Nurturing Innovation: Building and Scaling African Startups with Expert Support with Thabiso Foto

[00:00:00] You're listening to the Unlocking Africa podcast. Professionally, I started my career at Deloitte straight out of high school and I qualified as a Chartered Accountant in 2010. Most recently, I have been working on designing and implementing our impact strategy.

[00:00:16] And yeah, so looking after finance operations and now most recently impact. We're very, very bullish about women. We're going into a space where we acknowledge the barriers that women face, the barriers that African entrepreneurs face in general. We're not looking at what founders need to do,

[00:00:33] we're looking at what we can do and provide support to be able to enable entrepreneurs to be investable. Stay tuned as we bring you inspiring people who are unlocking Africa's economic potential. You're listening to the Unlocking Africa podcast with your host, Terser Adamu.

[00:00:55] Welcome to the Unlocking Africa podcast where we find amazing people who are doing amazing things to unlock Africa's economic potential. Today, we have Thabiso Foto, who is the Chief Financial Officer at Founders Factory Africa, which is a hands-on, early-stage tech investor backing pan-African early-stage

[00:01:19] founders to deliver local solutions to local challenges. Welcome, welcome, welcome to the podcast, Thabiso. How are you? Thank you so much, Terser. Thanks for having me and thank you for the invite. I'm really excited to be here.

[00:01:32] It's a pleasure to have you on the podcast. Where in the world are you today? Today I'm dialing in from Johannesburg, South Africa. Amazing, amazing, amazing. So how's everything going? Very good. We obviously are in sunny Johannesburg. It's winter actually but it's very sunny.

[00:01:51] And yeah, everything's going very well. Work on the work front all good. I don't know if you've seen our most recent announcement which went out on Monday. Oh, don't say too much too soon. We'll get to that. Let's start from the beginning. So let's start from the beginning.

[00:02:09] I was hoping you could introduce yourself and tell us a bit more about Thabiso Foto. Yeah, starting from where I was born. Born in Zimbabwe. I spent the first two decades of my life in Zimbabwe and I'm about to clock

[00:02:27] another two decades. I'm exposing myself here in South Africa. My mother is Zimbabwe and father is South African and I'm blessed to have experience living in both countries. Professionally, I started my career at Deloitte straight out of high school and I qualified as a chartered accountant in 2010.

[00:02:45] So my foundation is very much from an accounting firm where I learned obviously the finance bits, risk management, how to run businesses, how to run finances, and just understanding business risks and how they are managed through the audit

[00:02:58] clients that we served. And there I looked, I audited a number of different companies across different sectors. And then the second, I'll say the next decade was a combination of working in high growth entrepreneurial companies as well as large corporates operating in a number of African countries,

[00:03:17] spread across mining sector, banking and investments management. Currently, I'm leading finance and operations at Founders Factory Africa as the CFW. Most recently, I have been working on designing and implementing impact strategy. And yeah, so looking after finance operations and now most recently impact

[00:03:38] at Founders Factory, I'm currently managing the investment of approximately $115 million across our key strategic initiatives which are mainly deploying capital and operational support to startups in Africa. So I don't know if you want me to just go a bit

[00:03:56] about Founders Factory or we'll get into that later. Oh, we'll get into that straight away. So you're giving us great insight into your professional and personal life, which has led you to the work you're doing now at Founders Factory Africa. So yeah,

[00:04:09] can you tell us about Founders Factory Africa, its mission and goals on the continent? Yeah, so our vision really is to create or build a thriving startup entrepreneurial ecosystem across Africa. And our mission really is to enable founders to go further faster.

[00:04:32] So we call ourselves a pan-African, investing in transformative early stage tech ventures all the way from concept to pre-series A. We're looking for ideas and startups that have the potential to yield outsized commercial returns alongside delivering impact at scale.

[00:04:51] Our target is over the next five years really we're looking to invest in over 130 startups with approximately a third of this fund already reinforced to find women co-founded and women-led startups. So we're very, very bullish about women. We're going into a space

[00:05:09] where we acknowledge the barriers that women face, the barriers that African entrepreneurs face in general. And really that's what we are here for. And that's what we do, which is really our mission and vision to really spur entrepreneurship, accelerate or rather

[00:05:25] catalyze innovation in the continent and really see ourselves contributing and enabling an ecosystem that really drives and supports entrepreneurship. Awesome, awesome. So it's clear what you do at Founders Factory Africa in terms of your investment model. It's quite unique. So I was

[00:05:44] wondering, can you elaborate on what you feel makes a standout from traditional investment approaches and how that benefits the early stage entrepreneurs that you work with? Founders Factory Africa is really, I would say our investment model is really anchored on what we

[00:06:02] believe are the key needs of African entrepreneurs. Firstly, entrepreneurs need capital to fund their ideas. Secondly, entrepreneurs need operational support. Once you've got the capital, how do you move from building your venture given how difficult it is to just find great talent?

