Episode #359: Africa Startup Series – Aaron Fu, Sherpa Ventures, “We Really Care About The Ability of Our Businesses To Uplift The Other Businesses in Africa”

Episode #359: Africa Startup Series – Aaron Fu, Sherpa Ventures, “We Really Care About The Ability of Our Businesses To Uplift The Other Businesses in Africa”

 

 

 

 

 

 

 

Guest: Aaron Fu leads growth at emerging market inclusive tech focused Catalyst Fund and is a general partner in Africa focused founder backed pre-seed fund Sherpa Ventures. He also co-founded Venture for Africa, a fellowship for talent on the continent and beyond to gain experience and build careers with early stage African startups.

Date Recorded: 9/14/2021     |     Run-Time: 1:05:40


Summary: In today’s episode, we hear from someone who’s seen the evolution of the African startup scene since he first moved there in 2015. We talk about the factors behind the explosive growth the continent has seen in the past few years. Then we hear what led Aaron to launch his own fund last year and the stories of companies he’s funded, which exemplify both the opportunities and challenges they face.

As we wind down, Aaron shares the difference between the startup community in Africa and Silicon Valley.


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Links from the Episode:

  • 0:39 – Sponsor: Masterworks
  • 2:40 – Intro
  • 3:26 – Welcome to our guest, Aaron Fu
  • 5:53 – Aaron’s initial interest in the venture space
  • 7:29 – What Aaron’s been up to the last few years in Africa
  • 8:32 – The trends and catalysts that lead to tech infrastructure abroad
  • 11:20 – Investigating pre-seed opportunities in Africa
  • 16:40 – The philosophy behind Sherpa, what they look for, and where they focus
  • 19:17 – Main industries and themes Sherpa invests
  • 20:32 – What micro-merchants are and the thesis behind them
  • 22:20 – Overlap and consistent themes across emerging markets today
  • 24:45 – Are there mostly unique businesses or clones of big winners being built?
  • 26:39 – Unique differences of venture capital in a country without much VC history
  • 29:27 – The changing nature of the competitive landscape
  • 31:24 – KOA | Make better money moves
  • 34:00 – Episode #337: Professor Richard Thaler, University of Chicago
  • 35:01 – The main customer acquisition approach for a company like KOA
  • 37:17 – How difficult it can be to expand a company across the African continent
  • 39:58 – Spark Energy Services: energy efficient and captive solar solutions in Africa
  • 43:52 – Starting up multiple funds and building momentum behind Sherpa
  • 45:28 – Other ideas he’s toying with that he’d like to see come to life
  • 48:04 – What Venture for Africa is and how to get involved
  • 50:49 – Predictions for the coming decade
  • 55:08 – The main hubs receiving venture funding in Africa as of late
  • 56:32 – Whether or not Egypt should be considered part of the African tech boom
  • 58:05 – Aaron’s most memorable investment
  • 1:00:12 – Learn more about Aaron: sherpa.africa; aaron@sherpa.africa

 

Transcript of Episode 358:

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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.

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Meb: What’s up, everybody? Another amazing episode today in our African startups series. Our guest is a general partner for Sherpa Ventures, which focuses on pre-seed investments across Africa. He’s also the co-founder of Venture for Africa, a fellowship for those interested in working for early-stage startups in Africa. In today’s show, we hear from someone who’s been there for the evolution of the African startup scene. We talk about the factors behind the explosive growth the continent has seen in the past few years. Then, we’ll head to what led him to launch his own fund and the stories behind some of the companies he’s funded, which exemplify both the opportunities and challenges they face. As we wind down, Aaron shares the difference between the startup community in Africa and Silicon Valley. Please enjoy this episode with Sherpa Ventures’ Aaron Fu.

Aaron, welcome to the show.

Aaron: Thanks so much for having me, Meb. Excited to chat.

Meb: You are a citizen of the world. Where do we find you today?

Aaron: I’m actually sitting in Paris right now, just got in a couple of hours ago.

Meb: How is the city of lights? Is that the city of lights? Did I just mess that up?

Aaron: It is the city of light. It is bursting with light and life.

Meb: Yeah.

Aaron: Yeah. Summers in Paris are out of this world.

Meb: Sweet. Well, we’re going to be talking about lots of stuff today, startup investing. But you’ve kind of been all over, Australia, Czech Republic, Singapore. What was sort of the timeline for you? Give the listeners a little background because I want to hear how eventually, you landed on the continent of Africa to be spending a lot of your time. But give us the Aaron preview.

Aaron: Well, when I was a little child, I had a dream to live on every continent in the world. And I’ve so far been trying to spend five years in each continent. I pretty much have South America last to go.

Meb: That’s a pretty good finale.

Aaron: Yeah. I think it’s a nice little thing to cap it off. But I always had a deep interest in emerging markets and I guess more importantly, sort of the solutions that we can build to solve some of the more pressing problems. I think working in the Czech Republic as a start to the career was certainly not a true emerging market in the sense. But I already saw an opportunity to rebuild banking products and rebuild sort of like retail products in a way that had never been done before because they had never sort of seen that kind of approach. And that’s sort of what really excites me about Africa, like getting to build and addressing systems from scratch basis, like technology that we have today, getting to build payment systems based on the technology that we have today, and not really have to deal with a lot of that legacy stuff. A lot of developed economies are taking so long to transition from cards. I think having a bank statement is really, really exciting.

So I actually grew up in Australia for about 10 years of my life. And then like I mentioned, my first ever job in the world was actually in the Czech Republic. I sort of like gave my friends and family a bit of a choice. I either did Society General in the Czech Republic, or I would join the Afghan International Development Bank back then based out of Kabul. And I think everyone strongly urged me not to do Kabul, which is why I ended up in the Czech Republic. And since then, I spent some time in the UK and then moved back to Asia for a little bit, and then got myself transferred to Africa to lead digital financial services for Standard Chartered across a couple of markets, and then saw way more innovation happening outside the bank than in the bank, and that’s kind of when I made a switch.

Meb: That’s great intro. So give us a little context, what year would this have been and what was sort of the initial focus for you?

Aaron: The very first venture firm I joined in Africa was a firm based out of Hong Kong called Nest. This was back in 2015. And our thesis at the time was to try and invest in entrepreneurs and startups in Africa, bring them across to Asia. What we saw was that from a demographic point of view, there were a ton of similarities. We’re talking about primarily agricultural-based economies, very young populations, rapidly urbanizing populations, very high mobile adoption, but still sort of like the population that sort of spread across a pretty large geography. So we thought to ourselves, “Wouldn’t it be cool if instead of Africa importing technology, which is kind of where it was before and then now it’s kind of in the space where it’s building its own solutions, what if Africa could actually export technology and export solutions to the rest of the world?”

