– Sneha Shah, Lubega H’16, Matshoba H’14, Eneyo H’16
In 2019, it took African startups 46 weeks to raise their first billion dollars, while in 2021, it took 21 weeks. Predictions for 2022 are at just over 7 weeks. While this highlights that exuberance for the continent is high, it does not necessarily indicate that we’re building value-adding businesses that will stand the test of time.
Ms Sneha Shah, Managing Director of the Business Accelerator at the London Stock Exchange Group, moderated the Guild Session titled ‘Enduring Gains I Transient Exuberance’ at the Harambeans Global Summit 2022 held in Franschhoek, South Africa. During this session, she was joined by Ms. Ugwem Eneyo H’16, co-founder and CEO of SHYFT Power Solutions, Mr. Melvyn Lubega H’16, co-founder of GO1 and Mr. Lungisa Matshoba H’14, co-founder and CTO of Yoco who gave their perspectives on how entrepreneurs could deliver on the promise of the moment to ensure that the current exuberance in Africa’s entrepreneurial ecosystem leads to enduring gains and not a squandered opportunity.
The Founders discussed how not to get caught up in valuations and the money but stressed the importance of staying focused on their ventures and products and creating value for their customers. Mr. Lubega echoed this when he said, “It’s OK to feed the hype and to benefit from it, but the risk in doing that is forgetting the grass roots realities and the problems we’re trying to solve. As you raise foreign capital, which is good for the continent, someone will have their own views on what you should be doing. As founders on the ground interacting with our customers we must stay close to the problems we’re solving. The biggest risk for us as we raise international capital and offshore our companies is not remaining grounded. If we don’t, I believe that will be the biggest source of failure.”
Ms. Eneyo agreed with this sentiment believing that staying close to her customers and problems during the height of the Covid pandemic was critical. ”Our customers kept us alive during a really tough year. They knew we could solve their problems and we were constantly listening to them. It wasn’t about a solution or an idea as much as thinking about what problems they were facing and how to iterate and build very quickly to support them to stay a viable early-stage company.”
From a fundraising perspective, Mr. Matshoba emphasized the adage that ‘capital chases returns’. “Investors need to be making a return, otherwise others won’t be willing to bet on Africa. Right now we’re building a continental story of execution where companies are going through multiple phases of execution and delivering, which creates confidence. But this must be followed through by all companies currently in the space and the new ones coming in. That’s what will build the story. We will fail if the capital comes in, but the returns don’t follow” he said.
The session concluded with this question posed to each Harambean. ‘How would you complete this headline from the 2052 Harambeans Global Summit in Lagos? What would success look like? The Harambeans create ….’
Mr. Matshoba: The Harambeans created generational wealth on the continent.
Ms. Eneyo: A Harambean created the first truly smart city in terms of energy transmission.
Mr. Lubega: The Harambeans created a revolution and scaled it to ecosystems beyond the continent.