[00:06:23] So the second thing that we identify as a big need is the ability to attract talent into your business. And therefore we provide the operational support across the key disciplines that entrepreneurs would require to go from a concept to actually building a product and launching

[00:06:39] it into the market and growing to other markets. And lastly, we look at how can we broker partnerships? Again, as an entrepreneur, you have the capital, you have launched your product into the market. Sometimes it's very difficult to actually just really access distribution channels

[00:06:56] that larger corporates would traditionally have. So we're also looking at ways to open up those doors, unlock those doors for entrepreneurs to be able to accelerate their speed into the market. So our model is really anchored on those three key needs and therefore we then provide the capital.

[00:07:13] We provide a team of experts across product, across growth, investment readiness, business development, talent operations to support the founders along their journey of moving from an idea to actually having a product in the business that actually is

[00:07:31] compelling and is investable by other investors in the market. So how I see our model being different is that we are not looking at businesses that are already developed. We're not looking at businesses that are already de-risked. We play a role in de-risking those startups,

[00:07:48] those businesses and de-risking the founders themselves. We're not looking at what founders need to do. We're looking at what we can do and provide support to be able to enable entrepreneurs to be investable. So when you look at other traditional investments,

[00:08:02] they are looking at businesses that at least have a track record of profitability or have already been in the market who have a lower risk. And as such, you will find that our model

[00:08:14] is different in that even the way we've set up the team, the team that we have, it's more like an extension of the entrepreneur's team as opposed to traditional investment analysts who are looking at an opportunity, whether it is an opportunity that they can invest in or not.

[00:08:31] We're looking at what role can we play to actually build a venture that is backable, that is investable, that becomes attractive to the next stage of investor. Thank you for that. So you mentioned that your model focuses or anchors on the key needs

[00:08:44] of African entrepreneurs which obviously enables local solutions to local challenges, which I guess is a focus of founders factory Africa. So how do you believe this approach contributes to say sustainable development and innovation across the continent?

[00:09:01] So firstly, we are actually looking at how entrepreneurship is in itself an engine to firstly job creation. I think there's enough evidence that show that almost 80% if not more of jobs across the continent come from informal and formal sector. So entrepreneurship is an

[00:09:22] engine to job creation. We see innovation also as not just innovation and entrepreneurship, a lot of the new ideas, new opportunities, new products that we see in the market come from entrepreneurship. So we've seen entrepreneurship as another lever or rather a way to improve access

[00:09:43] to products and solutions to improve equality, address the inequalities that exist across Africa. Technology has really done a lot in terms of democratizing, if I can call it that democratizing access to products and solutions. We've seen how technology has also played a role in financial

[00:10:01] inclusion. The majority of Africans are underbanked or unbanked, but we've seen how technology has really contributed to improving access to financial services. So we see entrepreneurship as a way to one, catalyze innovation, two, to open up new markets, democratize

[00:10:21] new products and solutions, but ultimately improving well-being and really improving incomes of people in general. So we definitely see that as a key enabler and a key catalyst to economic growth, not only for Africa, but for all economies. Fantastic. So you touched on some

[00:10:40] key points in terms of job creation, financial inclusion, democratizing new products and solutions, which I guess are all key features of some of the companies that you support. So with such a diverse portfolio of companies that you manage, how do you navigate some of the various

[00:11:02] challenges that you face in different markets across different companies that you're working with? I think it's important to note that Africa is firstly 54 different markets. We're not present in all 54 markets, but I'm proud to say we are in probably about 10 African countries so far where

[00:11:22] we've actually made investments. And those different markets have different challenges. They have their own different complexities. We are a company that is led by entrepreneurs and we say we are led by entrepreneurs, especially local entrepreneurs. So we're focusing on African

[00:11:38] entrepreneurs and the reason we focus on African entrepreneurs is really we're looking at entrepreneurs who have a deeper connection to the problem. So these are founders who understand their local context. These are founders who understand the local complexities within

