Corporate Venturing: The New Game Changer

On 21st September, Global Corporate Venturing (GCV) held its first GCV Asia Congress, entitled The Rise of Dragon & Tiger Tech in Hong Kong. GCV Asia Congress brought together corporate venturing leaders from Russia, China, South Korea, Japan, Taiwan, Philippines, Malaysia, Thailand, India, Indonesia, Australia as well as the USA and Europe to see how Asia is developing the innovations of the future through corporate venture capital. Sadly, the Tony Elumelu Foundation was unable to attend because we are in the middle of organising the 3rd Annual TEF Entrepreneurship Forum, taking place 13-14th October 2017, in Lagos, Nigeria. It would have been interesting to learn how the Asian corporate venturing community is investing in the next generation of innovations.

However, in May this year, I did have the opportunity to represent the Tony Elumelu Foundation at the GCV Symposium in LondonJames Mawson, Founder GCV had been following the work of the Foundation and the Entrepreneurship Programme. He was intrigued by its ambition, why is Tony Elumelu doing this? What can the large corporations, universities and governments learn from the Foundation, pioneering structured philanthropy in Africa through entrepreneurship. How can it spark the large corporations who see Africa as an opportunity to support entrepreneurs?

James invited the Foundation to share its story with over 400 business leaders from the corporate venturing and wider high growth business ecosystem corporations, managing more than $20 billion in venture assets, for parents with aggregate revenues of at least $2.5 trillion at the GCV Symposium. Included amongst them was Softbank, Johnson & Johnson, C&A Foundation, Microsoft Ventures, Anglo American, GE Ventures, EIB Innovation to name but a few. As well as a packed agenda with top speakers, the symposium included one on one networking and meetings; and the launch of 2017 GCV Powerlist of the Top 100 CV Industry Leaders. This was certainly a good avenue to learn, network and share our work with the global corporate venturing community.

In 2015, the Tony Elumelu Foundation committed $100 million to empower 10,000 African entrepreneurs over ten years. In the three annual cycles so far, we have supported 3000 Africa start-ups with training, mentoring, funding, and membership to Africa’s largest network of entrepreneurs. There innovative ideas and ingenious tools are solving some of the continent’s most challenging problems. Our programme is inclusive and diverse – all of Africa’s 54 countries are represented in the selected pool and over 36% of the entrepreneurs are women business owners. Our programme is multilingual and sector agnostic with over 30 sectors represented.

In the first year, we received over 20,000 applications; 2016 over 45,000 applied and in 2017 this number had increased to 93,000 from 54 African countries. But every year, we are constrained to supporting only 1,000. We want to find ways in which we can support the tens of thousands that we have been unable to select because they deserve a chance to realise their dreams of starting a business. The Foundation invites the corporate venture capital community gathered for the Global Corporate Venturing Symposium to work with us to enable these start-ups and early stage enterprises realise their dreams to start and scale a business.

We have the largest data base of African entrepreneurs: 3000 selected entrepreneurs in 2015, 2016 and 2017; further 20,000 Non-Selected and reviewed by Accenture, plus a databank of over 200,000 Entrepreneurs on TEF Portal. We invite the CV’s with business interests in Africa, to leverage on our network, our ecosystem, and our knowledge of the African business market to actively reach entrepreneurs and in turn the African market.

Over the three years, the Foundation has invested in building the programme infrastructure including content, technology platforms, the screening and early-stage business validation of the applications by Accenture and internationally renowned selection committee. The  multilingual 12-week Startup Enterprise Toolkit (SET) provides core business skills and necessary training, supported by mentors, to guide the TEF Entrepreneurs on their entrepreneurial journeys. We have established the annual TEF Entrepreneurship Forum, the largest gathering of entrepreneurs from across the continent in Lagos, Nigeria. On completion of the programme, the graduating TEF Entrepreneurs join the largest network of pan-African entrepreneurs on the TEF Hub, where they can cross promote their businesses, receive ongoing support, and access to value add partners, including funders.

So Why invest in Africa?

Several studies have shown that investments in emerging and developing economies such as those in Africa provide higher returns than in advance economy where growth has stalled.

Many countries on the continent are prioritising infrastructure investments and improved business environment to encourage private sector growth. Countries like Ethiopia, Tanzania, Rwanda, and Cote D’Ivoire that have registered growth rates of about 6% upwards in 2016 owe their progress to reforms in these areas.

Due the economic vulnerability faced by resource dependent economies, many have become more aggressive in their economic diversification and industrialisation drive. This has opened the sectors available for investments.

Also, African nations are working hard to reduce barriers to trade and economic integration. Regional organisations such as COMESA (Common Market for East and Central Africa) and the EAC (East African Communities) are making progress in this regard. This increases the potential market available to anyone who invests in a single African country.

African Entrepreneurs are a Viable Investment Opportunity for Corporate Venture Capital

Through training, mentoring and seed capital investment, the Foundation is building an investible pipeline of entrepreneurs who are creating innovative and disruptive solutions to complex challenges. They are a viable investment opportunity for corporate venture capital across the sectors including:

Digital technology: Africa leads the world in mobile adoption which offers the biggest cross sectoral opportunities. Mobile technology is revolutionising healthcare and agriculture in Africa and as such provides a lot of opportunities for innovators in this space.

Agriculture: While agriculture has predominantly been the largest employer of agriculture on the continent, the nature of agriculture is fast changing. Young African entrepreneurs are moving from subsistence small scale agriculture to mechanised large scale farming using technology to leapfrog Africa onto the global agribusiness value chain. Opportunity exists to invest on all stages of Africa’s agriculture value chain from processing to packaging etc.

Africa’s youth: Africa’s working population is predicted to increase by about 70% in 2035, apart from the fact that this demographic will require jobs, they would also need skills needed to take advantage of opportunities. Opportunities thus exist in building the capacity of Africa’s teaming population through education and skills development.

Infrastructure: There are profitable opportunities for individuals and Companies interested in investing in infrastructure within and between countries. Given the infrastructural deficit on the continent, lucrative investment opportunities exist especially in telecommunications and IT- related infrastructure as well as in Public-Private Partnerships (PPP). Other opportunities include power, railroads, ports, and ICT

In just three years, through the TEF Entrepreneurship Programme, the African start-ups are creating jobs and generating revenues for the economic transformation of the continent. Africa is possibly the last major economically untapped region. We invite the corporate venturing companies who gathered at the GCV Symposium in London and the GCV Asia Congress: The Rise of Dragon & Tiger Tech, in Hong Kong, to join us as we transform Africa through entrepreneurship.

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