So our thesis was to try and do that and bridge them across Asia. We were very lucky that in all four investments that we’ve made, all of them managed to secure significant contracts with banks, insurance companies, and things like that in Asia. But of course, I think a lot of the Asian banking partner that we were working with were very surprised that, like, technology like that could come from Africa because I think the perception of, like, what Africa is, it’s like it’s all about aid, it’s all about poverty, it’s all about war. No one really thinks that, like, the light touch mobile analytics solution that can power my next generation of customer acquisition could come from Ghana, as an example. So we faced a bit of an uphill climb there. But, yeah, that was kind of my first thought.

Meb: And so, walk us forward. So you guys, I mean, that feels a little early. I mean, we’re seeing such a massive, in my opinion, interest in sort of early stages of a boom in Africa, in that ecosystem. You’re starting to see some of the big headline names with M&A and companies going public, but not as much in 2015. So, take us forward. What was the initial jump, because you got about two or three different things you’re working on? So walk us forward to present day, last few years, what you’ve been up to?

Aaron: Absolutely. I mean, before we leave the point on sort of where it was before, I definitely remember that back in Kenya at Nest, being able to raise a $500,000 round in a year was considered really fast and a lot of money. If you had gotten to that level, you were sort of 1 of 10, 1 of 5 stand-out companies. These days, every month, you see sort of like 5, 10 companies that raise a million in like less than 30 days. So I think the evolution has really sort of gone leaps and bounds in the last five, six years.

Meb: Was there any sort of specific, as you look back on it, catalyst, or was it more of just like a snowball effect of, like, gaining critical number of engineers and people interested in the ecosystem, people getting comfort exit? Like, was there anything in particular that you think caused this change or was it more just a natural evolution?

Aaron: I think it’s a confluence of a ton of factors. And I think I wouldn’t do it justice by generalizing too much. But here are a couple of trends. So, A, I think, seven, eight years ago, there were a number of technology companies, but there weren’t really sort of a ton of real startups in the way that the rest of the world understands them. And that sort of base layer wasn’t quite there yet. MPesa was…the mobile money systems were beginning to get a bit more entrenched. But the APIs weren’t really open, so people weren’t really building on top of that to sort of, like, take it a little bit further. So I’d say that from an infrastructure kind of side of things, maybe things weren’t ready.

I also think that now with people having building technology companies and actually failed a couple of times, you’re now seeing people who have built tech startups two or three times in a row and are now building their third or fourth, which really changes how they’re approaching fundraising, as well as building and growing their teams. I think also, from a talent perspective, you’re now seeing, with all the recent stories as well, like a ton of really, really amazing people who have either moved across in their generation or a few generations ago to Europe, to the U.S., like, really see coming back home and building a startup back home to be a very viable and lucrative and attractive option.

I think all of these factors are a couple of accelerants, obviously. So I think on the talent front, the sort of Black Lives Matter, sort of protest really, sort of integrate a lot of people to like, “If I’m not welcome here, maybe I should really go back to where I feel a bit more comfortable and more at home.” I think on the capital front, you really began to see more and more, I guess, global players start really poking around in Africa. And a few of those deals really worked out. I think Twiga, by far, in Kenya. So Grant is a good friend. He sits on the investment committee at Sherpa Ventures. I think he really put Kenya on the map in many ways and forms. He was able to attract investors that had never looked at the continent before. He was able to prove the opportunity in serving mass market, micro-merchants, and working in the ivory sector.

And, yeah, I mean, people had come before him to do very similar things, but I think the kind of level he was able to take it to, and the kind of team he was able to build, and the kind of investors he was able to bring through was very much sort of that shining light in the ecosystem. Obviously, there were many that came before. I don’t know, I love using this sort of Star Trek analogy, right, where the rest of the galaxy didn’t really pay notice until a ship hit light speed. So you need sort of a couple of those ships to, like, actually hit light speed to have the rest of the world pay attention. And then I think it took Africa a while to get to those few.

Meb: Yeah. Well, it definitely feels like it’s reached an inflection point. All right, so post Nest, keep taking us along the journey.

Aaron: Yeah, sure. So post Nest, I was really curious because we were sitting sort of more at the seed, post-seed kind of space. And I was really curious about why the pipeline was as thin as it was at the point in time, why weren’t there more companies with global ambitions? Why weren’t there more companies that were thinking about other emerging markets and not just selling up to the UK or selling up to Europe? And so I decided to investigate that a little bit further. And that was when I joined Nest, which was a pre-team, pre-idea incubator based out in Ghana. And so I was really curious about like what happens pre-seed, right? Pre-seed is basically like pre-team, pre-idea, and what happens at that juncture.

What I really was curious about with Nest’s model is it took just raw talent from all across the continent, flew them into Ghana to live together, work together, build product together for an entire year. We see programs like… and Entrepreneur First do that over a three to six-month period. In this scenario, it really is a whole year. And it’s almost like a year-long festival, where they literally are embedded in each other’s lives. The model then was to try and invest in a few of the companies that would come out of the incubator, but then also really force them to experiment, force them to look at different types of sectors, different types of business model, reconfigure their teams over the course of the year. And it was really exciting to see like an Ivorian, and a Kenyan, and a Nigerian, and a South African get together in the same team to figure out what’s interesting to build on the continent and what’s interesting in terms of like commonalities across their markets that they can sort of get a bit of a head start in building a pan-African firm.

So that was for a little bit of time. And then I also helped the African Leadership Academy, which is one of the sort of leading innovative high schools in Africa build on a debt fund as well because I was also curious about the role of sort of like catalytic capital in the sense, if we’re able to offer a bit of debt funding, which is first loss, which will, you know, take a lot of the due diligence burden off Angels, would that inspire more people to invest into young entrepreneurs.

And right now, I spend most of my time at the Catalyst Fund, which is an inclusive tech accelerator across Latin America, Africa, as well as Asia. A large part of our portfolio is in Africa. And the way we work is through a combination of very generous grand capitals, the $100,000 of that, and then $100,000 of like deep venture building support. Some of the things that we do include lending business models, so helping a company build a lending business. We go as deep as to help you build a mobile app if you’re early enough that you haven’t done that yet. So really, really, really quite hands-on. Then we backed about more than 50 companies right now. They’ve since gone on to raise more than $260 million. And, yeah, some names that you might know, Chipper Cash, Sokowatch. And it’s been really cool to get to work with these companies all across these geographies.

And one of the most exciting parts about the Catalyst Fund is our ability to back similar founders using similar models in Latin America, Asia, and Africa at the same time. And having them discuss the challenges that they are facing with their models is very, very fascinating. In December last year, I also launched my own fund. So Sherpa Ventures is focused on pre-seed just in Africa. We’ve made 11 investments so far. So I used to say we move at the pace of about a deal a month. But I think we’re going a little bit quicker than that.