[00:11:52] the markets that they're serving. They understand the dynamics of navigating government. They have all the deep insights that I probably wouldn't get if I mentioned earlier I was born and raised in Zimbabwe. I've been living in South Africa for the last maybe 15 to 20 years. I may not have

[00:12:10] the understanding that an entrepreneur in Nigeria has. And therefore what we've done as Founders Factory Africa is make sure that we have representation in all the key markets that we're serving, but we are led by the entrepreneurs themselves. And therefore when we look at

[00:12:24] our portfolio we have about a third of our portfolio in Nigeria, a third of our portfolio in Kenya, and another third of our portfolio in South Africa. We do have a few other countries that we have

[00:12:36] within our portfolio Uganda, Ghana, Egypt, but the three big key markets are South Africa, Nigeria and Kenya. And therefore the entrepreneurs in those markets what we're looking at is an entrepreneur who understands that market. If you're solving a problem in Kenya or East

[00:12:51] Africa you need to really understand the market dynamics because that's the entrepreneur that will be resilient enough to know exactly how to work or how to overcome the barriers in those markets. In addition to that we have a team I mentioned earlier we provide the operational support.

[00:13:09] We have a team in those key markets who are locals, who are Kenyans or Nigerians, South Africans or someone in Ghana who will be the person to actually handhold our entrepreneurs to make sure that they navigate those complexities together. So we are not reliant on

[00:13:24] one geography to be able to serve the entire continent. We acknowledge that as Tabisou sitting in South Africa I may not have the context for a Nigerian market and therefore I need to work

[00:13:36] with an Nigerian team that understands that local market to be able to navigate those challenges together with our entrepreneurs in those markets. Fantastic. So as you mentioned you are operating across 10 different markets which is highly impressive. So in order to operate within such a

[00:13:53] range of markets it does require strong collaboration and as you mentioned representations I was wondering if you can talk us through how you foster collaboration between say corporates, investors and startups in those markets to enable success in the specific markets.

[00:14:11] So there's so many ways we do that. So firstly the fact that we have been able to raise funding from different sources of capital. So we are backed by large corporates, we have Standard Bank

[00:14:25] South Africa which is a bank with probably the largest footprint in Africa. We are also backed by healthcare companies like Net Care and Johnson & Johnson Impact Ventures and most recently MasterCut Foundation as well as Small Foundation. So just from the investors that have

[00:14:41] backed us as Founders Factory Africa we have forums where we actually share our learnings in terms of what we see as Founders Factory in the entrepreneurs that we are serving, in the markets that we're

[00:14:52] serving sharing those lessons with our investors who may or may not necessarily be in those markets but for what they also have in the market and what they're seeing within their teams we also have opportunities to share with each other. We also have a number of different platforms

[00:15:08] that we use for collaboration. I don't know if you're familiar with our podcasts, we also have that increasing podcast, we have the Not So Secret podcast where again we share our different approaches, our frameworks that we apply as we are doing venture building and incubating

[00:15:26] businesses and accelerating businesses in different markets. This is a platform work that we use to share our lessons and not just for us Founders Factory but what other entrepreneurs, what other ecosystem players and actors are experiencing. We get an opportunity to also

[00:15:40] speak to them and for them to share their lessons. This is another example of how we also just share our lessons which is your podcast just again opportunities where we're trying to change the narrative or shift the narrative to start telling our stories and sharing our

[00:15:56] experiences and sharing what we're seeing in the markets with the broader ecosystem is another way that we collaborate with the different stakeholders but also we see government, we see legislators and regulators as a key component of markets without those players. It's very difficult for

[00:16:13] products to really get into the market and really move from an incorrect demand to actually like a properly established market right. So we see government as a big, big role player and a number of my colleagues are always participating in conversations whether it's through a new

[00:16:29] startup act bill that is being enacted those other areas where we actually collaborating but the entire ecosystem, I think the startup ecosystem is one place where I've really seen a lot of collaboration through events, through a number of round tables where people are

[00:16:45] really just engaging. We co-invest as well with a lot of other accelerators and incubators within the different markets that we're serving. So we see a lot of sharing of ideas,

[00:16:57] a lot of sharing of knowledge and a lot of different platforms that exist and are open to all the different actors within this ecosystem to work together and share those opportunities. Awesome so you touched again on your collaboration and backing by Mastercard Foundation and Johnson

[00:17:15] and Johnson Impact Ventures. You've recently secured significant funding from these two organizations. So how do you believe this additional funding will contribute to the organization's expansion and the support that you offer African founders?

