With 10 years of professional experience and sits on the advisory boards of several African private equity funds, Hannah Subayi is an investor in Africa, a portfolio manager at one of the largest independent private equity companies on the continent mainly focusing on primary and secondary transactions (origination, execution, monitoring and exits). She is a speaker, panelist and start up competition judge and co-producer and host of the African Francophone edition of the Nest, a show aiming at rivaling the Dragon’s Den in Africa. Hannah joined forces with a group of savvy women in creating Dazzle Angels, to close the gap around the inequality of fund management and investments.
Hannah’s Interview:
I have always been passionate about numbers and legal agreements so becoming a professional investor has always felt like a natural career path and source of joy! I also love finding and assessing talent and assisting entrepreneurs and management teams improve business models. I also like the idea of productively investing capital in our continent to build our economies.
I am also keen on connecting talented and driven people together, I like to feel and identify synergies between various businesses and participate in the process of wealth creation in Africa.
Hopefully, in future, I will be increasing my focus in my home country DRC, where we have witnessed a huge development of the hubs and accelerators with incredible players like HUB (Muungano) in Lumumbashi and Kobohub (in Kinshasa). It is really exciting for me!
Many industries are male dominated.
In the same topic, there are many industries that are not yet diverse and fully inclusive.
It is reassuring that there is an ongoing debate everywhere in the world regarding these burning issues and making sure that all types of unwarranted discriminations is banned from the workplace.
From this perspective, I have experienced hurdles, challenges but I guess that mitigants to this include reaching out to mentors for advice, being professional and positive in all circumstances. I also try to use my potential or perceived differences and uniqueness as a source of strength and differentiation too.
Through my 7 years of investment in Africa, I have grown frustrated by the lack of diversity that I was experiencing when assessing multi-million-dollar transactions. This drove me to try and have an impact in my personal capacity as an angel investor. I have been particularly focused on black female entrepreneurs here in South Africa and the rest of the Continent that face specific hurdles (both economic, financial, cultural and social) that I can relate to easier and can try to address. In the past few months, I have expanded my advisory activities to a wider public (Yes – talented male founders also accepted!).
I am also early in my journey as a business angel and am starting to understand what my sweet spot is, in terms of personality fit with the team and organisation, sector, maturity of the company and geographies amongst other.
Numbers can be misleading and to try and better understand the actual value creation taking place in the tech industry, I always like to revert to sustainable growth as demonstrated by traction, through growth in sales, long-term job creation, scalability, uniqueness or relevance of the technologies used and profits.
It has become very fashionable in the past few years in Africa and in the rest of the world to measure the success of a tech venture by the amount of capital raised. However, the covid-19 crisis has highlighted the inherent weaknesses of several business models and some high-profile ventures have been struggling unfortunately.
Each investor, whether institutional or angel, has a certain investment style, based on their own expertise, experience, preference.
Personally, I like both small business and tech businesses and I am more knowledgeable about education, healthcare, sport and retail.
I also like a strong management team, with a profile that match the venture value proposition, with the right academic, operational, and / or entrepreneurial background. Whether the company has a sole founder or includes several team members, I would back the proposal if I feel a strong personal connection with the individuals and the value proposition.
I also like to see a successful pilot demonstrating traction (not necessarily requiring capital). I always prefer to focus on tangible, effective, and meaningful results that will help me visualise the success of the ventures.
It is also helpful when the team understands their industry and business model well (including revenue generation and their own costs base) and is aware of the opportunity / upside but also the risks and downside.
I have partnered with a data analytics venture which is mainly using biological data recorded, stored and analysed with tailored hardware’s in various fields including agriculture, sports and many more sectors. I have a great affinity with the entrepreneur, I have been able to interact with her in various social and professional setting over few weeks / months which enabled me to assess her integrity, consistency and professionalism. I was also able to witness her ability to add new revenues streams to her business at the onset of the COVID crisis and to respond to the new market conditions. It was also critical for me to ensure that the entrepreneur is well-networked and has a good grasp of her ecosystem and operating environment (including but not limited to clients, suppliers, talent and ability to act as an ambitious leader, inspiring stakeholders around her). The venture is also operating in sectors I am passionate about (agribusiness and sports) that are key for African development (economic and social).