We try and be like first capital in. So we usually find ourselves among a group of Angels. And we see our role as being sort of like that added layer of institution to sort of like help these angels do their due diligence before. We’re very proud of our LP base as well. So most of our LPs are actually founders and operators of startups in Africa and in broader emerging markets. That’s one core group. Another core group are individuals who have invested heavily across Asia and the Middle East. I have never written Africa checks. And so I’m looking to sort of explore that a little bit more. And as a result, we get very hands-on with the teams there too because these are people who have either seen the same business model elsewhere or have actually built the same business model in another geography in Africa too. So I’m really excited about that.

Meb: And there’s a lot of different ways we can go. We’ve had a couple of the portfolio companies you mentioned, Chipper. We had Ham on the podcast. And that’s fun because it was kind of midway through their rocket ship part of their journey and then market smile identity as well. And it’s been fun to kind of hear their stories. But talk to me a little bit about Sherpa and you got this framework. I mean, I’m thinking in my head of pre-seed in a place like the U.S. which is hard enough. You don’t have a whole lot of analytics. You don’t have a lot of traction to speak of. Explain to me how that whole process works. I mean, being with experience at an accelerator, you’ve certainly have had a little bit of time to kind of get a feel for that, not just as a concept but also on the continent. So just walk us through. Tell us a little bit more about it. What do you look for, other red flags, green flags, all that good stuff?

Aaron: Yeah, for sure. And very keen observation that like certainly, we’ve taken in a lot of our learnings from the other programs and funds that we’ve run. So, obviously, we have very little traction to look at. We spent a lot of time on Tim. So at investment, we were interviewing potential entrepreneurs to join the program, that was all we had. We had individuals. So how do you explore someone’s sort of like drive, ambition, and sort of like what they want to do with their lives? That’s a huge part of things. Even my time at the Africa Leadership Academy really helped as well because they pretty much assess human capacity too. So we took a lot of learnings on that. I can definitely share that like more than 50% of our investment committee meetings really focused on like the team’s potential, how they work together, their past experiences, and how they approach just life and problems, right? So that’s a very, very huge part of it.

I think traction for us is not necessary. But traction is an interesting proxy for, like, what have they been able to achieve in such a short time and how they talk about it. We spend a lot of time as well on sort of the market potential, the market that they’re in. So how large is the market for primary health care? How large is the market for payments between the U.S. and Nigeria, for example? That’s because that tends to correlate a little bit with like what we need to look for in terms of domain expertise. So we need both those things to be locked in place. Where we don’t spend so much time on is really just the model because at that point in time, we think the model is going to change significantly, even within the next 9 to 12 months.

So while we don’t spend so much on the validity of the model, we spend a lot of time thinking about how the team thinks about the model and how they crafted it, what were the data points that they use to get there, and how they’re thinking about adjusting it going forward? We look a lot for that flexibility. Many founders don’t really like confronting the fact that their business is going to change dramatically in 12 months. So we try and really find ones that get it, that they’re not hung up on their approach and their methodology and the attack and just be open to listening to the market, listening to the customer, and listening to the data. So we spent a lot of time on that too.

Finally, I think this is a much lighter lens, but we also look at how we can value add into the company. So will our links with certain large corporates, governments, and other organizations help them in their push and help them in their scale? Are they looking to hire in areas where we have deep networks? And are they looking to fundraise from the kind of investors that we already have arrangement with to sort of follow on from our portfolio too? So those are sort of some additional factors. But, man, like half of it really is just the team and how they vibe because, again, like it’s a 5 to 10-year relationship. We do it as well. So we really, really want to make sure we’re working with the right people.

Meb: What are some of the main industries’ themes? I imagine there’s been a lot of fintech. What else has been some of the ones that are popping up the most that you’re interested in and are funding?

Aaron: So our broad thesis at Sherpa really is businesses that help other businesses do better, which inevitably lends itself to a lot of fintech because a lot of businesses see their primary problem to really be around payments, or accessing lending, or collecting payments from their customers, or even keeping track of these payments. So there’s a lot there. But I think on top of payments, we also love looking at logistics. We love looking at SaaS software that basically helps them run their business in a better way and as well, technologies around health care and even servicing like their employees for that matter. So basically, the entire ecosystem around small business, we love looking at.

We try to stay away from consumer more because we don’t have a lot of depth in that or within the team right now, which is also the reason we haven’t looked at Francophone Africa either, which is something that we hope to do more of going forward. But, at the moment, we’re focused very much on Nigeria, Kenya, Ghana, and South Africa. Ultimately, we really care about the ability of our businesses to uplift the other businesses in Africa to do better.

Meb: I’ve seen you talk a little bit about when you talk about businesses, this concept of micro-merchants, MSCs. Do you want to tell us a little more about those and what that means and the thesis behind it?

Aaron: Sure. Yeah. I mean, this is a very interesting sort of sector that we spent a lot of time on. So in my mind right now, there are sort of like two versions of this. One version of this as is more commonly sort of seen or understood are your sort of street vendors, so individuals who have a single kiosk. They might sell sort of more daily goods from toothpaste to bananas, to sanitary pads, to mobile, to prepaid credit. And there are a ton of startups that have done very well servicing this audience. And very often, you see a very thin line between their individual expenses and borrowing habits, and their businesses. There’s almost no distinction between the individual and the business. I think more recently, you’re seeing a lot more social commerce, which to me are also in many ways also micro-merchants.

There are individuals who also have full-time jobs usually, who have been able to find a niche for themselves to access the customer base directly on social or through other digital channels. They might sell something very specific, like eyeglasses, or headphones, or beautifully tailored shirts, or custom sneakers, whatever that is. And I think they don’t yet have the same kind of digital infrastructure that a lot of these micro-entrepreneurs in the U.S. would have, I think about Shopify and a bunch of other services that exist to like really help anyone start selling in their backyard.

So I think this two sort of like categories of micro-entrepreneurs really, really excite us as a team. And in one space, it’s a little bit more developed. There’s a lot more companies working to service them. But I think on the sort of social commerce micro-entrepreneur space in Africa, that’s something that’s only just beginning to emerge and you beginning to see a couple of companies work with them as well.

Meb: Yeah. I mean, it feels like anytime you see…and I imagine, I’d love to hear you comment a little bit and we’ll jump back to Africa specific in a minute, but how much overlap in consistent themes are you guys seeing between Lat Am, Africa, emerging Asia? Is it a lot of the same sort of ideas and challenges or does each have like a totally different set of unique opportunities and roadblocks?