[00:17:30] So this has been a great endorsement for us in terms of the model that we've been operating in terms of the work that we're doing to really drive entrepreneurship and ultimately driving prosperity across the continent. What this new investment allows

[00:17:46] to do is our previous model we used to invest, so I mentioned earlier we invest cash and services and just to clarify our offering we invest up to $250,000 of equity financing with an additional $150,000 of an undilutive capital. What that means is we're now able to provide a loan

[00:18:10] that is very favorable compared to a lot of other loans that would be available in the market. So this new investment what it really allows us to do is to provide loans at very favorable rates to entrepreneurs with the intention of really allowing the entrepreneurs to access

[00:18:26] the financing that they really need to actually build their products, to build their teams without the pressure of having to repay immediately. So we've been able to actually structure an instrument that allows us to add a consertional loan in addition to the $250,000

[00:18:42] equity financing that we provide to entrepreneurs. So one, it allows us to really provide that consertional loan. Secondly, it allows us to provide our operational support for free. In the past we used to actually take equity for that services element that we used to provide

[00:19:00] and that services element being us being able to provide the hands-on support that we provided the entrepreneurs from building the product to launching their products to going into the market, investment readiness. All those services that we used to support to provide

[00:19:15] in exchange for equity, we are now providing them for free. So that's what some of this catalytic capital allows us to do which then helps us to really help our entrepreneurs focus on building their products, focus on growing into other markets without necessarily feeling that investors

[00:19:32] are here to take equity and not necessarily to partner with them on their journey of growing their businesses. Fantastic, I guess one key thing which we forgot to mention was the value or the amount of investment received via Mastercard Foundation and Johnson & Johnson. So in total,

[00:19:49] we have received $114 million dollars, wow, the two investors. So in addition to the services that we're now able to provide for free as well as the catalytic loan that is non-dilutive to founders. The second thing is that we're now able to double down on our support

[00:20:09] to women-led or women-founded startups. So we're really becoming a lot more bullish in terms of supporting women-led startups. We have actually reinforced quite a significant portion of this fund to fund approximately 30 startups that will be women-led or women co-founded.

[00:20:29] The third thing that this capital also allows us to do is it gives us the ability to provide that patient capital that entrepreneurs really require as well as for us to focus on impact priorities

[00:20:44] that we have developed together with our partners. And if I can just maybe highlight the key priorities that we're looking at, so in addition to really building businesses that have that potential to drive commercial, outsize commercial returns, I spoke about how we're

[00:20:58] looking at businesses that also deliver impacted scale. And there are five key impact priorities that we're focusing on, the first one being businesses that have the opportunity to really deliver dignified and fulfilling work and improved livelihoods. The second one is improved

[00:21:14] healthcare access and outcomes. The third one is we're looking at opportunities that also allow us to enhance climate adaptation and resilience. The fourth one being enhanced financial inclusion and lastly, really enabling entrepreneurship and business growth. So with these two new investors,

[00:21:31] we've been able to now kind of come up with a comprehensive impact strategy that allows us to really deliver the sustainable impact that we want to see across the continent. Fantastic. So you mentioned that you're able to provide alone affavorable rates

[00:21:48] to entrepreneurs. Renewed or finance is a huge challenge for African entrepreneurs. So in your view, I guess we can include finance, but in your view, what are the most pressing challenges that early stage African startups, entrepreneurs face?

[00:22:04] Sure. That will take a lot, but I'm going to try and focus on a few. There is so much. I think you already touched on access to finance. Access to finance is a really, really big problem. We already know that it's less than 2% of global VC funding.

[00:22:23] It comes to Africa. So African entrepreneurs, we consider African entrepreneurs really as an underserved group of people when it comes to access to finance. And that problem is even deeper when you're looking at just funding that goes to women-led startups. And that's why we're now

[00:22:39] focusing our efforts on finding ways to increase the participation of women in entrepreneurship and in tech in general. So that's one. The access to financing is one, but there's the other piece, which is really coordination of that finance. The other day I remember I was just

[00:22:55] thinking about how much funding or how much assets under management currently sit in Africa. And in South Africa as a start, South Africa is about 10 trillion runs, which I think works at about 500 billion US dollars of assets under management. If we allocated just 1% of that

[00:23:15] to startups or SMEs or just entrepreneurs that are not yet perceived to be lower risk, that would be about 5 billion dollars of funding that would go to this space that we currently in, which is the entrepreneurship space and the tech ecosystem. In total last year, we raised

