When Nigerian angel investor Tomi Davies backed his first firm — Strika Entertainment in 2001 — he acknowledges he wasn’t aware of his future role.
“I was just helping out friends. I didn’t know it was angel investing. I didn’t know there was a structure to it, ” he said.
Seven years later, Davies received a 20 x return on his first departure and a decade after that he’s recognized as an inventor of early-stage investing across Africa.
Davies is President of The African Business Angel Network and continues to fund and mentor young tech financiers in numerou countries.
On a summon with TechCrunch, he shared advice for startups on fundraising, existing COVID-1 9 and suggestions for world-wide investors on participating Africa.
VC in Africa
Davies’ ascendance in fundraising leads parallel to the boom in startup shaping and VC on the continent over the last decade.
When he began In 2001, there wasn’t much discernible speculation or digital entrepreneurial activity in Sub-Saharan Africa, outside South africans. In fact, there was limited data on VC investing on the continent until around five years ago.
An early Crunchbase facilitated study estimated VC to African startups annually originated from $40 million in 2012 to $500 million by 2015. A recent assessment by investment firm Partech tallied$ 2 billion going to the continent’s digital inventors in 2019, across top sells Nigeria, South Africa and Kenya.
There are now thousands of VC backed startup industrialists across the continent sinking on every imaginable use-case — from fintech to on demand electrical motorcycle mobility.
Increasingly, Davies’ different countries of Nigeria has become the continent’s informal fund for bet investment and startup shaping, imparted the open market thesis of having Africa’s largest economy and population of 200 million people.
Even with the boom in VC to the continent’s startups — which has outlined investors such as Goldman Sachs and Steve Case — for years committees at African tech consultations have reiterated the is necessary that more early-stage funding options.
Davies has worked to meet that. He came to investing at the friends and family level after receiving an MBA at the University of Miami and an earlier vocation that spanned personas in management consulting, telecoms and IT.
After emerging as one of the early angels to Africa’s startups, supporting the continent’s innovation ecosystem became a mission for the Nigerian investor.
” My raison d’etre became, and will remain until the working day I die, tech in African ,” Davies said on a bawl from Lagos.
How to slope
In his role as President of The African Angel Business Network, or ABAN, Davies has worked with a team to build out a local investor network across the continent.
” ABAN is very simply a network of networks…we have 49 networks in 33 African countries ,” he explained.
Those include Lagos Angel Network, which Davies co-founded, Cairo Angels and Angel Investor Ethiopia, announced in Addis Ababa in 2019.
ABAN builds specific guidelines and criteria for how representative structures control, but each chapter moves its own investment terms, according to Davies.
For example, ABAN affiliated Dakar Angel Network — founded in 2018 to support startups in French speaking Africa — volunteers seed investments of between $25,000 to $100,000 to early-stage ventures.
Where and how startups attempt stores from ABAN’s genealogy of structures depends on where they control.” One thing I say to everybody, from directors to business people to investors, is Africa is about metropolitans ,” Davies said.
” When you know which metropolitan your looking to invest in or strive investing in, automatically we’ll be in a position to say,’ here’s your network.'”
For the Lagos Angel Network in Nigeria, the team has a pitch night the third Thursday of each month with a 30 day regulate.” Before you leave, you’ll hear if we’re interested or not. If we’re interested, we’ve got 30 periods to stimulate you an give ,” clarified Davies.
Advice to startups
In addition to his work with ABAN, Davies continues to invest in his own portfolio of startups — now at 32 goes — and is a regular gues on Africa’s tech rivalry circuit.
He’s developed a framework to assess companies and shared parts of it with TechCrunch.
” What I say to any startup produce is the first thing any investor is listening to is how do I get my money back. That’s question number one,’ How do I get my exit ?, ‘” he said.
Davies stressed three things to satisfy that question:” The product service offering that you have, the customers who identify price in that product service offering and the nature of the relationship in terms of channel and rate furnish ,” he said.
” That’s what you’re always tinkering with after you start with some kind of value proposition .”
Davies referenced the increased relevance of referrals, having regard to the coronavirus has nullified a number of incidents and limited mobility to pitch in person in Africa’s top VC markets.
” Because of COVID-1 9, systems have become critically important. Because investors can’t touch, can’t feel, can’t see[ benefactors] beings are looking now for referential stability,’ Who direct me this deck ?, ‘” Davies said.
On how a coronavirus encouraged Nigerian receding may impact startups, Davies flagged the country’s non-stop informal commercial-grade act — and the adaptability of Nigerian industrialists — as causes that could carry crusades through.
” There’s a significant dollop of the economy that’s in the informal market. So even though they are you look back at the recessions we’ve had…it hasn’t been felt on the street ,” he said.
Davies is also collaborating with partners on creating working capital answers for startups whose receipts have been impacted by slowdown.
Tomi Davies is direct about his desire to draw new collaborators from tech middles such as Silicon Valley, into early-stage investing in Africa.
” We are always looking forward to co-investors and I speak on behalf of all 49 networks in ABAN ,” he said. Davies foreground the local expertise each structure brings to their market as a benefit to VCs looking to invest on the continent through an African Business Angel Network affiliate.
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