing startups, we’ll also talk to those that are boots on the ground investing and allocating across the continent to learn firsthand about why Africa presents such a unique opportunity today. Please enjoy today’s show in the Africa Startup Series.

Meb: What’s up, everybody. Today, we have a soulful episode. Our guest is the managing partner at Launch Africa Ventures, a leading early-stage VC Fund, and the co-founder and CIO of startup boot camp AfroTech, the leading venture accelerator program in Africa. Today’s show, we start by hearing how volunteering in an African orphanage changed the trajectory of our guest’s life, convincing him to leave Wall Street and move to Africa to eventually launch the first accelerator there. Then we hear all about the areas technology is touching that our guest is excited about, including education, healthcare, finance, transportation, and more. As we wind down, our guest shares the challenges companies face when navigating the different countries across the continent. Please enjoy this episode with Launch Africa Ventures, Zach George.

Meb: Zach, welcome to the show.

Zach: Thank you, Meb. Great to be here. Great to be here.

Meb: Where do we find you today?

Zach: At the tip of Africa. I am based in beautiful Cape Town, South Africa. Came here on a holiday 11 years ago from New York City and just never left. So, I just couldn’t get on a plane back, so I’m still here 11 years later.

Meb: That is the same story for me in LA about same time period. I said, “Worst-case scenario, I live at the beach for a year.” And fast forward, and now I’ve acquired a wife and a child and everything else and don’t want to leave. I hear you’re also a guitar player. I got a request for you. We got to update the intro soundtrack to our podcast. I feel like I should get a Zach jingle. It’s a lot of pressure.

Zach: Yeah, I’ll do a tune. I’ll do a tune in due course.

Meb: If you have a little coffee or wine this weekend, South African wine, and come up with something, let me know. We’ll put it on the intro.

Zach: Of course. It’s an important part of my life, music. I think there’s going to be a whole class of people, I call them the crooning capitalists, capitalists who croon. But I’ve been playing the guitar and singing since I was 12. And it’s just such a huge stress relief. Some people like to meditate, some people like to run, but for me, it’s music and singing. And it sort of keeps a good balance between my left and right brain.

Meb: You, almost more than anyone…we’re going to talk about Africa, but you, my gosh. Oman, India, Stanford, New York, Africa. See if you can condense that. I want to hear a little bit of the origin story, a little Lehman Brothers sprinkled in as well. So how did you end up in South Africa, by the way? Let’s hear the origin.

Zach: So short story, born in the Middle East in Oman and lived there for 16 years. Parents were Foreign Service who worked for the Ministry of Finance. Mum was a teacher. Grew up sort of third culture, ex-pat, international schools for 16 years of my life. I went for the very first time to India for my undergrad. So just think all the IIT, which is sort of geek school for engineers. It’s where the CEO of Microsoft and Google went to school. So super cool school.

Meb: Was that pretty intense or was it more just like the challenge of getting into it, which is like 1,000,000th of a percent, I feel like, in India? Is it actually, like, really hard once you’re into or?

Zach: It’s pretty hard once you get in. But it’s harder to get in. It’s a little easier once you’re in. But it’s literally MIT on steroids, just to put it mildly. But once you’re in, I sort of was one of those… I spent most of my four years at IIT playing music and riding motorbikes and chasing women. And I was like, “I have to have a GPA of at least three.” No one really cares what your GPA is if you’re at a top school as long as you graduate. And I realized that in my first semester, so I was like, “I’m not going to be a 4.0 or a 3.8, so let me just pass and have fun.” And I did.

Meb: Smart decision.

Zach: And funny enough, that’s what actually helped get me into Stanford. So I was just a complete sponge. I just literally soaked in everything from… I mean, there were a few folks in my class that ended up founding what are now some really shit-hot tech start-ups. One of them is now the COO of Palantir. He was literally in my class at Stanford. A couple of guys have ended up founding some really incredible VCs in Silicon Valley. But at 22, I was just a sponge. Incredible network. It sort of ultimately led me to now running one of the top VC funds in Africa. But the key connection that I made today was through the Stanford alumni network, the Y Combinator network that, again, was run by a whole bunch of Stanford alum.

So Stanford to Wall Street, how did that happen? When you have a couple of $100,000 debt to pay off, where do you go? You go to Wall Street. You don’t work for a start-up and get a few thousand dollars in salary to pay off your debt. So I went to Lehman for a few years. I joined their global finance team doing risk management, and currencies, and derivatives, and all of that. All those three-letter acronyms that destroyed Wall Street, CDOs, CMOS, if you couldn’t pronounce it, you could sell them kind of thing. I was at Lehman for a few years until they went down in 2008. Then I was at Barclays for a couple of years after they acquired Lehman. Loved it. In between the Lehman to Barclays transition, I had a bit of a head heart crisis moment where I was like, “What the hell am I doing as a banker and saving the world’s…I’m doing nothing for the world.” So I had a moment where I said I have to do something a bit more meaningful. So I took a sabbatical for six weeks and volunteered at an orphanage in Ghana. I kid you not, I googled Volunteer Abroad Africa, because it was the most diametrically opposite thing to do from being a banker on Wall Street. And I found myself in Ghana for six weeks. And Meb, that completely changed my life. I was like, “I have to do something in life that’s a bit more impactful and not just make rich people richer.” That was in June of ’08. And then I came back in August of ’08, and literally a month later, Lehman goes bankrupt. So it was like a sign from the heavens that I had to do something.

And then after my two years at Barclays, I took another sabbatical and came to South Africa to watch the World Cup, the Soccer World Cup in 2010. And South Africa just hit me like a ton of bricks. It was just such an incredible experience, the vibe, the culture, the music, everything. Just Cape Town every day reminds me of living in San Francisco. The mountain, the ocean, the sea, the wine, the coffee, everything, people. And I decided to make South Africa home. And that’s how I got here. Then obviously what happens after that is another long story. But that’s how I made my way to South Africa. And the rest is history.

Meb: Oh, good. Let’s dig in. So the timeline would be what at this point? 2010, 2011 at this point?

Zach: Yeah.