Aaron: One thing I will say is that I think there are a lot of models, which are being simultaneously explored. And I think in some geographies, they’ve just gone a little bit further. So as an example, PayGo is something that has really, really taken off in Africa. And Africa has developed like a very deep sort of understanding of how to develop PayGo solar, or PayGo appliances, or PayGo mobile phones for that matter. That is less developed in Latin America, not because the market conditions aren’t right for it, not because there’s any regulation that’s sort of like prohibiting it, but I think really just because it hasn’t really sort of entered my…sorry it hasn’t really entered this, I guess, and maybe people have tried before. But you are beginning to see a couple of like Latin America-based entrepreneurs push a lot more PayGo solutions. You’re seeing a lot more success there now. And I think some of that is also being driven by the investors that they have, who have also invested in these PayGo solutions in Africa to say, “Hey, we’ve already seen all these models rolled out. This is what’s going to hit you in two years, this is what’s going to hit you in four years. But we think it’s a very exciting methodology to pursue.” So I think that things are just at a different scale of development.

One other sort of like common model that is now emerging across all these markets is on wage access. So we are seeing a couple of those in Indonesia. We’re seeing a couple of those in South Africa. And we’ve seen a couple of those in Latin America as well. And this idea that how do we de-risk lending to individuals is by actually lending to the companies that they work for and only allowing them to borrow as much as they’ve actually been able to make. So if they do default that at least has a sort of larger culprit to go after. That’s a situation where it’s driven a lot by the emergence of gig workers across all these markets. Uber has seen tremendous success across the emerging markets, which has given rise to a lot more of the gig economy and these services are now sort of latching on top of that too. So, yeah, I think there are a lot of commonalities in terms of models being explored. But I just think some regions are just going faster than others.

Meb: How much of it is like that of the startups you see and the ideas? It reminds me a little bit…I see some of the pitches like the old German company, Rocket Internet. They would just take ideas that had been accepted and just take them and use them elsewhere. How much of that do we see in emerging markets and how much of it is unique business models specific to their geographies and development? Is there a little of both or is it all just Uber and Alibaba clones, etc.?

Aaron: Yeah, I think it’s still a little bit of both. There was a bit of a further, maybe about three, four years ago of a lot of businesses that popped up, in Africa at least, that were pretty much clones of developed market businesses, this e-commerce site, this food delivery site. Everything was pretty much a copy. And I think you’ve seen that wave subside a little because people have gotten burned. People have learned their lessons. A lot of these models didn’t work out because they were adopted kind of like wholesale. And very often, they were being run by individuals that had very limited or no Africa experience. They just kind of felt that like Senegal was a new market or Zambia was a new market and had never done this before, let’s see what we can do. So I think that wave has subsided a little bit. And there’s another generation now, who I can say might be inspired by models that have been built as well, but are actually hyper localizing it on the back end.

So, to the consumer, it might seem as simple as clicking a button and getting access to health care or getting access to a loan, but how they sort of like process things on the back end have changed a lot. So there’s a lot of hyper localization, I think. But the models that I think tend to be more resilient and sustainable are sort of like very, very tailored to the local environment. And they might take inspiration from elsewhere. But I think what’s really worked out is just stuff that’s designed for a very specific consumer that’s in market.

Meb: Talk to us a little bit about…I want to get to a few portfolio companies in a minute and just kind of hear a little case study ideas about those. But I think one of the areas that most of the listeners would probably want to question or say…it sounds like a hard problem would be not just at the pre-seed stage anyway. And my God, that’s hard enough, I think, with sort of established VC community in Silicon Valley and elsewhere. But what’s it like in emerging economies, Africa specific, where there isn’t as much of a culture of traditional company, venture capital style investing? Are there some things that stick out as being particularly interesting? Or are the entrepreneurs a similar mindset of risk capacity and building? Any just general thoughts?

Aaron: Yeah, a couple. We alluded to this earlier when we were talking about the evolution of a couple of the ecosystems in Africa, right, where, I think, seven, eight years ago, a lot of the entrepreneurs looking around would only know how to build a tech business that is profitable quickly, does not necessarily hyper scale, doesn’t really think about multiple countries in Africa, let alone like multiple regions. So I think that’s certainly been something to overcome. And I think we’re there. I think that there are much more pan-African communities of entrepreneurs now that are sharing ideas, collaborating, helping each other. There’s a lot more pan-African infrastructure. So as an example, like right now, if you’re integrated with Flutterwave or Paystack, you can integrate with the same team, regardless of whether or not you’re in Nigeria or in Kenya. There might be some tweaks you need to make on the back end, but you’re pretty much set and ready to go. So I think that infrastructure is now ready.

I think what’s most challenging at the pre-seed stage really is just the Angel ecosystem. I think we really wish that it was far more developed. We really wish that there were more local businessmen who have made it, who are willing to take the kind of risk on these entrepreneurs that exists in the rest of the world. But I think that’s fast becoming a reality because there are a ton of entrepreneurs who have built tech businesses, who are beginning to reinvest in the next generation, and are willing to take the same kind of risks that they wish other venture funds had taken on them. I look at Ken Njoroge at Cellulant, like one of the very pioneering tech companies in Kenya that had launched multiple geographies very quickly. He recently stepped down as CEO and his full-time kind of focus now is investing in the next generation of tech entrepreneurs in Kenya. So I think you’re seeing a lot of tech entrepreneurs who are taking the lead, and hopefully, with their stories of financial success, I also pull along other sort of more traditional Angels on there as well. But you’re right. I mean, pre-seed is one of the toughest bits of the valuation to be investing in, especially in these ecosystems.

Meb: I was laughing as you’re talking about it because I’m like, “You better be careful what you wish for.” It’s good not to have a lot of other competitor firms digging in nearby. How much has that changed in the past half-decade? Are you starting to see a lot more traditional venture firms pop up or does it tend to be more kind of like similar to what you all are doing at Sherpa, people that have had experience in early investors there just kind of build out their own shops?

Aaron: Yeah. I want to say that, like, especially over the last 12 to 18 months, there’s been like an explosion of, I guess, collectives. I’m a big fan of Joe and his team and what they’re doing at Hook. So I think the Hook Fund is a misnomer because I think they’ve been really good at engaging diaspora outside the continent actually to invest in the continent. You’ve got Iyin doing a fantastic job at Future Africa, again, mobilizing a collective of angels as well. Rally Cap, obviously run by Hayden and focuses on fintech and again is able to rally a group of operators and sort of like fintech-focused experts into investing in fintech across these markets. So I think a lot of the most recent spike in sort of super early-stage funding is being driven by these collectives, which is very exciting because it’s also like very democratic. It’s really quite cool. A lot of the LPs are much more highly engaged in decisioning process and the sourcing process. And it really is much more like of a movement, which is pretty cool.

