Disrupt Africa revealed last week South Africa-based VC firm Capital Eye is in the process of raising a US$100 million fund for investments in African tech startups, with about half that amount already committed.
But who are Capital Eye Investments, and what type of startups are they looking for? We caught up with associate Ravindra Mistri to find out.
“We invest behind technology businesses and businesses driven by technology. We look for mobile, cloud, data, and social technologies that are scalable, with strong annuity revenue streams that ultimately solve a problem or remove friction from a transaction or process,” Mistri said.
Capital Eye was established in 2011, with operational, asset management and M&A expertise dating back to 1998 and technology roots founded in the 1970s.
“We’re a private equity and venture capital investment firm currently managing a portfolio of 13 investments primarily across Sub-Saharan Africa, but also in the US, UK and Jersey,” Mistri said.
African investments include Wigroup, Emerge Mobile and Indaba Mobile, with Mistri saying the next three years will see a very aggressive acquisitive growth strategy across fintech, supply chain solutions, and software application solutions, including interconnected solutions and services – Internet of Things (IoT).
He said Capital Eye has a significant stream of enquiries through its website, but also sources companies in other ways.
“We also have access to a very large pipeline of investment opportunities through our current investments, as well as broader participation in the tech investment ecosystems; always with an ear to the ground,” Mistri said.
Key to Capital Eye is whether the business solves, has an addressable market, and has a commercial model that is scalable and sustainable. Mistri expects the fund to close in the next few months, and says Capital Eye is an active participant in its portfolio companies.
“The current team has, over 14 years, successfully invested in technology businesses across two investment platforms. Embedded within the team is up to 25 years of extensive technology specific experience across finance, legal, business development, and software skill sets,” he said.
“Accordingly we are active investors, engaging and advising where relevant depending on the nature and life-cycle of each investment.”
Mistri said while each African country is unique in its population demographics, economic growth rates, and opportunities and challenges, the expectation that African economies will, as a whole, expand twice as fast as developed nations means there will be a host of problems to solve, and consequent gaps in the market.
“The ‘African startup scene’, in particular tech startups, is a unique opportunity to use the disruptive and enabling qualities of agile tech businesses to solve those problems; whether that’s innovative supply chain solutions, financial inclusion, or simply servicing the financial, social, education and healthcare needs of an emerging consuming middle class,” he said.
“Whether that’s M-KOPA Solar delivering alternate energy fintech solutions to informal settlements, BitPesa simplifying cross border mobile money transfer, or iKhokha offering payment and unsecured lending solutions to SME’s; it’s an incredibly exciting time to be alive.”