Meb: All right. Well, walk us through, what was the runway for where you are now? Did you start in the sort of banking world in South Africa or how’d you get to where you are?

Zach: In 2010, 2011, South Africa was pretty much just a tourist destination, safaris. And it was a land of apartheid, Nelson Mandela, then there were tourists for safari. There was nothing in between. And then with the World Cup, you saw this huge influx of foreigners, Americans, Europeans, Indians, people from all over the world visiting this country, and they were like, “This is a beautiful country with lots of potential, why isn’t there more innovation, more entrepreneurs, more this, more that?” And that was what made me consider quitting my job on Wall Street and relocating here, which I did. At the end of my five weeks here, I never caught a plane back to New York City. I resigned over Skype and I said, “Just ship everything to Cape Town, and I’m going to build a life here.” And I was 29.

So outside of the beauty and the lifestyle in Cape Town, which is incredible, the one thing that I noticed was Cape Town had the right elements to become an innovative tech city, sort of like Silicon Valley in Africa. It had the right combination of universities, research centres, government assistance, and understanding of tech, incredible developers, designers, UX/UI folks. And despite all that, the total amount, and this is an important point, the total amount of venture funding on the continent of Africa, so 54 countries, back in 2010, 2011 was $20 million. That’s two deals on like Market Street in San Francisco on a Tuesday morning. Absolutely shockingly low. That was a big decision that I made to say, “If I can take that from 20 to 200, or anything more than that, I would have to build an ecosystem.” And I’ve always loved starting new things and taking on new challenges. But I didn’t know much about Africa. I’m an ex-investment banker, having lived in Asia and the U.S., what do I know about Africa?

So I made a decision at 29 to spend a whole year travelling across Africa and just listen. Not talk, just listen to what entrepreneurs do, what do tech transfer offices at universities do? How does IP work from a university research perspective? Are there any incubators? Are there any accelerators? The answer to all these questions was there was none. But there is a huge amount of power that large corporates in Africa have. And these large corporates are predominantly banks, insurance companies, retailers, and big telecom firms. And these four, sort of champions of industry control a huge amount of the money flow in Africa. And again, Africa is 54 countries but I’m just saying, broadly speaking. The largest economies of Africa, which are Nigeria, Egypt, South Africa, and Kenya, that’s where money moves. So I figured all I had to do was convince these large corporates that it was in their best interest to work with start-ups. But that is a two to three to four year period. It’s literally a cultural and anthropological mindset.

Meb: What was the reception at that point? Was it something where people were like, “Yeah, sure, it sounds good?” Or were they like, “You don’t understand, this doesn’t work here?” What were the conversations like?

Zach: I mean, the conversations were very defensive. Most large corporates only care… I mean, executives are… You get paid to say no to anything new. As long as you do, tow the line, and get your bonus every December, you keep your job. That’s how corporates have worked forever. So anything to do with innovation and start-ups and entrepreneurship has always been viewed, at least like 8 to 10 years ago, as either irrelevant, unnecessary, or something that a corporate could do for its CSI, its Corporate Social Innovation, or to make themselves look good in a corporate handbook in the annual report.

So, the real change that came about, Meb, was when you have these tech start-ups in the payment space. As, you know, Africa has a huge advantage over the U.S. when it comes to mobile payments, mobile banking, wallets, etc. And in things like prepaid cards, anything prepaid, we skipped the landline, we went straight to sort of mobile-based technologies. So the moment corporate Africa felt that their turf was challenged by technologies such as AI, blockchain, sensors, drones, which were pretty new, but ultimately, they were losing out end customers, which are millennials and to a certain extent, Gen Z’s in sort of 2014, 2015 onwards, they took these innovations seriously.

So I was consulting a whole bunch of corporates in Africa, mostly banks and insurance companies for about three years on how to invest their money better. But it wasn’t until you had quite a few FinTech companies, mostly payment firms, asset managers, peer to peer wallets, etc, that literally started threatening customer acquisition that large corporates have, that they started to take notice.

In 2015, we set up the first-ever corporate accelerator in Africa, it was called Tech Lab Africa, which was funded by Barclays. And it was a precursor to Techstars. So obviously, Techstars had a huge presence in the U.S. and in the UK. And I believe at the time, also in India. And they were intellectually curious about Africa but had never come here. And because they had a partnership with Barclays, they said, “Listen, Barclays, could we launch Barclays Techstars?” And Barclays said, “Yes, on one condition. We need to know that this shit actually works in Africa.” “Oh, we happen to know this guy Zach, who is ex-Barclays, guess what? He lives in South Africa. Let’s tell Zach to run a pilot accelerator to see if an accelerator could work in Africa.” So literally, they gave me… They called me and said, “Listen, we’ve heard a lot about you. We’ll give you 12 weeks. We want you to set up an accelerator for Barclays. And if it works, we can get Techstars in here.”

So literally I had two months, two-and-a-half months to set up an entire accelerator. I mean, this is building Y Combinator in two months. It’s not for sissies, to put it mildly. And this is where the Stanford connection helps. So I called a few mates at Stanford and said, “Listen, I need to speak to someone in YC.” So I managed to get a hold of some of the MDs at YC. And literally said, “Listen, I need to borrow your playbook to build an accelerator in Africa.” By the way, my offer to them was, “Hey, I’d love to launch YC in Africa. I know how it works.” And sure to God, they were like, “No, sorry, YC is an American accelerator. The best we’ll consider is maybe doing a YC in Mexico, but like YC is California. And if you want to have top African start-ups be part of YC, get their asses to San Francisco.” I was like, “Okay, cool. No harm, no foul.” But I used the concepts of YC. I partnered with an American friend of mine, Philip Kiracofe, and we together built the first accelerator in Africa called Tech Lab Africa. It was a ridiculous success. Because for the very first time, you had all these senior executives at Barclays saying, “Oh my God, we can actually work with payment gateways, we can work with chatbots. In our call centres, we can work with online healthcare booking platforms for our healthcare companies.”