[00:23:36] $7.5 billion and 80% of that money was coming from external. It was coming from the US and Europe. So when I look at just how much funding or how much AUM currently sits within Africa,

[00:23:50] it is quite huge. But we I think we lack coordination of that funding. So in terms of the financing, there's the access piece, but there's also the coordination of that funding of that capital. Secondly, I would say entrepreneurs really struggle with access to talent. Again, a lot of

[00:24:08] entrepreneurs would have let's say they've accessed the financing, they've got the capital, they now have the $250,000 or $300,000 that they've got to now find the ideas to really attract good talent when the budget is still very small is very, very difficult. So again, what we've done

[00:24:25] is look at how can we support entrepreneurs to be able to access that great talent at these early stages and really get them to focus on their businesses and building the product that they need to launch. So that's why part of our value proposition is really providing

[00:24:40] them with the talent because it's so hard. And oftentimes we see entrepreneurs struggling with just the churn, right? Somebody comes maybe it's their first job. The first job they get is within the startup and then within six months that person is leaving. So again, just retaining that

[00:24:55] talent is another big challenge for for entrepreneurs. The third thing I would say is access to markets. Again, if you're an entrepreneur, you have a new product, just getting your product into

[00:25:05] the market is very, very difficult. So one of the ways we're also looking at solving for that is brokering partnerships with corporates. The investors that are already invested in Founders Factory Africa, one of the key things that they're doing is opening their doors,

[00:25:19] opening their distribution channels to the startups so that they can start to launch their pilots but actually start to sell their products through their customer base. So those I would say are the three key top challenges that I see entrepreneurs facing within the market. But

[00:25:36] obviously that list is quite long. We just focus on those three key needs because we believe if we focus on those three, we should be able to really build businesses that can become backable, that become investable, that other investors can look at and see as an appealing investment

[00:25:52] opportunity. Fantastic. You touched on a key point which was access to distribution channels or access to markets. So if you look back at the investment that you've received from Mastercard Foundation and Johnson & Johnson, will this capital see you or allow you to

[00:26:11] expand into more African markets? Absolutely. We are currently in South Africa, Nigeria, Kenya and Ghana. We've got a few one staff member in Ghana. That's where we have presence in terms of offices. However, we're investing across Africa. So we're looking at opportunities

[00:26:30] from everywhere. We have partnered with other accelerators and incubators and markets where we currently not present. What we are eyeing for the next maybe towards the end of this year or early next year is North Africa. We haven't quite decided exactly which country we're going to

[00:26:48] be in but definitely North Africa is a region that we believe is important for us to target not only because it's a big market on its own, but we have also seen a lot of activity in terms of

[00:27:02] entrepreneurship. There's a lot of opportunity for innovation in that market and there's a lot of interest from external investors. Therefore, we see that as ripe for us to be able to participate in that market. So that's currently where our eyes at North Africa.

[00:27:19] Fantastic. So you've detailed your involvement across different African markets. So how do you assess and navigate the varying regulatory and business environments in these different African markets? It's difficult. However, the way we look at it is internally,

[00:27:37] we've got our own legal people. We've got internal legal counsel, but they also work with external counsel in different markets. Regulation legislation is very nuanced in the different markets and therefore I might understand the regulation within the South African market.

[00:27:55] And we have our head of legal who's based in Nigeria. However, they might not have the deep understanding of what's happening in Morocco, for example. So we partner with legal counsel in those markets to really support us in understanding how do we navigate those markets.

[00:28:14] We also look at partners, other incubators, other accelerators who are already in the markets and who understand the complexities and the nuances of those markets to support us in those areas. But yeah, essentially, I mean, like I said, we've got our presence currently is really

[00:28:29] in four countries, but we have partners that we're working with in the different markets that we're investing to be able to navigate those challenges. With the partners that we have that are backing us, our investors that I mentioned, they also have presence in

[00:28:44] almost all those different markets. And they also pretty much are very supportive and in terms of not only opening doors for us to the regulators in those markets, but also being part of the conversation to support us, to lead on some of those conversations,

[00:28:59] to make sure that we have the right partners, the right people and the right advice to be able to navigate those markets. Awesome. So once you've assessed and navigated the regulatory landscape in those markets and you're fully operational, social impact is a

[00:29:16] huge part of what you do. So how do you go about measuring the social impact of the investments that you're making in those markets? Yeah, I mentioned earlier that we have developed an impact strategy that obviously has taken into account all the impact priorities,