That being said, simultaneously, you’re also seeing a lot of veterans like of the space who have been running sort of significant funds before now raising much more capital. I think over the next 6 to 12 months, you’re going to see at least I would say four to six new firms being announced at sort of $50 to $100 million in size of traditional venture. And very often, they’ve also recognized that they need to go early and earlier down the stages as well to sort of secure that allocation or work with early-stage funds like us. So I think on both ends, the collective thing I’m most pumped about because that’s a very sort of new thing.

Meb: So I thought it’d be fun to dig in a little bit. Let’s talk about…and this is dealer’s choice, you get to pick all of your children that you love equally, but we can pick a few just to kind of walk through like an example of a thesis and investment you made, why it’s an especially compelling opportunity. So your choice.

Aaron: Maybe one of the first ones that I want to highlight is a company called Koa in Kenya. It’s a digital savings play. And what really drew me to them was that I had known Alexi and Delilah, their co-founders, for a couple of years before then, in different capacities and have seen them sort of, like, collaborate together on projects. But from a business model perspective, what was very interesting was their positioning around passive savings, so this idea that you could just make a decision at one point and the service would then be able to sweep savings into a separate account automatically, whether you’re an Uber driver. And so you can say 10% of all your earnings goes into a separate account, as opposed to making a conscious decision. Because I think a lot of these markets, it’s been very difficult for a lot of workers to make sort of like planning around their finances, the ability to kind of like force savings I thought was quite cool. The ability to integrate with sort of like larger gig economy platforms, or factories, or large employers of people to then capture the savings for like their entire sort of employee base was very exciting as well.

I think as well with the proliferation of lending apps in Kenya, it was time for something that was a little bit more in the other direction, which would help people buffer. I think often people are forced to borrow because they haven’t had an opportunity to buffer adequately in the right kind of way. So from a sort of financial health point of view, that was a very interesting opportunity to go after too. So that was sort of what was driving a lot of the initial thesis. Obviously, myself, having spent a long time in financial services, understood that savings is very, very, very much in demand. And a lot of what was inhibiting people from savings was just like that sort of ease. Like, I don’t wake up every morning and go like, “I should really save today. I should really put aside X amount of money today.” I don’t do that. But I might do that once a year.

Meb: Yeah. I mean, the automation is such an underappreciated and significant impact. And we love to use this phrase, like it’s not a particularly unique insight but it’s a critical one, and it applies to all the listeners of this show as well on how to automate your finances, and budgeting, and investing, and particularly to the young folks who can get started early. But this is such a good example. We were talking one of my favorite books that just recently got updated to what he called the final edition. Listeners, if you didn’t hear the Thaler episode on his book, “Nudge,” but it’s the exact same concept where you kind of push people, herd them into the right direction, they still got to make their own choices, but automation just makes life so much easier. And you can see that no matter how small the impact on everyone’s balance sheet and savings and investments too.

Aaron: Yeah, absolutely. So I think from a timing perspective, what was interesting for us as well was that we think that the digital infrastructure was also beginning to evolve to support this. So I think one of the challenges, still continuing challenges, in Kenya, has been the ability to pre-authorize payments, which then get regularly made. This idea of pulling payments from an account is generally like quite challenging. But we’ve seen a number of technology providers able to start making some headway there. And hopefully, they will line up just in time for Koa to really scale and utilize that technology.

Meb: And talk to me, so an app or offering like Koa, and it’s rolling out in Kenya, what is the main customer acquisition? Is it mobile-based ads? Is it browser? Or is it word of mouth? Like, what is the way they get to acquire new customers?

Aaron: It’s a ton of word of mouth, of course. And I think they’re very lucky that their core demographic likes making recommendations to each other and likes talking about the kinds of things that they’ve discovered. Obviously, an analogy given to me by a couple of people before was a lot of savers in Africa don’t really care about the return so much as that the money is returned. So being able to trust a digital service provider with your money with full confidence that it will come back, I think a lot of the initial users are going to need to come from word of mouth and sharing. And so, the Koa team has focused a lot on sort of enabling their core users and their core champions the tools that they need to sort of spread the word and to sort of, like, onboard more of their friends and family into it. And I think there’s something pretty magical about, like, having one person be able to share this with their friend group and their friend group is able to ask them questions about it and almost solve the day-to-day problems.

We’ve also focused a lot on sort of media to make sure that in the newspapers, into the regular TV channels it’s also regularly featured because I think that’s where people look to for validation. Like, if you don’t exist on television, or if you don’t exist in the real newspapers that I can touch and feel, are you real? So I think there’s a lot of effort that’s spent on that. We haven’t really looked at billboards with Koa just yet. We’re not ruling it out because, again, it’s a very sort of like proxy to a branch. Instead of having a branch, it’s a physical presence you have, a large sort of like physical billboard. I think, for example, Citibank did this very well with, like, their branches usually have a much larger visual presence than the actual space that they occupy, anyway.

So I think the initial days is much more about trust-building. I don’t think necessarily about Facebook ads or Google ads right now at this stage. I think those channels are really good at getting initial registrations and signups. But to really create sort of like that sticky user that advocates for you, I really think that having someone else introduce them to, yeah, makes much more sense.

Meb: And how easy and how hard is it? I think a lot of people would just assume Africa, hey, it’s like the U.S. and 50 states just with 52 countries. How easy/hard is it to expand beyond the borders for an offering in one country, say, Kenya? Is it an absolute nightmare or they’re saying like, “Well, there are 5 countries you could do it, but 20 you can and 20 are impossible… What’s the sort of regulatory logistical unlock that is required there to be able to really be a continent-wide offering, or is that a total impossibility?

Aaron: It’s hard. I wouldn’t say it’s an impossibility at all. What I’d say is it depends a little bit on the kind of business that you’re in and how deeply involved with regulators infrastructure you are. So as an example, we’ve also invested in Money Africa group, which is a little bit more of a content play, which obviously requires a lot less integration and licensing. But in Koa’s case, because they’re taking deposits and taking savings, licensing regime as you can imagine is pretty rigorous. I think how a lot of startups have been able to overcome that is by working together with larger partners. In Koa’s case, you know, they work with some asset managers, which cover multiple markets across Africa. So with one integration and one relationship, you can kind of like have a partner to help you expand throughout the others.