So there was this whole come to God moment where a lot of banking execs were just pleasantly surprised that FinTechs could do a lot of work with banks and not challenge and sort of … their turf. And that opened the floodgates to a lot of pilots, proof of concepts, JVs, and license deals that Barclays loved. And of course, this is all FOMO content. The moment one bank does it in Africa, all the other banks are like, “Wait a minute, where’s my share in this?” And then we capitalized it.

So Techstars ran for two years, 2016, 2017. And then in 2017, we launched the Startupbootcamp, which is the top accelerator in the world outside of the U.S. So, it’s very popular in Europe and Asia and Latin America. And Startupbootcamp is pretty much like Techstars. The only big difference and an important difference is that they work with multiple corporates. So with Techstars, you have Barclays Techstars, Nike Techstars, but all the start-ups in the cohort have to work with Barclays or with Nike. That was super fun because now you get these… Well, we had Google, Amazon, and PwC. And Dentons is one of the top law firms in the world help us from a legal structuring tech perspective.

So Amazon would throw $100,000 of credits to all our portfolio companies. Google would throw in like $100,000 of cloud. So we had all the support systems in place.

And then the corporates at the time, Old Mutual, the largest insurer in Africa, Nedbank, one of the top banks in Africa, PwC, obviously, Woolworths, one of the largest retailers, and MTN, a large telco. So we had all these big corporates support the start-ups from a commercialization standpoint. And then we had all the tech firms with product.

So, it was very easy for a startup to scale and grow because you had all this support. And you’re essentially, as a corporate, de-risking your own investment. And that’s basically how this thing had lift-off. So that was how we started it. It was a long, painful process because we spent almost four months every year on the road travelling to Egypt, Nairobi, Kenya, Dar es Salaam, Kampala, Dakar, Senegal, all over the continent to all these incubation co-working spaces, universities, finding this raw talent from under the weeds and saying, “Can you solve this problem for this bank? Can you solve this problem for this insurer? If you can, you get to keep the IP and we’re going to have these large corporates help you with customer acquisition.” Because one of the biggest challenges in Africa that our listeners will be pleasantly surprised to hear is the cost of customer acquisition is really high if you’re a B2C start-up. And there are two main reasons for it. The penetration of the internet is not as high as the U.S. or Europe or Asia. And number two, the average consumer purchasing power is not that high, at least historically. But the one thing that most people have is they have bank accounts, they have phone lines, they have insurance policies, they have retail courts. So if you can access customers through large distribution platforms, a.k.a. the large corporates, then that is a sure-fire way for you to lower your customer acquisition cost and then concurrently increase your customer lifetime value, your LTV. And that’s why accelerators are super successful, and they still are, is because corporates could benefit from really cool pieces of technology, and the founders could benefit from almost zero customer acquisition costs, which is usually the biggest pain point that they have.

Meb: All right. So you got to get your hands dirty with a lot of start-ups, a lot of travel. It seems like the coolest part is just getting to know everyone. It’s like a gigantic four or five-year networking experiment. Were there any notable companies that sort of came out of that period that have continued to exist or been acquired or are notable that you guys got to work with in those early days?

Zach: Over the course of four years, we ran three cohorts over four years of 10 start-ups. We saw almost 4000 start-ups from Egypt to South Africa and everywhere in between.

Meb: Wow.

Zach: Yeah, it was incredible, Meb. Ultimately, we would narrow down an average of about 1200, a thousand start-ups every year. We would narrow that list down every year to about 100. And then we would get all our corporate partners to sit with us in a room to select the top 10. So you knew that once you chose your top 10, every major corporate in the program had vetted them and could identify a way of working with them. You’re essentially eating your own dog food.

So we would have an 8% stake in these companies at Startupbootcamp Africa, and the corporates were essentially our offtake agreements. So you know that it’s highly unlikely that these companies will go under because of lack of customer, because these corporates have specifically said that we like them because of this. You do that for three or four corporates, and then you’ve pretty much covered yourself. So the success rate of the portfolio companies of corporate-backed accelerators in Africa is pretty damn high. So 5 years later, the 30 companies that we invested in, only 4 of them have gone under. The other 26 are still alive, running, operational. One of them is now a $500 million company that just closed its Series B round. It’s the largest digital bank in Africa. They’re called Kuda Bank. They’re like the Chime or the N26 or Monzo of Africa. When we invested in them and they were part of our accelerator, they had about 5000 customers on their waiting list, their digital bank. Our valuation was effectively a quarter of a million dollars because it was still pre-revenue.

Meb: Wow. You don’t hear about that ever, anymore?

Zach: No, you don’t. The most recent round was led by Valar, Peter Thiel’s fund, and Target Global, and Entrée Capital from Israel. So that’s obviously a blowout success. But there are a few other companies that are close to 50 to $100 million in valuation. But remember, as an accelerator, you get really favorable terms because you’re adding a lot of value outside of just your capital. That’s why YC can invest $100,000 for 6%, Techstars can do $100,000 for 7%, same returns for us. But the uptick in valuation to an accelerator, especially a corporate accelerator, is huge.

And then we ran that for four years, obviously, because of COVID, a lot of corporates had to cut back sponsorship of accelerators. So 2020 was a bit of a downer. And sort of mid-2020 was when I made the pivot to say, “Let’s not depend on these large corporates to fund accelerators. Let’s look at the companies that have gone through world-class accelerators like Plug and Play, Techstars, Startupbootcamp, YC, etc., in Africa, by the way, and look at backing these founders when they’re raising their seed rounds.” Because the problem in Africa, and this is probably a Southeast Asia, Latin America, Africa problem, I put them in the same bucket, is when you’re doing a pre-series A round, there’s so little available pool of capital outside of friends and family and angels. You may have like a super hyperlocal VC fund, like, if you’re a Kenyan FinTech, you may have like a small Kenyan fund that might write you a $100,000 check, but it’s pretty regional and hyper local.

And then suddenly you get to series A, and I mean, the sort of ballpark is once you’re doing $100,000 in MRR, monthly recurring revenue, is when the big sort of VC start looking at you. And there’s suddenly like an influx of VCs looking at you. And these are continental VCs as well as U.S., European, and Asian VCs. So you can have a start-up that’s in their seed phase for about two to three to sometimes even four years, with valuations of like a million to $5 million tops, and then all of a sudden, you get a lot of traction and you do your A at a valuation of like 25 or 30. So that jump is massive. And no one’s funding these companies except angels.

