Sacha Haider, Partner of Global Ventures – the leading venture capital firm in Africa and the Middle East.
Exclusive: People in other markets outside of Africa don’t know better than Africans, but the high-level talents in Africa are leaving - Sacha Haider
Business Insider Africa recently had a sit down with Sacha Haider to get an insight into how the venture capitalist market works in Africa.
Sacha is the youngest female Partner of a VC firm in the MENA region and has extensive investment experience across Africa, the Middle East, and North, and South America.
Sacha led Global Ventures’ expansion into Sub-Saharan Africa, including its investments in MAX, TeamApt and supporting Helium Health’s acquisition of Qatar’s doctor booking platform, Meddy, in 2021 - the first time a sub-Saharan African startup has acquired a Middle Eastern business. She was featured in the Forbes 30 under 30 list for 2022.
Q: What is the difference between operating in Africa and the Middle East?
When we discuss the Middle East and Africa as a region, we generally tend to break it down to the GCC, the North Africa Levant, and Sub-Saharan Africa. I think it is important to make that distinction because MENA captures everything from Egypt to Jordan to Lebanon and all those markets, but for this question, I will compare markets like the UAE and Saudi vs markets like Egypt and Nigeria, which is essentially different levels of infrastructure.
In the UAE and Saudi, there is very significant government intervention, enablement, and support, and there is also a strong infrastructure and significant international talent pools. And in Sub-Saharan Africa, what you have is, a very large population, the world’s youngest and fastest-growing population, and an aspirational consumer base, who’s looking for a job and eager to consume digitally, but also operating in an environment that is a lot less developed from an infrastructure perspective. Whether that’s like financial inclusion, or health care provision, but, is seeing increasing day-on-day growth in internet penetration and access to mobile devices, so really has the opportunity to leapfrog and adopt a lot of technology. So those are the headline differences, scale, and infrastructure.
Q: How many Sub-Saharan markets have you executed investments in and which was the most welcoming?
We have investments in Kenya, Nigeria, and Rwanda, and honestly, I feel they are all incredibly welcoming, and I’ve had great experiences in each and every one of them. I lived in Kenya for quite some time and that is the one I’m most acquainted with, but I think they are all super welcoming, and I really enjoyed it.
Q: It's no secret that some countries in Africa have government initiatives to welcome foreign investment while some are more skeptical towards foreign investment, which country based on this has been the easiest to operate in?
In terms of what we look for, I think that geography, or countries specifically, when we look at them we look mainly at the ease of doing business but more so the scale of the opportunity in that market, but most of all what we focus on is the quality of founders and the access to the talent they have within the market they operate in. So if you look at our Africa portfolio, a significant portion of it sits in Nigeria, so of the 7 companies we’ve invested in, in Sub-Saharan Africa, most of them are in Nigeria and the reason for that is we found very high-quality founders in that market, and they have been successful in being able to pull in further funding and capital from other investors, given the size of the market, but also given the caliber of talent they can attract to help them solve their problems.
Q: What is the biggest challenge you’ve faced operating in Africa?
The macroeconomic challenges and specifically, the currency devaluation is a challenge, not per se for us, but it's a challenge for founders. Between 2021 and 2022, the naira has gone down by 33%, the Egyptian Pound is at an all-time low and Ghana and Kenya have also seen their currencies depreciate. And what that means is that founders need to grow quickly enough to outpace the headwinds, of currency devaluation, and, telling the stories to international investors and follow-on funding becomes a bit more challenging. Also, what’s interesting and what's good in a sense is that a lot of these founders are solving real problems, so they are building infrastructure for the next billion consumers, and they are focused on important issues like health tech, financial inclusion, ED-tech, supply chain security, and agri-tech, and these problems aren't going away, and in the best case scenario, we are seeing that the demand for these products is outpacing some of the macro challenges. So I would say the macro challenges are the things that are super difficult to deal with.