I think what you’re also seeing with a couple of regulators is that they’re also waiting for someone else to regulate something else for the first time. And very often, if you’re able to get…so, for example, there’s a big push towards getting sort of more facial recognition, verification codified into a couple of these regulatory bodies as being sufficient for new customer onboarding. And you see a couple of like countries take the lead. And then once that’s done, you don’t get other countries kind of say, “Okay, one guy’s done it and we’ll sort of jump in as well.” I think each country is also different. Even within the East Africa community, you can say that language is the same, history is somewhat similar, but the regulatory environment is very, very different. You need fresh integrations when you’re going to Uganda and Tanzania. Very often, even the large banks, they grew by acquisition. So their systems in Tanzania versus Kenya are also completely different. So … you need to do that all over again.

The one region I do want to highlight though is the Francophone region, where they do actually share a common currency. They share a lot of common regulators. And so that’s again why I’m pretty excited about that region in the next couple of years because that is a true example of something where you could start, you know, a payment, you start a Koa in Dakar and then be able to leverage in that commonality a lot more intensely across Francophone than you would in East Africa.

Meb: Interesting. That makes sense. You only got time for one more company you want to talk about and any other startups that got you particularly jazzed recently.

Aaron: Yeah. I think one more I want to highlight that I’m personally like very excited about right now. We actually made our first investment in South Africa only a couple of weeks ago in a company called Spark. And that’s in the solar energy space. And again, like going back to Tim, so Tim Ohlsen, the founder of Spark, actually was previously also the founder of another startup that ended up being one of South Africa’s largest digital utilities. So, you know, he was moving millions of dollars of energy like every year. And he really wanted to build Spark within Eldo, which was this digital utility that he had built. And one day, he decided Spark was so important that he would actually leave his current business, which was doing very well on a trajectory to, like, keep on growing fast to build this out. And so, what Spark does is it brings together the diagnosis of the solar solution that your home or your property needs. Together, we’re sort of the installers, as well as the equipment providers, as well as the servicing. But more importantly, they also provide the financing for it through their current partner, Investec.

And that was sort of a big genius moment when essentially, most of their customers wouldn’t have to pay much cash out of pocket and just be able to say, “Yes, I would like to add solar to my home,” increased the value of it, as a result, increase my power reliability. And obviously, like South Africa has had its challenges with power reliability over the years. And I think that’s really been spiking over the last 12 months as well. And we were very surprised at like, how difficult it was for a regular homeowner to say, “Yes, I want a solar installation and get it all mapped out and on there.” And so I think this solution makes something that we’re very excited about because it makes things so easy. It’s a significant enough problem that like there are a ton of households that have unreliable power that really want reliable power. And we have an entrepreneur and a team that has deep domain expertise in power, in energy in that market.

Meb: What’s the biggest challenge there? Is it consumer adoption? Is it sourcing the build and the materials? Is it the education? What’s the sort of main challenge with scaling that?

Aaron: So I think in the past, it was just if you were left on your own as a consumer, right, that you would have to figure out what kind of equipment do I need? Where should it face? Who’s the best person to install? What kind of equipment? How do I get regular service? And you might not want to pay upfront for it because solar installations can be very, very expensive. And there’s certainly no financing facility out there that has been dedicated to solar facilities as well. This sort of like confluence of making it super easy from you click a button and they’ll figure everything else out for you and put it into your house. We figured out the financing, figure out the servicing. Yeah, I think it just makes things super easy.

I think it’s not a huge leap to think that the same can be applicable to commercial and industrial properties as well. We’ve done a little bit of research. And it seems like even sort of the larger property groups don’t really have sort of in-house solar expertise or renewable energy expertise either to be able to put these in there. And so I think it could be a good product play there too.

Meb: Yeah. I mean, that’s a well-established sort of idea in other countries, I mean, the multibillion-dollar potential for sure. That’ll be fun to see what happens with that.

Aaron: Yeah. And I mean, the good news is that you don’t need to just focus on selling people the sustainable story. I mean, it’s great that it’s sustainable and all that as well. But you really just are going from the perspective of would you like to not randomly run out of power every hour? Like, that’s a very easy kind of sell. And so I think there’ll be very few homeowners that will say no to that.

Meb: Yeah, I mean, anytime you can get the consumer to have some sort of better experience and then later on the other good reasons why to do it and save the money potentially, that’s like the perfect trifecta, right? All right, so you guys, where are we now? Are we in fund one, fund two on Sherpa?

Aaron: Yeah, we’re still in our first vehicle. It’s allowed us to be pretty nimble and agile. And I’m very transparent in the fact that our own investment process has probably evolved about three to four times since we started. We definitely had been pushed to make it a lot shorter. So we moved from eight weeks to six weeks. We’re struggling very hard to get into fourth. So we’re in vehicle one, and we’re looking at vehicle two next year, and vehicle two will, as I’ve hinted earlier, like probably will look a lot more like Francophone as well, probably much more pan-Africa mandate. And we’re thinking very, very intently about what that should look like in the new funding environment. Because when you’re first thinking about putting together Sherpa, our ticket size is up 50k, sort of plus-minus at pre-seed rounds made sense when the rounds were 200k, 150k in size. Now they are much larger.

So we need to scale up together with that. But at the same time, how do we maintain our agility to be able to make decisions quickly when entrepreneurs need that decisioning? And so, perhaps, we’ll have a separate pool of capital that will be a lot more smaller, but also quickly decisioned on. And, yeah, we’re also raising small sort of like add-on vehicle to find one that will just be follow ons into our existing portfolio, because I think a lot of our existing portfolio is doing incredibly well and we want to continue to be able to back them. And we’ve secured pretty significant pro-rata rights in all of them. And then, we definitely want to continue backing these guys going forward. And it’s an opportunity for guys to come in there too.

Meb: Smart, makes sense. I want to hit on a couple other topics before we got to let you go into the Parisian night, which can last late. So, any other particular startup ideas that you’re just chomping at the bit at but haven’t found the right team or founder set, or is that even something you think about? Do you kind of let the founders come to you with the ideas or is there an area where you’re like “Man, if someone just did X, I really want this to happen?” Please, listeners of this podcast, let me know if you’re doing it. Is there anything in particular in that category or sectors where you want to make one you just haven’t?

Aaron: I’d probably say that we would love to make something happen in Last Mile Logistics. And I know many of the listeners out there will say that there’s already a lot happening out there in Africa on this. But I don’t think many of them have really…I think a lot had made a lot of headway. But you still hear of a lot of stories of merchants still going to like riders who are directly contracted or informally organized. And I think there’s something we can do there around either route planning, or vehicle financing, or in the way we compensate the riders to really be able to get to a price point that makes sense to all these micro-merchants. And then why I need the price point is because whether that’s e-commerce or whether that’s food, most of the basket sizes are so small that you’re very limited in terms of, like, what the percentage of delivery fee can be within that. So how can we really get that optimized? I would love to see someone do a little bit of that. It’s very difficult to do. And so, like, you know, I totally understand why it hasn’t. I think that’s something that we’d love to see more action on.