So I turned around and said, “What if you started a Pan African fund that literally invests only in graduates of world-class accelerators in Africa, and we lead rounds, and we reduce the time it takes for founders to get from seed to series A?” Which used to be two to three years, sometimes even more, and now we can bring it down to like a year, maybe 18 months. And that’s because if you’re an institution coming in that early, but the key thing here is historically when VCs have tried to invest in company’s pre-series A, out of every dollar they invest, something like 70 to 80 cents on every dollar goes towards solving shit that start-ups haven’t taken care of, like their legal, or their accounting, or their marketing, or their HR, or their tech. That is not a VC’s problem, that is stuff that an accelerator, an incubator, or a venture builder must do for you. You got to have your house in order and then raise money from a VC purely to acquire customers and spend on marketing and growing your team.

So with our focus on only backing accelerator graduates, we could easily get a steady pipeline of companies that were literally on a platter to us. And because we’ve worked running accelerators for the last seven years, it was easy. We had every accelerator in Africa literally coming to us and saying, “Please, these are our top five graduates before demo day, we’d love for you to lead their round.”

Meb: It seems like such an obvious proposition. What’s the timeline? When did the fund get started? When did you start putting this together?

Zach: So, we started putting this together. There was a big event in Mauritius last year. So for those that don’t know Mauritius is like the Luxembourg of Africa. It’s the most ideal jurisdiction to start a fund because they have the most favorable double taxation treaty, uses no capital gains tax, 3% corporate tax, and it’s super above the water and investor-friendly. So we got a summit in Mauritius. We got a bunch of people together. And we set up the fund in July last year 2020, with a goal to be the most prominent seed-stage fund in Africa. We targeted a $15 million dollar fund. And within three to four months of us fundraising, just the demand from founders was so huge. And we had LPs from all over the world come and say to us, “Is this a vehicle where we could invest in early-stage start-ups in Africa without having to spend ages DDing them ourselves?” I’m like, ‘Yeah” And we were oversubscribed. So we’ve now oversubscribed to 25. And we are currently sitting at about $20 million in commitments. The key thing here is we put our money where our mouth is. We said we would be super active and we would reduce the time it takes to get start-ups funded. Well, guess what? In the last 10 months, we’ve done 56 deals already.

Meb: How many? Say that again?

Zach: Fifty-six.

Meb: Wow, that’s awesome. Congrats.

Zach: Thank you. I really appreciate it. We do all our investments through SAFE notes. So we don’t argue about valuation and price per share and claw back rights and liquidation preferences and all that bullshit. That will happen at series A, but we do all our investments through SAFEs. We’ll do a couple through convertible notes if that’s what the founders want. But we can make a decision relatively quickly because a lot of our DD is done by the accelerators. Our legal costs are pretty much zero because we just do SAFEs. So we’re spending a lot of our time doing DD on the founders, their understanding of the market, and their team. And yeah, we’ve been able to move pretty quick.

And the other thing that we as a fund have that very few funds, not just in Africa, but in the whole world have is we offer all our LPs, co-investment opportunities completely for free. Now, you might think as a fund manager, “Wait a minute, why are you leaving money on the table? Why wouldn’t you charge for it?” Well, if you’re looking to build the Sequoia of Africa, for lack of a better word, you got to give terms that are LP friendly. But more than that, you want founders to spend as little time raising money when they should be building their businesses. So if someone’s raising… The average seed round in Africa is between a quarter of a million dollars at the low end to about $2 million at the high end.

Typically, if you’re raising a million dollars, say, in a seed round, you’re going to spend six to seven months raising a million dollars. Why? Because you’re getting $10,000 checks from a whole bunch of angels, and maybe the odd small fund. Now if we say, “Cool, we’ll come in with $300,000, say, as a lead VC.” And guess what? Instead of shopping this to 25 VCs and entity groups, we’re going to ask our LPs if they want to co-invest with us. We’ve done all the DD, we’ll share our memo with our LPs. Are you in, are you not? And our LPs love it because they get to go directly on the top tables of these companies for doing no work. They trust us. And these LPs have a lot of money. I mean, we have 120 LPs in our fund sort of split between the U.S., Europe, Asia, and Africa. And they write checks of as little as $10,000 to as high as $500,000. So we can close the seed rounds relatively quick.

I mean, the number of rounds we’ve done where we’re the lead investor, and our LPs take out almost the entire rest of the round. There’ll be some space for local VCs or angels, but we’ve been able to close rounds very quick. So our founders are eternally grateful to us because they’ve spent two months raising a round. And then they can focus on the operations and hiring. And we then work within our portfolio to create as many synergies as we can within our portfolio company. So the founders then refer us to other founders who work with them. So our source of deal flow is a combination of the best accelerators and really world-class founders. So I mean, as an example, one of the top digital banks in Africa, the founder, who’s now worth…this company’s worth half a billion dollars, any FinTech that works with them, he just says, “Hey, listen, you guys should look at this company. They are awesome.” And take money from Launch Africa before anyone else. So I think it sort of creates a reputation and a brand that’s super important. And that’s how we managed to scale so quickly.

Meb: What are you guys looking for? I know you just referenced FinTech, that seems to be a pretty popular category of start-ups. But walk us through sort of your framework, like what sort of ideas have you guys been funding? Feel free to mention any portfolio companies you want to use as case studies. And we can kind of dive into what the main opportunities are.

Zach: In Africa, FinTech and Insurtech is a huge play for lots of reasons. But the obvious one being you have to sort out payments, how people, and SMEs, and large companies pay and get paid because you’ve got mobile money, you’ve got mobile wallets, you’ve got banks, debit, credit. It’s pretty complicated. The big African tech start-ups from like 2015, 2016 that are now unicorns like Flutterwave, Chipper Cash, OPay, etc., got that right. And once payment was solved, now you could build on that. You could now build electronic health management companies, you could build tech companies.