[00:29:33] not only for FoundersFacture Africa, but for the investors that we're working with. And the measurement framework itself, it would be probably another podcast to go through. But I'm just going to highlight a few key metrics that we look at. So firstly, we're looking at,

[00:29:48] as I mentioned, our five impact priorities, but we're also looking at how do we embed impact across all our activities? We are building a team right now. We've got our impact director, but she's also going to be building a team that will make sure that we,

[00:30:02] as FoundersFacture Africa, are embedding impact across all the key activities, whether through the active support that we provide to our startups, the technical support and capacity building to our startups to ensure that they incorporate impact in how they work.

[00:30:18] And impact comes in many forms. One, it is in terms of the entrepreneurs that we're actually supporting, how are we including entrepreneurs that are underserved or that are currently sitting in underserved markets? Secondly, how are we thinking about women?

[00:30:33] How are we investing in women? And we are actually targeting to push our currently, we've got our portfolio at 20% women led or women core founded startups, which is actually a very good number when we compare to what the benchmarks in the market are currently sitting

[00:30:50] at. But we're looking at actually improving that number from 20%. And we have an ambitious target to actually move from 30 to 40 to 50 over the next couple of years. So gender inclusion is a

[00:31:00] big component in how we're looking at investments. And then third thing is we're looking at how our investment is sparing job creation, direct and indirect jobs, and not just jobs but dignified jobs with reliable incomes. We're also looking at the products and services or products and

[00:31:18] solutions that are being developed by our entrepreneurs. How are they actually reaching the different markets, underserved markets? And what challenges are they really solving across the continent? So I spoke about, for example, access to healthcare or improving healthcare outcomes. I spoke about financial inclusion, climate adaptation and resilience

[00:31:39] type of opportunities and enterprise growth. So some of the startups that we're looking at in themselves actually looking at financial inclusion and improving access to finance to other SMEs, for example. So there's many dimensions and very broad lengths that we're

[00:31:57] actually looking at impact. And we've developed a very comprehensive measurement framework that will guide us in terms of how we're going to be measuring impact across these different key priorities. Thank you for that. So you mentioned that you look at impact across many dimensions. One

[00:32:13] of them is measuring the value that you've added to those business. So as founders factory expands, how do you plan to maintain a balance between scaling the organization and also maintaining the personal support that founders factory offers startups?

[00:32:32] The way we also work is we understand that we may not be able to actually reach all the markets that we want to serve by having in-person physical contact with entrepreneurs. So we have a number of initiatives that we have developed, but we're also looking to

[00:32:48] continue to drive and hopefully we can scale. We're developing playbooks, that's one area, playbooks across all the key disciplines. So within the growth space, we are developing playbooks that we actually have already launched and published. We have what we call African

[00:33:06] setup hub that we're also looking to use as a platform for entrepreneurs to be able to just access material on how to think about product. We've published even our traction framework that we provide entrepreneurs guidance to think about product market fit, for example, in terms of how

[00:33:25] do they think about building their product, their strategies and how do they what are the levers in terms of moving from just having a product but actually having a product that a market actually needs and that they're able to grow their customers and retain their customers.

[00:33:39] And we publish a lot of these guidelines and playbooks across different media. The other way we're also looking at scaling is with this additional investment that we have, we no longer just looking at experienced entrepreneurs or maybe second time founders that have both businesses,

[00:33:58] we're looking at how do we also educate the ecosystem around entrepreneurship? We're actually looking at launching our entrepreneurship academy in the second half of the year. And the way we're looking at that entrepreneurship academy is also working with

[00:34:13] partners in the different markets who are already providing some sort of training but giving them some of the tools that we've already used that we know are successful in terms of building businesses, in terms of human-centered design, for example, and how entrepreneurs

[00:34:30] should be thinking about building their products. So we're looking at working with partners, we're looking at developing playbooks, we're looking at using various platforms to just share our frameworks, share our playbooks to be able to really contribute to a broader market and

[00:34:46] markets that we may not be able to serve in person and we're able to just at least reach them through the digital platforms that we have. Brilliant. So if we take a few steps back and look closer at, I guess, the initial stage of

[00:35:01] identifying startups, how do you go about identifying promising startups from different regions within Africa? And I guess what criteria do you use to assess their suitability? Firstly, how do we look for these startups? Various ways we look for these startups. A lot

