Transcending crises through innovation
Today, there are opportunities on the African continent that were undreamt of twenty or even ten years ago. They are being developed by entrepreneurs with new ideas and vibrant energy.
I am an engineer by education and started off by designing local payment systems for a bank. While studying in the US, I discovered venture capitalism and in 2000 I joined AfricInvest, a leading pan-African private multi-asset investment platform, to develop their risk capital ventures. I’ve been with them ever since.
It has been a steep learning curve working on our pilot fund AFS (AfricInvest Financial Sector), so our second fund, the Financial Inclusion Vehicle (FIVE) became a more flexible evergreen fund that invests in the longer term. The learning process finally resulted in the creation of the Cathay AfricInvest Innovation Fund (CAIF), which has a strong focus on tech-enabled and scalable innovation.
CEO Aziz Mebarek, talks about the strategy of AfricInvest.
Until the early 2000s, AfricInvest focussed mainly on North Africa. Since then, we have worked in all different regions and across cultures of the continent. To manage this, we have dedicated teams in Abidjan, Lagos, Nairobi, as well as in eight other locations. These understand local culture and history, as well as the subtleties of doing business in their specific context.
Glocalisation – a local solution with global potential
The world’s first mobility fintech providing revenue-based vehicle financing for mobility entrepreneurs in Africa, called Moove, is part of the FIVE portfolio. This African-born enterprise is a great example of a tech-enabled, scalable company. In Africa, new cars are more difficult to come by, even for people with long-term employee contracts, let alone for a contract-less Uber driver. Since people working in the gig economy often have difficulty accessing financing, Moove partnered with Uber to get real-time access to driver information. This allows the company to better evaluate a driver’s creditworthiness and loan capacity to invest in a new car. Moove allows these drivers to have their actual debt-capacity taken into consideration, granting them access to financial tools such as car leases, insurance and loans. This helps them move from the informal gig-economy into a real, formal business.
Because the results have been positive across the board, Moove intends to extend the contract with Uber and other marketplaces across more countries in Africa, the Middle East, India, as well as Europe. Uber realised that, once drivers take control of their destiny and get the power to invest in their own futures, their attitude towards their job changes for the better.
The energy transition is a big challenge for the transport sector. A company like Moove can offer specialised financial products to customers whose vehicle is electric or conforms to certain emission norms.
Another investment of ours, 54Gene, is clearly innovative – perhaps even science fiction. In a nutshell, they sequence genomes.
Today, 97% of global genome sequencing happens on populations from Europe, North America and Asia. However, Africa is the cradle of humanity and only 10% of its population has migrated to populate the rest of the world. If you extrapolate this to the global gene pool, this means that there's still a very large part of the human genome that hasn't been sequenced. By sequencing the African genomes, 54Gene can find new treatments and genetic resistances for diseases and viruses, aiding mankind. 54Gene has already signed their first contract with a large American biotech company.
The company also benefitted from the covid crisis because the machines used for sequencing can also be used to develop PCR tests. 54Gene now offers fully-fledged molecular diagnostics, which is a major boon in a continent where most of the samples are still sent to Europe for testing.
I believe that humanity will continue to be confronted with crises but will transcend them. By combining finance with technology, we can come up with scalable solutions that have the potential to change the face of the African continent through better education, a better distribution of knowledge, innovation, inclusion, productivity, and health.
BIO has invested in several funds of pan-African fund manager AfricInvest.
Khaled Ben Jilani is a Senior Partner and a member of the executive committee of AfricInvest
This is his story.
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