So the evolution of tech in Africa had to always start with FinTech and sort of evolve from there. So, you know, our fund, FinTech and Insurtech is still about 40% of our fund focus. In Africa, logistics and transportation is a massive problem. People spend sometimes two to three hours commuting every day to and from work and from places. So anything in smart cities, anything that makes supply chains more efficient. So how can you deliver goods from farm to fork a lot quicker? How do you help transport people and things quicker? So super apps, food delivery, last-mile logistics, e-commerce, always a huge. But again, these are derivatives of FinTech companies. FinTech, Insurtech, logistics, e-commerce, marketplaces, huge industry. Grocery delivery, you name it. And then HealthTech. HealthTech, obviously because of COVID, got a real boost in the back, and they’ve really blossomed. AgriTech, so using sensors and drones to make agricultural productivity better. And then last but not least, my personal favorite is EdTech.

I mean, think of the almost a billion people in Africa under the age of 30 that need to be educated. They cannot go down the traditional brick and mortar school system. So anything around continuing education, online courses, learning management software, LMS systems is always going to be huge. And I think EdTech globally, not just in Africa, is one of the most underrated and underfunded industries that I’m very bullish on.

Meb: How much of these start-ups across your plate or businesses in Africa that are focused entirely on the continent versus African start-ups that are also potentially offering services, products elsewhere? Is it majority continent focused or what’s the lay of the land?

Zach: I get that question a lot. So first of all, l got to remind people that although Africa is often viewed as a continent, it’s got 54 countries. So if you’re in Nigeria, the population of Nigeria is 220 million, officially, probably a lot more than that, which is the population of adult America. Do you need to even scale outside of Nigeria if you’re a FinTech or a HealthTech company? Probably not. So the fact that you’re even Pan Africa if you’re in Nigeria is a big step. Most African start-ups don’t need to scale outside of the continent. And they spend two to four years scaling into other African countries. However, in certain industries, there is a very strong correlation between Africa and Europe for lots of reasons. I mean, Francophone West Africa, the French in West Africa, the English in Southern Africa. There is a lot more expansion into Europe in sort of both series A in certain industries than the U.S. But the reality is because Africa has one and a half or 1.4 billion people, and is the fastest-growing continent from a population standpoint, you don’t really need to be outside of Africa unless you’re a B2C start-up. That’s the only exception. So if you’re building a Netflix or a Spotify, sure. But if you’re a B2B, that gravy train will keep running and running and running. Because the large telcos, the large banks will just keep supplying you with clientele till the cows come home.

So the short answer is, there are a few African start-ups that serve global markets. The most notable of them is a start-up called Andela that was funded by Zuckerberg Chan and Al Gore through Generations, his fund. They provide world-class software development tools and personnel to some of the top Silicon Valley tech firms. So, a lot of Silicon Valley tech start-ups, their devs, designers, etc, are from coding academies in Nigeria and Kenya. That’s an example of African talent going overseas. But for the most part, if you’re the PayPal of Africa, if you’re the largest POS system in Kenya, you don’t really need to scale outside of Africa, because the African market alone is quite big.

The classic example that I give is if you’re an Indian tech start-up, if you’re Paytm or you’re Flipkart or you’re OYO Rooms, why do you ever need to leave India if you’ve got 1.4 billion people as customers? The same thing with all the Chinese start-ups.

So if you view Africa as a subcontinent like India and China, there really is no need to scale to the U.S. or Europe. And I think the right VCs in the U.S. understand that, and they see that as a huge opportunity. People have ignored Africa for many years, Meb, because of one big problem, the purchasing power of consumers in Africa has historically been low. So even though you have 1.4 billion people on the continent, the purchasing power hasn’t been large enough to make it a viable market. That’s changed dramatically in the last four to five years because the cost of data has gone down significantly. That’s a super important point. The amount of people that have smartphones is growing like wildfire.

So you could have someone living in a shack or living in an informal settlement but has a smartphone with data, they will transact more often than people could imagine. So you have people living, I wouldn’t say in abject poverty, but sort of not in the best financial situation but they still have cable TV, they still have cars, because their priorities are more digital. I’m not sure if that sort of got the message across. But the consumer purchasing power is huge. And that’s why you have a whole bunch of U.S. VCs pouring money into Africa because with a declining population growth in the U.S. and Europe and an exponentially rising population growth in Africa, you can’t miss out on that opportunity. And we’ve decided to invest in that homegrown on the continent, so.

Meb: You can correct me on this, but it seems like listening to your reference, and by the way, listeners, Zach has, like, literally the most comprehensive PowerPoint deck and materials. I’m not sure he’ll share it with you guys. But if you invest, I’m sure he will. It’s pretty awesome. But are the main countries you guys operate in, is it Kenya, Nigeria, South Africa, Egypt?

Zach: And Egypt. Yep.

Meb: What are the main differences between those? Because I would picture in my head that they’re not all obviously, going to be necessarily similar as far as start-up culture, as far as rules and regulations, and language, everything.

Zach: I’ll give you a brief snapshot that’ll save you spending three hours in Google. Kenya has about 50 million people, very, very savvy from a mobile tech perspective. So Kenya is dominated by the telcos. So Safaricom and Vodacom is… Kenya invented mobile banking, M-Pesa, which you’ve probably heard of. Mark Zuckerberg has been trying to buy M-Pesa for years. And they keep saying no. The level of technology in M-Pesa where you can do literally all your banking through your phone. From a mobile banking perspective, Kenya is by far the best in the world. And everyone understands that. So if you can create any piece of technology that works with a telco, that’s how you scale in Kenya. It’s not surprising that all the renewable energy projects in Kenya, all the tech start-ups and cleantech work with telcos. All the big banks partner with telcos. All the big e-commerce companies have to be mobile-friendly. So that’s the telco piece in Africa, Kenya.

Egypt has 120 million people. Egypt is very evolved because of their close relationship with the Middle East. So if you start a start-up in Egypt, your likely next market of scale is the UAE and Saudi Arabia. Egypt is very evolved. Egypt has a huge economy, but more than 70% of their economy is informal, so they pay no tax. And it’s all small businesses. So any piece of technology that can digitize a small business, it could be inventory management, it could be supply chain, it could be better payment systems, you’re going to win. That’s Egypt.

