Village Capital is building quite a reputation for itself.
Active across several continents, the investment and accelerator firm is especially busy in Africa. It runs a number of programmes, is still investing in tech startups, and is armed with a US$17.7 million war chest.
Central to Village Capital’s investment strategy is Greg Bennett, who joined the company’s investments team in November 2014. Bennett previously worked with Samasouce on e-commerce data projects for @WalmartLabs, and at Toniic as a fund analyst, and has extensive experience in India, Indonesia and Jordan.
Africa, though, has certainly caught his eye, especially because the continent’s entrepreneurs have a habit for designing products that solve local problems.
“On balance, entrepreneurs on the continent are excellent at designing solutions for real problems. Whether those solutions are viable in the market is a different obstacle – and one we at Village Capital are happy to support entrepreneurs in solving,” Bennett said.
“In our experience, the founders of these startups are very amenable to advice. Their ability to listen to investors, mentors, and other entrepreneurs, and turn that advice into results is encouraging as an investor.”
He also says there is huge demand from customers across both the B2B and B2C in Africa, which makes it a great place to be as an investor.
“Africa is rising, and with a rising economy, people need things! As long as the value proposition fits the market, there is huge opportunity for new businesses to ride this wave, which is very exciting as an investor,” said Bennett.
Given African entrepreneurs are in general very capital efficient, and can do a lot with fairly small amounts of financing, startups on the continent also tend to have low burn rates.
“I look forward to testing the hypothesis that with more financing for these startups, they will be able to deliver scaled-up results in revenue generation and increases in enterprise value,” said Bennett.
For Bennett, Africa is the last growth market, with investors all over the world well aware that while Asia is booming today, Africa is really the last market for growth across many asset classes.
“As an early stage investor, there is a nonzero chance that these companies may be the Amazon, Medtronic, Tesla, Whole Foods, or Salesforce of tomorrow. I want to be here when those market forces hit, and it’s going to be in the next 10 years – stay tuned!” he said.
Village Capital certainly has experience in high growth markets, having been founded in 2009 with the mission to democratise entrepreneurship. The original spark for the idea came from the concept of village banking, and the concept that entrepreneurs and “makers” can be empowered to make investment decisions because they are closer to the ground.
Since then, it has become one of the world’s most active early-stage investors, investing in over 70 startups across 15 countries and supporting hundreds more through its collaborative investment-readiness programs.
The effect has been significant, with Village Capital graduates having leveraged initial capital by a ratio of 25 to one, created over 10,000 jobs, and served over six million customers.
“In 2017 we will continue to run investment-readiness programs in sectors – including an expansion of our partnership with PayPal to run financial inclusion programs in the United States, Latin America, India and East Africa – and also build out new models for forecasting which entrepreneurs will be successful,” said Bennett.
“We work with partners on each of our investment-readiness programmes, including foundation partners and corporate partners. These partnerships give us the financial capacity to run programmes, and also provide us with values-aligned partners who can mentor our entrepreneurs.”
Village Capital’s primary interest is in startups focused on fintech, ed-tech, health, food and agriculture, and clean energy and water, with its portfolio including the likes of PayGo Energy, Olivinetech, Piggybank.ng, Farmerline and Atikus Insurance.
The company also has a novel way of deciding what startups it invests in at the conclusion of its programmes. Bennett has told Disrupt Africa before that peer-selection by accelerator participants is the best model for making investments, because it leverages the industry expertise of the participants themselves, and also aligns the success of the entrepreneurs and investor.
However, he sounds a note of caution, saying African startups typically lack a depth of talent on their teams and capital. Investor is interest is growing in Africa nonetheless.
“There is more interest from US and EU-based firms, and we’re hoping more domestic firms spring up and start putting money to work,” Bennett said.