Amadou Daffe, CEO of Gebeya, and emerging markets investor Mark Mobius. Photos courtesy of Gebeya and Mark Mobius

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Ever wanted to eavesdrop on a conversation between an investor and the CEO of a tech start-up? IFC Insights Live gave scores of viewers the chance to do that last month when investor Mark Mobius and Gebeya CEO Amadou Daffe joined Insights coeditor Daisy Serem to share their thoughts on Africa’s tech ecosystem. In a candid discussion, they explored the qualities that attract investors, how to train more people for digital careers, and much more. Click to watch the 30-minute conversation. Some of their most compelling insights follow.

What a start-up needs to attract investors

Mark Mobius: “What investors are looking for is a good idea—an entrepreneur who has some unique idea that has a potential market. An investor will ask the entrepreneur, ‘You got this great idea, who are you going to sell it to? Where is the market? Is the market bigger?’ This is one of the challenges in Africa for some of the smaller countries—and it’s a big challenge, because…they've got to move beyond their country in order to create a big enough market. The second thing [an investor] will ask an entrepreneur is, ‘What's your background? What's your experience? What do you know about finance, accounting? Will you keep a proper set of accounts? How would you structure your company? How can we invest as a shareholder and be assured that things will be kept in order?’”


Why potential investors need to see a CEO’s passion

Amadou Daffe: “What made me move from the U.S. to Ethiopia [to start Gebeya] is passion. I believe that people invest in a passion that you have. Knowing that I have this idea about making Africa more competitive by building better talent is very attractive for the investor. But then investors want to know, ‘What is the passion behind you?’ [or] ‘What have you done so far to get you there?’ My answer is, ‘Well, I moved to the second most populous country in Africa, after Nigeria. And I know I can build enough talent here to actually support the rest of the continent.’ And then, and I always say, ‘My passion is tech talent in Africa.’ So when I combine those things, [the reasons for investing] come out. Investors don't like to invest in boring people or boring companies. If you’re boring or your ideas are boring, there's no point, right? Passion is important because it's going to be extremely hard to be an entrepreneur. If you don't wake up every day with motivation, an investor will see right through you.”

The importance of building a continent-wide pool of tech talent

Amadou Daffe: “Within the African ecosystem, there are three pillars. There are the start-up hubs, which we've seen recently have grown almost 200 percent. I believe that there's enough initiative in Africa, whether coming from the government, private or public sector to boost entrepreneurship. The next pillar we're looking at is investment capital. After that the only gap that I see is the talent. You cannot build an ecosystem of start-ups and heavy capital if you don't have enough talent on the continent that can take on these local jobs. Some of my entrepreneur friends who have very successful start-ups are still hiring people in Eastern Europe and Asia. That may work for now. But from a long-term sustainability [perspective], that doesn't work. So I say, let’s take on this challenge to build enough tech talent on the continent that can support the start-ups so we can grow this ecosystem exponentially.”

Why venture capital is key to financing Africa’s digital growth

Mark Mobius: “The kind of capital that Africa now needs is start-up capital, venture capital—capital that is not necessarily related to having a stock market listing or bond listing. This is money that goes into smaller firms and start-ups, and generates growth. So that's probably the first step. But then if we get into the larger area, where the company is growing… we get into public funds, funds that need to have liquidity and size in order to make adequate investments. And it's required to have these companies in Africa grow to that extent. The money is there, there's no question about it. But I think the first step is to have the venture capital go into Africa. That would be the most desirable step.”

What drives a CEO’s vision for Africa

Amadou Daffe: “Tech is an equalizer. This is the lowest barrier to entry that someone can invest time or money in. With Africa lagging behind, we have no choice but to look at tech in a very sort of critical way. If you're an entrepreneur with passion, you also need to have a clear exit strategy. You have got to tell yourself, ‘I'm building this company to sell it in five years to make an impact.’ And as an investor in Africa, you better pay attention. Because this is the last frontier, as Mark has pointed out, and there's a lot of infrastructure that has been laid out. We have the resiliency, you know, and we don't quit very easily.”

The role of demographics in Africa’s tech potential

Mark Mobius: “The great thing about Africa is that it's a young population…You've got lots of young people who are willing to learn and will begin to create things. I believe, going forward, there will be lots of money going into African start-ups, there'll be lots of interest in what's happening there. Most importantly, the pan-African companies will do very, very well because they'll have a population of almost a billion people to serve. So there are tremendous opportunities. I’m quite excited about it.”

Published in December 2020

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