South Africa is the one exception. That’s where I live. South Africa has, I think, the third or fourth-best banking and insurance network in the world. Part of it, ironically, is because they were in isolation for 50 years during apartheid, they had to build everything themselves. The world completely turned their backs on South Africa. So the core banking system, the IT systems, exchange control, governance, compliance within the insurance and banking industry in South Africa is world-class. You won’t even think this is an African ecosystem. So FinTech in Africa, when it comes to governance and compliance is where a lot of money pours into. So some of the best Insurtechs in the world are in South Africa. Peer to peer lending, savings and investment, just incredible structures there.

Nigeria is obviously used to be the Wild Wild West of Africa but is now the poster child for innovation. Nigeria, biggest country in Africa from a size perspective, 225 million people. People start coding at the age of 10 in Nigeria. Most of Africa’s unicorns are in Nigeria. Nigeria is a place to build FinTech start-ups and payments. Insurance is not that hot in Nigeria because penetration of insurance is less than 2%. But anything to do with e-commerce, marketplaces, FinTech, Nigeria is really, really strong. Unsecured lending again.

So those are the four big sort of horsemen in Africa. The second tear is Francophone Africa. So Senegal, Cote d’Ivoire, Morocco, Tunisia, the four sort of North African, West African countries. And I say this with old respect, but post-colonialism when the French left Africa, the French still have a very strong presence in Africa from a control perspective. So the French VCs, the French government have tons of programs where they back start-ups in Francophone Africa. Everyone speaks French in French West Africa. They have a single currency. There are 15 countries that use…it’s called the Central West African Franc. So even though there are 15 countries, they operate as one economic unit. So Francophone Africa is a really attractive market. Francophone Africa had its first unicorn just two weeks ago, a company called Wave that Sequoia invested in. They were valued at $1.7 billion. And they are what? Five years old. So Francophone Africa is sort of like the second tier. And then you’ve got other countries around Kenya, so Uganda, Rwanda, and Tanzania that sort of fill out. And of course, Ghana, which is Nigeria’s neighbor next door. That’s sort of how it spreads out across all these different geographies.

Meb: So you guys have had some pretty monster returns from some of these early names? I mean, I’m looking at like 10 baggers, 100 baggers, there might even be 1000 baggers, I don’t want to jinx it. But talk to us about a couple of names you guys have been investing in the last year. I think it’d be interesting to hear a little bit about what sort of start-ups that you guys have found to be particularly interesting or doing some cool stuff.

Zach: I’ll give you a few examples. I’ll try and give you examples of ones that aren’t obvious. So the obvious ones are FinTech. So we had a really cool investment we managed to, an unsecured lending platform in Nigeria called PayHippo. So they do small loans of $100 or thereabouts to small businesses. It’s entirely digital, it’s mobile-only. So it’s similar to Tala and Branch in the U.S. They just recently went through Y Combinator. We invested $100,000 in them at a valuation of $67 million about six months ago. They’re now valued at 25 to $30 million. They’ve had significant growth in their loan book. That’s a really cool start-up.

There’s another start-up that does an AI-powered platform for debt collection. So it works one level below. So all the banks and the unsecured lenders that struggle collecting loans on 30, 60, 90-day overdue loans, instead of just using call centres, which is what most banks do, they use a chatbot that understands the difference between someone’s willingness to repay a loan versus someone’s affordability. If someone just wants an extension on their loan or lower interest rate but can still pay it back, that does not mean that you write them off. So it’s sort of like an AI ML-based tool to improve debt collection. I mean, these guys went from like $5,000 in monthly revenue to almost $100,000 in monthly revenue in just seven months. But that sort of growth can be completely explosive if you understand how to benefit the market.

Another completely sort of left field, not FinTech investment we did, a company called Cloudline that we invested in about six months ago. So some folks, you may have heard of a company called Zipline. I think Zipline’s based in San Francisco, but their target market and operations are almost entirely in Rwanda in Africa. And they use these drones to help deliver blood and other emergency medical supplies to hospitals from anywhere in Kigali, the capital of Rwanda. I think they’re valued at like a couple of billion dollars. And we invested in a start-up called Cloudline that takes that model one step further. And what they do is… So drones by definition and by their latency, have a limited flying span. Payloads don’t really go more than 20 kgs at best. But what’s cheaper than a drone and has a much longer lifespan? Well, helium balloons are. So they use literally old-school Zeppelins filled with helium but powered by a lithium battery to basically take emergency medical supplies, even vaccines, and flipping delivered vaccines using these helium balloons.

And because you only consume power during vertical takeoff and landing, but whilst you’re flying horizontally, the helium does all the torque and the thrust, you almost spend nothing from an energy perspective. So the UN, UNICEF, the World Health Organization are all over these guys. They have pre-revenue, but they’ve done a whole bunch of beta tests. And they were built in a lab in South Africa, literally 20 miles from where I live. So the one thing I’ll say is similar start-ups in, I mean, we invested in a company in Nigeria called RxAll. There’s a big problem with fake drugs, not just in Africa, but all over the world, where the chemical composition of drugs is not what the label says. And typically, you would check that with like a full-on spectrometer in a lab, but who has $3,000 for a spectrometer? So what these guys did is they created a mobile spectrometer that passes UV radiation through a pill or a batch of pills and can tell you what percentage composition the pill has, and if it meets what’s said on the tin, for lack of a better word. And then they use that data to then deliver drugs to pharmacies, hospitals through an online platform. The market for fake counterfeit medicine in West Africa alone is about $10 billion and they’re tapping into that market.

So I guess the overarching theme is I could give lots of examples of really cool companies we’ve invested in, but the common theme is that in Africa because there are less nice-to-have problems and more must-solve problems, technology can go a much longer way to have a lot more impact and deliver ridiculous returns. And that’s why I love doing this shit, is because I know that by investing in a company like Cloudline, I know that folks in rural parts of the world can get their vaccines or their meds through fucking helium balloons. And people can get better medication through anti-counterfeiting mobile spectrometers. Whereas there are quite a few start-ups in the U.S., but no offence, that aren’t really making a dent in the universe but they get sky-high valuations and they make things, you know, better but it’s not solving problems.