Q: Are there any problems that your company has identified in Africa, that Africans are not paying attention to?
So I would say this problem is being solved somewhat and some African companies are trying to solve this problem, but more attention needs to be put on it, which is talent networks. So I think we have loads of great founders, but one of the problems we see in the VC context is that when it comes to sort of building out the senior and strategic level talent which has the top level experience or has some international experience, but then also understands the African context, those profiles like the CFOs and the CTOs, those are missing.
So anything that focuses on upscaling the next generation of operational talent or has the means to bring more international experience into the market to help buff out founders, because I think what we are seeing is that eventually, companies get to a plato, founders are looking for more support to support them scaling, and essentially what happens is that it becomes very difficult for them to find that strategic top-level talent.
Q: Do you think the talent network problem is due to the brain drain epidemic in Africa, or do you think Africa just needs western consultancy?
I wouldn’t say that people in other markets know better, because I actually think of the African context as very unique, and African talent is in the best position to solve and understand those problems. I am not necessarily sure that bringing in international consultants solves anything. And that’s what I’m saying one of the challenges is, finding people who have the requisite level of top talent but then also have an understanding of the African context is really the missing piece. As you said, the brain drain is very significant, we are seeing a lot of senior-level talent leaving companies across the continent because they find better opportunities elsewhere. So I think the solution is not necessarily to bring international talent and consultants in, although that could be part of the solution, I think it's figuring out a way to upscale the next generation of talent, and also for the existing talent, figuring out how to have sort of a more fractional CFOs, more fractional CTOs, so they still get that experience and they still get the benefit of the technical understanding, and someone who understands the continent, but they don’t have to 1, necessarily pay a high premium for it, but 2, it's not impossible to find. So instead of having someone who’s just one very expensive resource you can have a few different resources that already exist, so finding ways for those people to sort of commoditize their time.
Q: Are there any new tech solutions that African founders are not yet taking advantage of?
So we spent a lot of time looking at health care across the continent, and I think that right now, a lot of the efforts we have in health care, we four health care, Helium Health, Llara Health, Remedial Health, and Viebeg in Sub Saharan Africa, so I would say in the context of Africa, it makes up 17% of the global population and 1% of health care spending because people fundamentally don’t have the means to spend on health care. And one thing I think about a lot is how the burden of non-communicable diseases, including cancer and cardiovascular and diabetes, is one of the main causes of mortality in Sub-Saharan Africa, and then coupled with that you have 0.2 doctors to every 1000 people, and in the more developed economies like the EU, you have 3.8 doctors for every 1000 people, so there’s like a fundamental gap in health care provision, and right now, we are still trying to deal with the health care challenges on the continent through better access, quality and cost of health care, and I think that one of the things that could help reframe healthcare in this context in technology can be leveraged to solve this problem is more of a focus on prevention. If there were deeper use of diagnostics or a better focus on wellness and technology to monitor patience, to prevent people from getting sick in the first place, especially because there is such a young population who don’t necessarily have challenges that are correlated to aging just yet, there is like a huge opportunity to leverage technology and leverage education, to stop the problem from becoming worse later on down the line.
I’ ’m pretty optimistic about the venture capital industry in Africa and the opportunities. Last year in 2022, there was $6.5 billion in funding and 2020 to 2021 put Africa back on the global mark, and there were some real inroads in sort of the growth in the venture landscape, I think that the founders in that market are solving real problems, they are building infrastructure and I think these problems are going away, so even if there are small macroeconomic blips, the opportunities are still really exciting, there is an aspirational tech-savvy consumer base and there is growing internet penetration and urbanization, which is super exciting for the next 10 to 15 years. I think if anything, the lower evaluation, and the slowdown in investing, is like an opportunity for us to push toward a more sustainable ecosystem, where founders and investors are focused on fundamentals, pricing is making more sense, and hopefully, in the longer terms, there would be possible outcomes for everybody.
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