I think the second opportunity that we would love to see sort of more activity on is also in the SME lending space. So we’ve already invested in a couple of companies that are doing this. But I think that there’s still a lot of whitespace. People have come to me and said like, “Is there too much investment in SME lending going on?” Like, well, no. I think there are ones that will focus on working capital. There are ones that will focus on sort of like payroll advances. There are ones that will focus on long-term access to capital and things like that. And I think a bulk of the start-ups right now are focused on just working capital, who is going to be there to really help the SMEs grow over a longer period of time, who’s going to really help them organize their own sort of like financial statements to make sense to other investors too. So I think we’ll continue to invest very heavily in the SME sort of like lending space as well going forward.

Meb: That makes sense. I want to hear about Venture for Africa. What’s that?

Aaron: So one of the most common questions I’ve gotten when I was living in Nairobi was how do I get over there? How do I join one of these, like, cool startups working on building the addressing system of the future? I don’t know anybody there, how do I break in? And at the same time, I was hearing a lot of this and simultaneously, you read all the news of, like, all these new funding rounds being raised. And ultimately, all that funding is meant to go into talent. And most founders I speak to are still really struggling to fill that sort of like middle layer of talent, especially non-developers. So I think there’s a lot of support that they get on the C-suite side of things and there’s a good supply of entry-level talent. But I think the sort of middle layer is a bit of a challenge.

So that’s kind of where Venture for Africa was born. It’s a three-month fellowship for individuals to test out if working in start-ups in Africa is for them. We focus on roles in product, analytics, strategy, finance, marketing, as you can see, anything that isn’t a developer. And we focus on individuals with sort of like seven to eight years of experience. What really surprised us in terms of our core groups or fellows has been one of our core groups now is actually people that are already on the ground in these markets. They’re just sort of locked away in mining companies, and telcos, and other more traditional enterprises. But they’re very curious about what’s been happening in the sort of tech boom. And very often, what you also find is that they just aren’t in the same social circles or like education backgrounds and whatnot as like a lot of tech founders in these markets.

When I founder comes to me and says, “I can’t find a good head of finance in X market,” I’m like, “You probably just didn’t go to school with them, or you probably just, like, you don’t know anyone in mining. So let’s make that bridge happen.” And obviously, there’s a lot of diaspora as well, who never spent a lot of time on the continent. And for them to say, “I’m going to pick up my bags and never look back,” I think it’s a hard thing for a lot of people to do that I think to say yes to a three-month fellowship and sort of try it out, see how they go I think that makes a lot of sense for sure.

And, yeah, so it’s a program, which we’ve had a lot of success with. We’re on our fifth cohort now. Almost every startup we work with has come back over and over again. With a number of the companies that we work with, they’re on our fourth or fifth fellow now. So it’s all very exciting. And I think as the sort of funding surge continues in Africa, talent is going to be really, really important to get right into all these companies too because money is not really going to be worth anything if you can’t spend it on the right people. You can only buy so many MacBooks.

Meb: It’s actually it was like Apple day today. So that topic was timely. And I think people were really upset there wasn’t any big MacBook Pro announcements.

Aaron: I’m really upset.

Meb: It was all iPhone.

Aaron: Yeah.

Meb: We put your binoculars telescope on, look to the future, the horizon. So let’s hear some Aaron predictions for what does the future look like for Africa and startup funding? And you guys, if we go 3, 5, 10 years out, what do people not appreciate, or what are some areas that you think are probably not commonly held belief in your mind that other people are unaware of? Just predict the future. Easy task. Easy question. What does the future look like for you guys in Africa?

Aaron: Yeah, super easy task. I think maybe staying on the investing side of things, I think Africa is going to become a core part of any emerging market fund in the world within the next five to six years. I think people forget that, you know, there was a period of time when investing in Asia, investing in China, investing in India was a very fringe like activity, let alone investing in tech in those regions. So I think Africa is well on its way to becoming a core part of those portfolios. At the moment, I think a lot of firms are still treating it as an experiment, and they’re still testing the waters. But I think in five, six years, they should be a core part. That I’m very excited about.

I think there’s been a significant focus on emerging fund managers as well. And so, I think the explosion of collectives and first-time fund managers is going to keep on going. And I think it’ll actually accelerate even further. There are a ton of, like, amazing entrepreneurs and operators I know who are in the middle of raising their own funds too. So you’re going to see like a proliferation of that, even move as quickly as this push for solo fund managers who are entrepreneurs in Silicon Valley. You saw that proliferation happen over the last sort of couple of years too. So I think you’re going to see a lot of that too.

I think it’s going to be very interesting to see how these companies that have recently raised rounds north of $100 million are able to spend their money for growth. But I think they will be watched very closely in terms of the results that they deliver. And I think with those funding rounds, you’re also going to see an explosion in talent coming back to the continent. I think, before, it used to be a tradeoff of like if I’m going to make any money, I need to move to London to be a trader. But if I’m Nigerian, now I don’t need to do that. I can stay in Lagos. I can work for Paystack, I can work with Flutterwave and have a very exciting career, make lots of money, and be on a great trajectory.

So I think that ability to pull back the right talent at the new price points is going to be really interesting. And I think you’re going to see a flywheel of, like, reinforcing effects. So right now, there’s a bunch of articles out there about the investments in API startups across the continent. … is financial services but it’s also an insurance and a few other sectors too. And that’s really exciting because, like, once they’ve gotten that right the next one to two years, the amount of stuff that can get built on top of them, the amount of stuff that can leverage this API here, that API here to really build something interesting, that’s going to be like really, really, really cool to see.

We already saw that M-Pesa gave rise to the possibility to do a lot of these lending apps, a lot of these savings apps as well. It wouldn’t exist without the M-Pesa base layer. So I think we’re still building more base layers on top of M-Pesa. And it’s awesome that you really got to speak with Marcus Smart-ID, but if he’s able to bring down the cost of quick, easy, accurate KYC for any startup that integrates into his platform, suddenly, you’ve solved a very important problem for a ton of different companies, whether you are serving micro-merchants or blue-collar workers. KYC is really important. And at the moment, it’s still expensive, difficult, regularly fails, and you’re going to see those problems get solved because Marcus has just raised a bunch of money to make sure that that is solved. So I think you’re going to see more of the base layer problems get solved. And that will give rise to much more interesting solutions that bring them together.

And, yeah, my primary hope is really what I began investing in Africa is to see a lot more African tech solutions set up in other markets. And you’re really seeing the beginnings of that. So Paga in Nigeria is set up in Mexico City. Lidya is set up in Eastern Europe. TimeBank in South Africa is now set up in the Philippines. And so, you’re really beginning to see the beginnings of that. And I just think it will just be awesome if that really picked up in pace.