Meb: Come on, to be fair, they’re helping Google sell ads more effectively. So don’t give them that hard of a time. We’re starting to see the world take notice. I think part of it is some of the company’s graduating the unicorn status, part of it is M&A with people like Square and others starting to buy companies and partner in Africa. How much of the environment has changed in the past few years? Because certainly in the U.S., you’re seeing the early stage seed, pre-seed over the past three to five years, take almost like an exponential shift in valuations and money flowing in. Is that something you’re starting to see or not so much?

Zach: Just the last couple of years, Meb, I have seen such a huge influx of capital and time, that’s also important, into African tech start-ups. When I got here in 2011, there was $20 million of VC. Last year, in the midst of the bloody pandemic, we had $2.5 billion of venture money in Africa. This year, in the first six months of this year till June, we’re already sitting at close to 2 billion. So we’re on track to do close to $4 billion of VC.

Meb: Is most of that in the later stages?

Zach: Yeah. Most of that is series A, B, and C. So I’d say about 75% of that is A, B, and C, and beyond. But you’re seeing a sizable amount going into pre-series A companies as well. And we’re one of the funds that’s sort of pioneering that. But the reason why you’re seeing a lot of activity is because the size of these problems has gotten bigger, and large corporates and governments have realized that you can’t solve healthcare by building more hospitals. You can’t solve education by building more schools. You can solve education by building more Coursera and more Udemys and building more Zocdocs. There has been a shift… There are tons of private equity firms that are now saying, “Gosh,” to their LPs, “we’re going to reallocate some of our capital to venture.” You have asset managers. I mean, we have banks. One of our LPs, I can’t disclose it now, because it’s still in final DD, is a large bank in Africa and they want to put a couple of million dollars into our fund. And they would never have thought about VC as little as two years ago because it’s become the new normal. People aren’t going to supermarkets, they’re ordering stuff online. People aren’t going to school, they’re studying online. So there’s a natural flow and a supply of capital into VC in Africa, which I think is only going to get more and more and more. And there’s going to be less money going into mining, construction, telecoms, and manufacturing, which is… I mean, the private equity industry in Africa has had no shortage of capital. Let’s just be very clear about that. So BlackRock, KKR, Carlyle, all the big private equity firms, they’ve had no trouble raising Africa funds, because Africa has always been very sort of primary economy-driven, minerals, resources, manufacturing, construction, etc. That is slowly shifting to tech.

So I see this as something that is…this is the tip of the iceberg. And with that, by the way, comes more M&A. So Stripe acquired Paystack last year for a couple of hundred million dollars. I mean, Stripe’s valued at $170 billion. That war chest is not drying up anytime soon, and they’re going to be acquiring a lot more companies. And more acquisitions means more returns to early investors, and that means more investment. It’s sort of a good but vicious cycle. So we saw a lot of exits last year, we’re seeing a lot more exits this year, and more exits means more happy LPs, more happy GPs, and more funds.

Meb: One of the cool parts about your fund is, one, it’s a relatively lower minimum. So individual LPs can still get in as opposed to a lot of these that have a million or 10 million. But one of the unique things that I saw that I haven’t seen much in your world harkens back to the Warren Buffett’s style partnership, which is you guys have a hurdle rate. What was the decision for that? I mean, that’s a little atypical in VC land.

Zach: It’s atypical in VC in the U.S. So the majority of U.S. funds have no hurdle, but most European VC funds have an 8% hurdle. It’s just because Europe is a lot more conservative than the U.S., let’s be honest. But we have a hurdle rate simply because most LPs are still pretty traditional in their returns. They still view Africa as a risky portfolio investment. So having your hurdle gives them a bit of comfort. The only real difference is that, if it’s a $10 million fund and the hurdle is 6% annually, you have to return $13 million before you start sharing in the upside, versus you have to wait until you return capital.

So it’s not a big thing to give up. So we were like, “Sure, let’s have a hurdle of 6% annually and then we start sharing in the upside as soon as the hurdle is met.” But unlike the U.S. where most funds require you to be an accredited investor, so you have to have assets of at least a million dollars or have an annual income of $200,000 or more over a certain period of time. With our fund, the way it’s set up in Mauritius, you could invest… Our minimum is $100,000. So you could be an LP in the fund for as little as $100,000. And that opens such a larger universe of people that want to invest in high growth, high impact ventures. They want liquidity but they don’t have a million dollars lying around. So I think it’s super important, especially the young millennials that I see. Thirty percent of our fund are American LPs and they’re like, “We want to invest in Africa. We want to invest in Latin America. But we don’t have half a million dollars.” And I don’t want to just put my money into Tesla and Amazon. And you can’t ignore the social-environmental impact element. I know it sounds all fluffy and fuzzy and airy-fairy, but the reality is, if you put capital to work in industries like HealthTech, EdTech in Africa, there is a very tangible impact. And young conscious investors need that and want that. It’s like investing in Exxon versus investing in Tesla. You want to see that in everything you do.

Meb: Quick question, when do I come to visit South Africa? What’s the best time of the year?

Zach: The good thing is when it’s snowing on the East Coast, it’s nice and sunny here because we’re down south. So the best time is between sort of October and March. Yeah, it’s stunning. It’s usually between sort of like 20 degrees and 30 degrees Celsius most of the time. And it’s beautiful, very nice. Yeah.

Meb: Do you guys hold any events or maybe partnerships still with the accelerator, etc., that are particularly good times to come or that are on the schedule? Is the world doing that even yet?

Zach: No, no, we are. I mean, things have gotten a lot better. November is the hot month for events. I think at least four or five massive tech start-up events, entrepreneurial events in South Africa then. There’s one I would highly recommend, it’s called the Africa Early Stage Investor Summit. That’s happening at the end of November in South Africa, in Cape Town. There’s another big event that happens, I think it’s in-person this year. It’s called Super Return. It’s predominantly…

Meb: Great name.