I am currently in due diligence with a venture aiming at creating a unique Mobile Virtual Network Operator targeting the underserved and mass market with corporate partnerships (including on the distribution side).
I think you always want to invest in the geographies you know, are familiar with and can add value – so Africa is the obvious choice for me, like most Africans, being Congolese (DRC) based in Cape Town.
It is an interesting question actually – it has never crossed my mind to invest anywhere else. Why would I?
I don’t really understand myself expression like “Africa is the Future”
But in terms of trends that I have seen in my modest experience in the market:
Entrepreneurship remains challenging due to lack or limited challenging regulatory, economic, macro, legal environments in few markets.
However, there are also lots of opportunities in terms of access to new markets, suppliers, providers, and potential partnerships through online forums, resources.
It sounds like COVID has really shifted the mindset of many stakeholders in the market organising webinars, being more open to connections and partnerships proposals due to the lack of physical interactions due to COVID.
I always remind entrepreneurs to make the most of these opportunities. From an investment perspective, there seems to have a new preference for B2B model, typically more resilient than B2C offering in times of economic downturn.
The most successful entrepreneurs seem to be able to pivot and reinvent their business model on the back of the COVID crisis. Do not be idealistic and stick to your current value proposition if not relevant in the new market conditions.
I also think that there is an increase in hubs, accelerators, incubators and free online resources that should hopefully continue to assist entrepreneurs in their business endeavors – both in terms of acquiring new skills, and understanding their market, having access to markets, suppliers and better negotiating their financing terms.
I just want to add a big kudos to all our entrepreneurs here in Africa, which is probably one of the toughest environments to start a business! I am excited to see an increase in formalized female entrepreneurship.
Partnerships are critical for any ventures to survive, especially in Africa where several industries are nascent.
When I am teaching at the African Leadership Academy (https://www.africanleadershipacademy.org/), I always encourage students to share their stories and lessons learned from their own successes and failures in their ventures.
I also encourage them to try and find synergies and potential partnerships opportunities among themselves.
Partnerships (including cross-border ones) are always helpful as entrepreneurs who are not directly competing can exchange tips on successful recipes or challenging situations. For instance, I have introduced 2 entrepreneurs operating in SA and in Kenya in the personal care segment, who are developing similar ventures. Few months down the line, I am pleased to see that they are still in touch and creating value through their constructive business conversations.
It takes a village to raise a kid, it also takes a community to build a company: reach out to mentors, advisors, build your board early enough so that you can report to external parties early on and remain focus on your strategic goal. It is always helpful to be surrounded by like-minded experienced individuals who will hold you accountable for the strategic goals you had set-up for yourself and for your company.
Don’t (lol) – make sure you focus on building your venture and / or business first – focus on implementing cost-effective solutions. For instance, do you really need ZAR 100 000 in marketing to reach new clients when there are so many new online forums where you can directly interact with your prospects?
Connect with your ecosystem and network in a meaningful way is a priority that does not necessarily require a cash injection.
Be creative and entrepreneurial: focus on local providers instead of international ones where possible. If you cannot pay cash for a service (especially marketing, legal or accounting), try to consider if there might be another angle where you might add value to that venture.
Focus on grants funding as well – equity and / or equity-linked financing might come up with negative counterparts.
Reach out to the relevant advisers and board members who can unlock value in your business without any cash injection (but possibly a minority share in the business).
A last anecdote on the topic: in my own portfolio, I have noticed that the companies in which I have invested the largest amount of capital tend to underperform the ventures where human capital is favoured.
There are different ways to unlock value in a business: you can invest ZAR100 K in a business for marketing with unclear results or you can introduce the company to the right client and unlock ZAR 100 K of sales.
Tough and complex but also fascinating, vibrant and close to my heart!
Should you be a female tech founder operating in South Africa, please feel free to reach out at info@dazzleangels.com and visit our application website: http://www.dazzleangels.com//about-us/
Please feel free to also check out an innovative live show The Nest https://www.findthenest.org/entrepreneurs.html
I am co-producing and hosting for Francophone Africa named The Nest – created by Jim Chu, US investor and seconded by Maxime Serventaz, the show aims at matching entrepreneurs with the right business angels: https://www.findthenest.org/
For any other requests, please feel free to reach out on LinkedIn!