[00:35:20] of our startups are referrals that come via our network of whether it's the team itself, our team's network, other accelerators within the ecosystem. We have had very good startups that end up going into an IC that come through Twitter. So there's various channels that we

[00:35:39] have used to attract startups to apply to our programs. So what do we look for in founders? We are looking for, I think I mentioned earlier on that we're looking for entrepreneurs who have a

[00:35:50] deep connection to the problem. We've got a venture design team who have just recently launched Gen F and Gen F is where we are looking at exploring concepts or founders with concepts and we give them a test and lend budget. We go through a 12-week sprint with them

[00:36:10] to actually really test their idea and if it's a great idea, they actually can apply for a further investment. So that's one way we source businesses or ideas into founders

[00:36:23] of Africa. And this Gen F is something that we launched this year prior to that we had a team of venture designers whose job was really to ideate concepts and really come up with ideas

[00:36:34] and how they think about it is really applying a human-centered design thinking in terms of how they actually come up with these concepts and looking at big problems, unmet needs in different markets and finding solutions and really validating their hypothesis around those problems.

[00:36:52] And once they've done that and they see that there is actually a really big unmet need and there's a big market opportunity, then that's the opportunity that we then fund and actually build from a concept, actually building a product and getting it into the market.

[00:37:06] We then find a co-founder who then takes that business forward where we retain an equity stake and then they take the majority stake up to 80% in that business and they go on to actually build that business. The Gen F now that we've recently launched, we are partnering

[00:37:21] with founders who already have concepts but they haven't built up the concept. We then work with them through that 12-week sprint, give them a test and learn budget, they get a stipend to really allow them to focus on building up that concept.

[00:37:34] And then if they succeed, they go through to the next stage where they can unlock it for the $250,000 to build the idea into a product and adventure. And then we have the pre-seed to pre-series A,

[00:37:46] this is where businesses are already, it's a founder who already has a product and potentially a product that's already in market. And we're looking at businesses that have validated their product into the market and they're really looking at us to support them

[00:38:03] in terms of getting that product market fit and really getting them to scale into the market. We have partnered with founders who are entrepreneurs themselves, we've partnered with operators who are people that probably worked in a startup as a product lead or

[00:38:19] as a chief technology officer or they were an operator in some form or shape but now are looking to actually launch their own product. We have also technical people who may be a doctor

[00:38:30] who is looking at a new and innovative way of improving radiology or improving certain health outcomes in various ways. So we're looking at really some experience of entrepreneurship, we're looking at technical people who understand the problem that they're trying to solve,

[00:38:47] we're also looking at operators who have worked in a startup and understand how products are built, understand how you move from having a product and launching it into the market and understand the complexities and the nuances of building a startup in the markets that they're

[00:39:04] looking to build for. So in terms of the entrepreneurs that's kind of like the maybe that gives you the different archetypes that we're looking at in terms of the entrepreneurs that we look to fund. We look for businesses that have a clearly articulated

[00:39:17] problem that they're looking to solve and that they've articulated the solution and that the solution is clearly meeting the unmet need and meeting that problem and solving that problem. And we're looking at businesses that have where there's a big market opportunity,

[00:39:35] again is there an opportunity for the product to really scale and businesses that really can scale beyond borders. So those are some of the things that we look at in terms of businesses that we're looking to back. On our venture

[00:39:48] board in our venture scale, sorry I mentioned like just from concept to pre-series A, that's where we focus on tech enabled businesses. So tech is a really, really big component and critical part of the businesses that we're looking to back because we believe technology

[00:40:04] is that key component to really accelerating growth and accelerating scale in different markets. So technology is a key part of the businesses that we're looking to fund. I mentioned earlier that we're looking at aspiring entrepreneurs as well who may not have the experience that the other

[00:40:20] experienced entrepreneurs that will look to get within our seats to pre-series A stages. Those are entrepreneurs that will go through our entrepreneurship academy which we're looking to launch in the later parts of this year. Okay so from what you've mentioned it's clear

[00:40:35] that working with startups, you have access to some of the most current trends in the space. So if we look past the current and look into the future where do you see Founders Factory Africa

[00:40:46] say in the next five years time? Five years time. Okay so maybe let me start with Founders Factory is not even five years old yet. Founder in 2019 started with 32 million dollars. We have

[00:41:04] recently closed $114 million. Five years from now I would like to see us closing $500 million at least but in terms of the role we are going to play I think we're going to continue playing this role