Zach: …from private equity. Yes. It’s been running for about 10 years now. It’s a VC and private equity conference that attracts all the big LPs that have assets in Africa. And another one called Africa Come, also in November. So sort of between sort of mid-November and early December is when you have a whole bunch of events. And it’s also super nice from a weather and climate perspective, so.

Meb: Sweet. I need to get there…

Zach: And we love folks to come down. Yeah.

Meb: On the to-do list. And I’m sure you’re going to get a lot of people after listening to this that are in the same boat. What’s the future look like for you guys, Zach? As you look out the horizon in one, three, five years is it sort of continue to raise some more funds? Are there other things you’re kicking around in your brain? Are you going to start to just travel the world and play guitar? What’s on the horizon? You got a couple of start-ups of your own running around the house, I hear too, so.

Zach: Listen, I’d love to do the whole travel the world. I’ve actually been to 67 countries, which is a lot more than most people have in their lifetime. So this is fund one. I mean, I’ve run an accelerator fund before, the Startupbootcamp. This is a $25 million fund. We’ve got a small amount remaining. We’ve got just under $5 million left in this fund. We’ll deploy in the next year. And then fund two will be at least $200 million because it will be seed and series A. Like I said, our goal is to become the top VC fund in Africa. We’re getting there. I would love to see more successful and impactful tech ventures come out of the continent and be a shining beacon to their counterparts in the U.S. and Europe and the rest of the world. So that’s the game plan.

Meb: As you look back on your career, what’s been your most memorable investment? Doesn’t have to be a startup. It could be good, it could be bad. But is there anything that’s seared into your brain? Was it loading the boat on Lehman stock before you went on your walkabout? Any ideas?

Zach: Gosh, that’s such a good question. I’ve got so many investments. I made about 30 investments as an individual, in addition to the sort of 70 odd through the funds that I run. it’s hard to say, but I would probably say the best bet I took was when I invested as the first investor from the African continent into Flutterwave. Flutterwave is now a billion-dollar company. Four years ago, people were laughing their socks off. My own dad and mom were like, “What the hell are you doing investing $10,000 into Flutterwave? Like what are they? Like a payment company in Nigeria? Isn’t that the country where people have, like, the most amount of scams with like stealing your money and shit?” And I was like, “No, I actually understand how banking API’s work. Blah, blah, blah, blah, blah. They’re growing at 10% week on week. They went through YC. Just I know, I have a good gut feeling about this.” And four-and-a-half years later, they are valued at a billion dollars. It’s just a good story because I just love dispelling myths about bureaucracy, corruption, geopolitical shit. And the more positive stories you have coming out of a continent like this, it’s just doing good as good business. That’s an example.

But on a personal front, the one thing I will say is one of the best investments that I ever did, doesn’t involve money, was taking the time out to learn a musical instrument. This sounds bizarre, but I can tell you now founders stress is such a real thing, and mental health is such a massive problem. I’m sure you know this, it’s huge in the U.S. But even in Africa, I mean, founders struggle with depression, with anxiety, with stress, and they have no outlet to release that stress. They have horrible family lives, almost non-existent relationships with their spouses and children. But if you have something like music or writing or meditation or something to just keep your mind and soul happy. I play the piano for an hour almost every day. I do gigs. And it just helps me. And ironically, it helps me make better decisions when I look at deals because I can use my sort of creative right brain and balance out the analytical part of my left brain. I’ve always said to people, find a hobby that’s not just a hobby, but something that you really love, and try and be fucking good at it. And that’s a good way. So that’s the best investment I made, was just investing in a passion that does not pay my bills. If I’m getting paid for my gigs, yeah.

Meb: The concept of balance is hard for entrepreneurs. I mean, being an entrepreneur is the hardest job on the planet. Listeners are sick of hearing me say this, but we always say the best compliment you can give an entrepreneur is they just simply survive. They are still in business because so many fail as a normal reality of it. And that’s so stressful. And a lot of people, I think go into it thinking they know that it’s going to be stressful, and then don’t mentally prepare to have the balance that you referenced. Whether it’s surfing or hiking or meditating or music, whatever but…

Zach: I mean, pick your poison, right?

Meb: Yeah.

Zach: Of course.

Meb: Zach, this has been an amazing, whirlwind overview of everything that’s going on in your world. If people want to find out more, they want to invest, they want to hear your writings, they want to come grab a coffee in Cape Town, like, where do they go? What’s the best places?

Zach: I’m super reachable. I give my WhatsApp number out to everyone, to my chagrin. But I’m at zach@launchafrica.vc. I’m on Twitter, @Zach_CPT. I’m on LinkedIn, Zachariah George. And our website is launchafrica.vc. I will always take a meeting with someone. I will make time for them. I never ever say no to a meeting with an entrepreneur, because you never know what can come out of it. The other day, I had a meeting with a random entrepreneur that was referred to me from someone else. The guy makes coffee. He makes fucking good coffee. And now he makes…it’s called Minimalist Chocolate, which is literally chocolates with just cocoa and milk with the perfect combination, no sugar, nothing. And it’s selling like hotcakes here. And he’s now expanding to the U.S. And I met him for coffee and he’s like, “Come have coffee at my coffee shop. I make my own coffee.” And the next thing you know he’s raising money from Silicon Valley VCs for this concept called Minimalist Chocolate. How can we have as little ingredients as possible in a bar of chocolate? And people love it because it’s conscious, it’s eco-friendly and it’s tasty. So yeah, I never say no to a meeting because you never know what can come out of it.

Meb: And worst case, you could get a delicious bar of chocolate. So I mean, come on.

Zach: Yeah.

Meb: Well, listeners, we’ll post all these resources we talked about a lot in the show note links, some of these conferences and places to find Zach. We’ll see if we can pull his arm, twist his arm into sharing some of his research because it’s incredibly comprehensive on everything going on in Africa. I think I’ve learned more about reading through your deck than almost anything else. So I look forward to meeting you in person. Thanks so much for joining us today.

Zach: Thanks, man. Have a good one. Okay, take it easy.

Meb: Podcast listeners, we’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us feedback at feedback@themebfabershow.com, we love to read the reviews. Please review us on iTunes and subscribe to the show anywhere good podcasts are found. Thanks for listening, friends, and good investing.