Meb: So when we talk about Africa, like the Silicon Valley hotspots of Africa, you mentioned Lagos, Nairobi. Like, what are the main hubs thus far?

Aaron: I think Lagos is currently leading by far when it comes to like the amount of venture funding being received and the kind of companies that’s being built. I think it’s a function of many things. I think Nairobi still benefits a ton from being sort of like the hub for East Africa and from still having a very traditional position as if you’re curious about digital financial services for the bottom of the pyramid and the underserved, that’s where you go to. The allure of like the home of M-Pesa draws a lot of like amazing talent and investors into the region too. So I think that’s very exciting. I think those two hotspots will remain. Emerging hotspots I would say Dakar is going to be very exciting as is Abidjan. I think the jury is still out as to, like, which one will pull ahead. But I think both will become very exciting. I think Cape Town will remain a hub as well. But I think you’ve generally seen South African-based businesses to have struggled a little bit when it comes to expanding out to the rest of Africa. And you’ve also kind of seen a lot of Cape Town-based businesses to really be focused on their domestic markets with maybe some focused on Europe and the U.S. as well. So it’s a hub, but I’m not necessarily convinced that is the Africa hub. It’s an easy great town to spend time in, for sure.

Meb: Is Egypt kind of its own little country there? I mean, a massive country over 100 million, I think. Is that inclusive in this African kind of discussion, or is it more of its own animal?

Aaron: So I don’t think this is a commonly held view as I might get in trouble for this. But I feel in my mind, Egypt is a little bit like in India, in Asia contexts, whereby it’s so large and so unique and so different that it should really be treated as its own kind of sort of region with its own kind of tea. So I think it’s solving like a slightly different set of challenges. Its demographics also, again, slightly different. How we figure it out is slightly different. So that’s kind of why we’ve honestly and transparently like struggle a little bit to think about how that fits within the broader Sherpa portfolio. Like, we want to do more there for sure. But I think what’s more likely is that we will launch a Sherpa specifically just for Egypt, with a team dedicated to it, with a separate sector focus than the rest of the continent, for sure. With the exception of Swivel and maybe very few short others, there’s been very few Egyptian startups that actually have looked at the rest of the continent as well.

So perhaps, if there were more guys based in Cairo who want to work with the Sherpa Ventures team to scale across Nigeria and Kenya, that could be a push. But, again, it’s such a huge domestic market. If I were the founder, I would just go deep into Egypt and just win that.

Meb: Yeah, I like it. My Egyptian listeners, hit up Aaron for your new ideas.

Aaron: And Africa dreams. Yeah.

Meb: All right. When you look back on your career, you’ve seen a lot of companies and invested in quite a few as well. What’s been your most memorable investment, good, bad, in between? Does anything come to mind?

Aaron: Well, I guess when you put it like that, it almost feels like that career is over. It’s not. So I think one of the most memorable ones and I’ve kind of alluded to them a couple of times during this conversation is a company called OkHi based in Kenya. I think they were one of my very first Angel investments in Kenya. And I think what drew me to them was really just the scale of the problem that they’re trying to solve, how do we give addresses to people that don’t have addresses and how do we monetize that because most economies, it’s meant to be a public good. It’s not meant to be something that people are willing to pay for. I think what I’ve learned from that is that with these moon shots, you really need to get a shit ton of capital in there as soon as possible to be able to buy the runway, to have as much experimentation time as possible, and to bring the right people in and to give it the right push. I think though that now the team has really found their way in bank KYC, so the banks are very incentivised to make sure that people have addresses and can verify that they do. And so, that’s been a great sort of like pathway towards like discovering who’s going to pay for this.

But every day, I still learn a ton from the team around like the actual nuts and bolts of being able to figure out how to convince a consumer that an address is important, how to deliver it to them in a way that’s useful, while still maintaining this outlook that we are going to change the world by giving millions and millions of people an address for the first time. And I think while they certainly haven’t had like a wild exit yet or any kind of like major liquidity event, like, I think they’re still one of my best investments ever because I’ve learned a ton from them. I think a lot of the startups that I’ve worked with posts have benefited a lot from utilizing their services. And they’ve laid the groundwork for a lot of other companies to build on top of too. So, yeah, huge, huge fan of that team and just that loud ambition.

Meb: I love it. Aaron, this has been fun, educational, insightful. People that want to invest with you, they want to pitch you, they want to continue to read your insights on what’s going on in Africa and elsewhere in the startup world, where do they go?

Aaron: If you’re a founder, hit me up on Sherpa Ventures, sherpa.africa. We have a pretty fun pitch forum. I use that one because other people have used it to describe it. I wouldn’t describe it that way. We’re actually about to introduce a video game that you have to play before you complete your pitch as well, which will be a lot of fun. So, if you’re a founder, definitely go there. If you’d like to chat about investing, my e-mail is aaron@sherpa.africa. Please reach out. We’re especially interested in speaking with individuals who have a deep interest in Africa and are willing to get a little bit more hands-on and active in the portfolio. And we’re really sort of like flexible with sort of check sizes there too. I would also say that get in now before vehicle two rolls around, where we will become a little bit more stringent with regards to the kind of investments that we can bring on board. We haven’t yet built a video game for the investors yet, but maybe we should.

Meb: I like it. Aaron, this has been fun. I will let you go back into the Parisian evening. But thanks so much for joining us tonight.

Aaron: No, this has been awesome. Thank you so much. I really enjoyed the chat. Hopefully, your listeners find it useful, and take the leap into Africa one day. And also, if they decide to ever come for a physical visit, please also hit me up. I love taking people on like tours to check out the companies, as well as the consumers they are serving.

Meb: Well, maybe like in the Jim Roger’s style investment banker and venture capitalist, I personally would be all over that, a little tour. When’s the best time to come visit? Do you have a home by the way? Are you just full nomad? What’s home base?

Aaron: I’m kind of full nomad. I kind of split my time between Nairobi, Lagos, and New York right now.

Meb: Awesome. I may tap you on that. What’s the best time of the year for Nairobi and Lagos?

Aaron: I’d say let’s do it around now.

Meb: That’s a short notice. So, spring, fall is a good time?

Aaron: Spring is great. Even summer is okay because I think especially if you’re coming from the north, you might be a little bit sick of all the heat and you might need a bit of a cool down so then we can swing by a bit of Southern Africa that kind of can chill out a little bit.

Meb: I think that’s a great idea. I have to wrangle up an LP tour and we can come.

Aaron: Make an effort. Well, thanks again, Meb.

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.