[00:41:17] because we still have a long way to go. In my view if we're currently sitting at 1% of global funding, global VC funding coming into Africa, how do we move it from 1% to 5%

[00:41:29] to 10% to 15% and we know those things take a very, very long time. So I do see us still doing our bit in terms of contributing to how that system is going to change. If we look at the

[00:41:42] Silicon Valley now I mean it's over 70 years of change that has been influenced by different players in that ecosystem be it entrepreneurs who became very successful and government that has really catalyzed the development of markets in that space. So I do think that we still have a

[00:42:03] long way to go to build successful entrepreneurs to start telling successful stories of entrepreneurs unicorns coming out of Africa, jobs being created, changing just mental models in terms of perception of risk, perception of doing business in Africa. I see us playing a really big

[00:42:24] role in terms of enabling entrepreneurship, lowering barriers to entrepreneurship, catalyzing innovation and being at the forefront of improving or increasing the participation of women in entrepreneurship, women in tech. Yeah and ultimately really contributing to economic

[00:42:44] growth for not only the countries that we're in but just for the entire continent and for us to be able to look back and say the impact priorities that we set for ourselves. We've been able to achieve them, jobs have been created, more women are participating in entrepreneurship,

[00:43:00] we've improved health outcomes, improved access and affordability to healthcare. For me it's a long-term game so five years from now hopefully we can just continue to mobilize capital for us to be able to continue to doing the work that we've just started to do.

[00:43:15] Brilliant, brilliant and I look forward to seeing it happen. Seeing what you've achieved in such a short period of time. Fantastic to be so. Quote of the week. As people we often have quotes, mantras, proverbs or affirmations that keep us going when times are challenging or when

[00:43:32] times are good. Do you have one that you can share with us today? I have maybe one that I always, always go to. Brilliant. It actually came from one of my siblings, one of my brothers and he

[00:43:46] always says if there's one percent chance of success in whatever you're trying to do just take it. For me I think it's really one of the many mantras. There's a couple but I just chose that

[00:44:00] one because I feel like it is the one that has really pushed me to venture into areas that others might not venture into that they might feel risky or even just applying for an MBA at Oxford.

[00:44:15] For me it was if I have that one percent chance of success I'm going to take it. Coming into Founders Factory Africa we're dealing with uncertainty all the time. We're dealing with entrepreneurs who are facing risk or failure all the time but

[00:44:30] I just use that from time to time to just allow me to just take that chance whether it's saving an entrepreneur or helping an entrepreneur to get funding whether it's

[00:44:40] in my own personal life. I'm trying to do something that I think is super risky. I use that a lot so that's that's my go-to mantra. Fantastic brilliant way to close today's conversation.

[00:44:52] Do you have any closing remarks, final course to action for people who are listening and might be interested in the work or joining the work or finding out more about what you do

[00:45:03] at Founders Factory Africa? Yeah I'll just close by saying firstly thank you so much for the opportunity to chat to you to tell our story and really just tell this positive African narrative

[00:45:19] and sharing it with the world. So thank you so much for the opportunity. It's been a pleasure chatting to you. Thank you. To all the listeners I hope I have left you with something to think about whether you're an entrepreneur who's looking to venture into entrepreneurship,

[00:45:35] whether it is a woman who is thinking about how do I even start or where do I go to find women entrepreneurs, whether it's a student who is thinking about what career to take and investors who are thinking about venturing into venture capital who are probably sitting

[00:45:55] on piles of money but they think it's too risky. I hope that I have left you with something to think about in terms of how we can all play a role in coordinating capital, in improving access to

[00:46:07] finance to Africans to entrepreneurs and also just rethinking our models, rethinking about how we allocate money, how do we actually all start to become maybe radical in how we change things, how we change systems, how we change mental models to build the Africa that we want.

[00:46:29] That's it from me. Thank you. It's been a pleasure having you on the podcast. Thank you for joining us and sharing your invaluable insights into the dynamic world of African startups and entrepreneurship. I'm looking forward to seeing the impact founders Factory Africa will have

[00:46:45] on the continent in the near future. So thank you for joining us today Tabrice. It's been a pleasure. Thank you so much Tessa and thank you to your listeners. We will speak soon. Cheers.

[00:46:57] Thank you to everyone who has listened and stayed tuned to the podcast. If you've enjoyed this episode, please subscribe, share or tell a friend about it. You can also rate with yours in Apple podcast

[00:47:08] or wherever you download your podcast. Thank you and see you next week for the Unlocking Africa podcast.