Nigerian VC firm GreenHouse Capital is planning to further leverage the initial coin offering (ICO) market as an alternative channel for accessing capital in 2018.
The company recently played an active role in the US$7 million raise by Nigerian fintech startup SureRemit on the ICO market, the most successful in Africa to date.
“Many of the lessons learned through that process will be critical to assisting existing portfolio companies with blockchain capable technology to achieve the same milestone as SureRemit,” GreenHouse Capital managing partner Nichole Yembra told Disrupt Africa.
“We are also looking at ways of tackling the gender gap in tech investment by putting together an accelerator programme for female tech founders and connecting them to both local and international investors.”
Born and raised in the United States, bar a brief childhood stint in Lagos, Yembra decided to move back to Nigeria two years ago to play her part in the development of the “incredible” African tech ecosystem.
“I’m a numbers person more than a techie – to steal a line I heard at a conference from another African tech investor, “In God we trust, for everyone else we need data!” My specialty is in risk, so I’m the person that thinks of all the things that can go wrong and tries to prevent or minimise their effect,” she said.
She is performing this role to good effect at GreenHouse Capital, which she said was founded to address two key issues: to tackle the missing middle in terms of startup scale funding, and to make it easier and faster for businesses and investors to move money quickly.
“The idea of the missing middle isn’t a unique concept in developing countries. Whether in Nigeria or India, indigenous companies often struggle to find funding at the early stage of their growth,” Yembra said.
“At Venture Garden Group, we knew this well. While we were able to successfully raise US$20 million from Convergence Partners in 2015, most other African companies struggle to attract funding despite a strong track record of success. So we decided to launch GreenHouse Capital in order to locate and incubate high growth potential startups that could mirror Venture Garden Group’s success.”
GreenHouse launched in 2016 as an independent investment fund to actively manage the progress achieved by the portfolio companies.
“We saw a need to be hands-on in all aspects of scaling a business, from fundraising to advisory and even business development, and decided to play that role. It’s important to create more investor exits and we can do that based on the stage in the company’s life cycle that we enter and exit, which is great for the ecosystem,” Yembra said.
The company’s portfolio currently contains 14 wholly fintech or fintech-enabled companies, while it has had one partial exit and is looking for more opportunities for its investors this year.
“Our entities range from those providing core B2B applications for commercial and microfinance banks to those sitting on huge amounts of data in health, renewable energy, last mile logistics, and even human capital,” she said.
So far, all invested funds have been from High Net Worth Individuals and Venture Garden Group, though Yembra said in recent months they have seen increased interest from institutional investors, both local and foreign. GreenHouse remains committed to the fintech space and will look to expand its influence in this universe.
“For example, we believe areas of fintech that are currently underserved are in asset management, personal finance, and insurance. More notably are opportunities where companies are leveraging blockchain to solve some of Africa’s most pressing needs,” said Yembra.
“SureRemit has opened our eyes to the possibilities of blockchain and its implications for Africa’s development. We are now racing to be leaders in this space.”
Though it has largely focused on investment in Nigeria for a number of reasons, Yembra said GreenHouse is open to other African countries, especially as its portfolio companies scale to other regions.
“I’m a huge Game of Thrones fan, so I’ll borrow an analogy from the show. African tech companies are like Khaleesi and the Dothraki – the world has heard rumours about them and questioned if they could really be great,” she said.
“Some have even come to see what’s happening, and there have been a few grand success stories here and there. But, in the very near future, things will click and African tech companies will blow everyone away. From the funding and advice perspective, there is significant interest, both domestic and internationally. In the past year, we have seen the CEOs of Facebook and Google visit Nigeria.”
On the supply end, on the other hand, Africa is rich with technological innovators who have built companies with exciting innovations tailor-made for the African landscape.
“The world should bend the knee! Or maybe just continue expressing interest,” said Yembra.