During the recently concluded GFA hosted Investor Hangout themed “Overcoming the Great Reset in African VC,” participants of the hangout delved into a wide range of discussions centered around the impact of technology on business, the digitization of the funding ecosystem, effective data management, the rise of social enterprises, and emerging trends in the tech space.
One significant point of emphasis was the revolutionary role of technology in breaking down barriers for aspiring entrepreneurs. For example, In the past, owning a phone, let alone establishing a startup, was a luxury reserved for the wealthy and powerful.
According to Louis Ogbeifun, “Technology has reduced the barrier to entry for many startups,” adding, “Let us take the phone, for example, there were certain businesses in the old time that could do if you do not have a phone, and you had to be a king to have a phone, a king financially; also you had to have so much for you to have your start-up but technology has lowered all that made things easier.
Okechukwu Aguoru highlighted how technology has empowered startups to overcome funding challenges, allowing long-tail brands that were previously overshadowed by larger competitors to not only survive but thrive. He explained, “In the area of technology, there tend to be key barriers. How do I begin? How do I fund and how do I keep this running. “In my industry, we found that the biggest thing technology has to be able to do is that it has helped long-tail brands survive for longer.”
It was unanimously agreed that technology has democratized access, making entrepreneurship more attainable and levelling the playing field for ambitious individuals. Moreover, technology has revolutionized deal-sourcing by digitizing the process and facilitating instant communication through platforms like WhatsApp, thereby expediting investment opportunities.
As Abiodun Lawal pointed out, “Now, when I am looking for venture sourcing, I am not going to put “Hey, I am working for XYZ that fits these criteria via email or visit an offline to do it because the barrier has been lowered, the space is now heavily digitized, and deals go down in WhatsApp groups, and it is very easy to miss deal calls.”
Louis shed light on the transformative potential of technology in investment decision-making. By harnessing technology, businesses can leverage data to present compelling cases to investors. Clean and organized data enhances the attractiveness of a venture, allowing potential investors to make more informed choices and mitigating risks associated with incomplete or ambiguous information.
As Louis explained, “A lot of time especially in Africa, when are talking especially in Africa when we are talking about doing business, there is a lot of emphasis on money, and sometimes we are trying to get fuel when we have not gotten the car because we don’t ask if we are attractive enough for the fund if the fund is available, that is what technology will help do, it cleans up and organizes data to make a business attractive to investors.”
Tope Ajao acknowledged the persistent challenges surrounding data accessibility and quality, addressing the difficulty of acquiring relevant data. He stated, “The data we need to do our business first is not easily accessible, it hard to get, and when you finally get it, it might not be quality enough due to some factors.”
The transformative power of technology was emphasized, underscoring its role in dismantling barriers, empowering funding strategies, enabling data-driven decision-making, and shaping the tech ecosystem. Louis stressed the importance of data literacy and cautioned against succumbing to “noise,” emphasizing the need to extract meaningful insights from data to guide effective decision-making processes. “The first thing is that you will listen to the noise. If you do not read the data, you will believe the noise” he further stated, “You have to understand the story behind each data.”
The investors also highlighted the significance of strategic thinking and preparedness among founders. Beyond passion, founders must proactively anticipate and address potential obstacles. By utilizing data as a key resource, they can anticipate and develop solutions for worst-case scenarios, strengthening their resilience and increasing their chances of success.
Ruth Okah drew attention to an emerging trend that is set to shape the tech ecosystem—ESG investments. International investors are increasingly favoring companies that prioritize environmental, social, and governance factors. She stated, “One of the things I noticed from the invested trend from the international community and investors is the liken for ESG investment.”
Furthermore, it was projected that local investors, backed by influential stakeholders, will wield significant influence in shaping policies and influencing market dynamics in the years ahead. Their growing presence was emphasized, with the statement, “Local Investors are growing and will be a major shaper of the Ecosystem in the next few years because they are influential.” He further stated, “Strong influential people will back these local investors, and they will shape policies and influence the market.”
Tope Ajao highlighted the crucial role of academia and research in driving technological advancements. While regions like Silicon Valley have thrived due to robust research institutions, it was acknowledged that other parts of the world face limitations in this regard. Bridging this gap and unlocking innovative solutions require fostering collaborations between academia, investors, and start-ups.
“Some of the biggest advantages you will see in various parts of the world where they are big if you start from Silicon Valley, they had those schools that were doing a whole lot of research for them.” He further stated, “One of the biggest problems we have in this part of the world is that research is the reason we can solve the problem because the academia isn’t big enough.”
The conversation also touched upon the positive effects of the “Japa” wave, referring to the trend of people leaving Nigeria for first-world countries. This emigration has helped reduce the unemployment rate in Nigeria and compelled employers to modify their requirements to fill the talent gap left behind by skilled individuals. Additionally, the “Japa” phenomenon has contributed to a significant increase in diaspora remittances, providing a boost to the Nigerian economy.
In conclusion, the event inspired attendees to embrace technology as a catalyst for entrepreneurial success, while emphasizing the importance of collaboration and resourcefulness in overcoming challenges and driving innovation forward.
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