Ian Lessem grew up in a family of entrepreneurs, and also built a few “small side hustles” during his student days while finishing up his Business Science studies at the University of Cape Town (UCT).
Instead of following in his older sibling’s footsteps and jumping headfirst into entrepreneurship, however, Lessem opted to rather go into investment banking, with the aim of gaining exposure into a myriad of businesses across both Africa and abroad.
“I was very fortunate in that in my 10 years of working in banking I had the opportunity to travel, and concluded deals in Africa, Europe and the Middle East. During this time I was exposed to many successful businesses and business people, learnt about different cultures, best practice and investment principles, and what makes the business world go around,” he told Disrupt Africa.
“While my time in banking was very fulfilling, by the time I hit my 30s, the entrepreneurial calling was too strong to ignore, and together with my partners, with our own capital, an understanding wife, and “fancy” offices in the canteen area at Virgin Active Alice Lane in Sandton, HAVAÍC was born.”
HAVAÍC is an investment and advisory firm that specialises in investing and supporting early-stage, high-growth post-revenue African businesses driven by technology with global prospects.
As a complementary offering, it provides corporate advisory and capital raising services to its portfolio companies as well as emerging, internationally scalable businesses. Lessem said the company’s founders had identified that locally there was amazing tech talent and ideas that had the potential to commercialise both locally and internationally.
“However, this talent was not being adequately supported by the local capital markets and experienced business minds. Given our professional backgrounds, experience in investing locally and abroad, and access to markets and capital, we believed we could make a real difference in the early-stage investment space, where the largest funding gap existed, not only from a capital point of view, but from a strategy and network viewpoint as well,” he said.
At the beginning, Lessem and his partners were making investments using their own funds, but this soon began to change.
“Seeing the potential of our investments and appreciating the professional approach we took to investing, our contemporaries started investing alongside us,” said Lessem. “From there, a network effect took over and at the time without having raised a formal fund, and rather spending our time focusing on investing and scaling local tech companies, we soon had more than 100 investors investing with us.”
HAVAÍC now invests using a more traditional fund format made up primarily of private investors and family offices, but remains true to its principles of treating “other people’s” money with the greatest of care and respect. Lessem said it does this via a fund mandate to invest by way of minority positions that “encourages entrepreneurs to keep their independence, be masters of their own destiny, all while knowing they have us in their corner when needed”.
HAVAÍC had a mixed 2020, drawing attention for a legal wrangle with South African startup Custos Media Technologies, which was subsequently amicably resolved, but also making eight new investments and seeing three international exits. Its portfolio includes 13 companies in all, including the likes of hearX Group, AURA, Instant Property and Sortd, Kenya’s Tanda and Nigeria’s Kuda.
Fairly sector-agnostic, HAVAÍC invests in local businesses with a “right to play”, and that solve real world problems.
“Our investment premise has always been that with the right people, right skills, right tech, right access to markets, and when solving real world challenges, local can scale and commercialise internationally,” said Lessem. “Pleasingly we have achieved three international exits, and made investments in people and businesses that use tech services with close to half a million customers in over 180 countries across the globe, and this really reinforces the premise that local can scale, compete and thrive internationally.”
As a team of investment professionals with networks and experience in Africa, Europe, the Middle East and the US, HAVAÍC focuses on bringing about strategic value in the companies it invests into.
“Our approach is very much about solving backwards from the end goal and asking “what foundations do we have to lay now?”, “what strategic moves to we have to make?”, and “what partnerships do we need to cement along the way in order for us to achieve the end goals?”. Put differently, with a track record for internationalising our investments, moving IP offshore, attracting foreign investors and achieving international exits, our value add is very much as a strategic partner that can help businesses go from local and become global,” Lessem said.
He compares being involved in the African tech VC space as like “living in a book by Dr Seuss, where everything is topsy turvy and upside down”.
“Despite local economic headwinds in South Africa and global challenges as a result of the coronavirus pandemic, African entrepreneurs continue to not only meet these challenges, but when armed with technology, the right people and partners and access to markets, they don’t merely survive but are actually thriving,” Lessem said.
“With the adoption of technology continuing to accelerate, and with local tech entrepreneurs showing they can compete and scale internationally, now more than ever before is the right time to be excited, support and invest in the African tech space.”
Yet African VC as an investment class is still in its infancy.
“This of course is where the opportunity for both entrepreneurs and investors lies. Given this, while interest in investing in African VC has grown considerably over the years and with over half of our investors being offshore, as an asset class, VC is gaining good momentum – probably more so by international investors who have had more exposure to VC than local investors,” said Lessem.
“However, as it is still early days, the road ahead to continue forging further interest is a long one, but a journey that is well under way by entrepreneurs and investors alike, and year by year this interest is growing.”
HAVAÍC recently announced the launch of its newest fund, which has now achieved its second close, and with a number of portfolio companies maturing from being startups to being growth businesses will spend large parts of 2021 focusing attention on ensuring they successfully scale and raise funding from international markets.
“Like we did when acting as the local lead for hearX’s Series A, we are likely to perform this role for some of our other more mature portfolio companies this year and help them attract strategic local and international investors alongside us,” said Lessem. “On top of this, we have several South Africa-based younger businesses we are looking to invest into, and with borders slowly opening up we are hopeful that we can make more investments into both Kenya and Nigeria this year.”