You have completed one year as Villgro Africa’s CEO. How do you feel?
The year has gone by quite fast. I have settled into the new role quite well, thanks to having both Rob and Robert as my co-founders. Having a co-founding team makes life much easier compared to being a solo founder. We are very well aligned as a leadership and have built a world class team over the last few years. This is bound to improve with more female team members joining the leadership and gives me a lot of confidence. Overall, we have done quite well as an organization. Despite COVID-19, our portfolio companies' performances have improved, with their revenues increasing by almost 30% and the funding they raised grew tremendously.
Our annual budget more than doubled within a year and we have sight of incubators we want to partner with in the Pan-African expansion plan. We have definitely overachieved in some areas so, overall, I feel good about where we are.
In your acceptance letter, you boldly declared that Villgro Africa would be at the forefront of driving the SDGs in Africa. What progress have you made towards this?
Achieving sustainable impact will require a village mentality. At the beginning of my term, Villgro Africa joined Afrilabs, a pan-African network of incubators. We also joined the Association of Startup Enablers in Kenya (ASSEK) and my co-founder Robert was elected as their chair. We are also in other member networks like the ANDE network, CHRead and Early Stage Capital Providers (ESCP). Collaborating with other actors allows you to share lessons, best practices and pipeline. Similar to a biological ecosystem where an organism can’t thrive on its own, we have learnt to rely on other ecosystem actors to work towards achieving the SGDs.
We have started testing the waters through the AI4D call, which was a Pan-African call for solutions based on artificial intelligence that attracted over 250 applications from over 20 countries across the continent. This is a testament that collaboration with other incubators in Africa is needed. We are also looking at expanding our board to make it more Pan-African. It's more than just plugging in; we want to be more involved in the local ecosystems throughout the continent. Through our partnership with Villgro Global we have identified and started training 10 incubators within the continent using our playbook.
We had envisioned that if we could train around 10 incubators, then we might be able to build solid partnerships with some of them after training and do a joint Pan-African call for innovations. Our ethos is that when we come together, the entrepreneur wins. We are also very keen to learn from these partner incubators because they are on the ground and more anchored. It's two-way traffic. As we partner with them, we will grow. Even our sector scope will broaden because most of them are sector agnostic.
Our current operations across East Africa are also diversifying. From the recently concluded ICIPE/BioInnovate program we selected three companies in Ethiopia for $20,000 each in grant funding. We also shortlisted 10 AI companies from 10 countries in Africa for a grant award of between $5,000 to $10,000 each. As we move further beyond East Africa, we will need local incubator partners in the new countries. AI allows the continent to leapfrog towards attaining the SGDs. It's a sector that we can't ignore. That's why we have brought in Dr. Deogratias Mzurikwao to lead the AI vertical. Dr. Deo holds Ph.D. from the University of Kent on the Application of Artificial Intelligence in healthcare, under the commonwealth scholarship.
You mentioned the growth of portfolio companies. What are the lessons learnt from the growth in numbers?
We should be adaptive and willing to change operations. Pandemics and catastrophes give one an opportunity to evolve. Startups that evolved were able to increase their revenues. Some pivoted and came up with new products, like Flare. Others had to scale down their operations costs.
Listening to the customer's needs is essential. It reached a point where patients wanted to be treated at home, so those that listened to their customers found an opportunity to start healthcare delivery services. Neopenda found an opportunity to redesign their neonatal remote monitoring wearable bands to adult bands to help monitor COVID-19 in order to reduce the risk of infections within facilities.
When COVID-19 came, it was an opportunity for us to step up and remain relevant even during this period. That is how we ended up with the call for COVID-19 innovations. For companies that rely on day-to-day sales, it made sense for them to scale down on their operation costs to extend their runway. But for us in healthcare, it was mostly a call to step on the pedal and increase our support. The pandemic cut both ways. While others were scaling down, others were scaling up.
It was also an opportunity for us to partner with other organizations so that if the clients one company was serving needed a different service, they would be able to partner with another organization that fills that need. For example, brick and mortar clinics serving walk-in clients who may desire at-home healthcare diagnosis saw an opportunity to partner with telemedicine companies that already had the platform set up.
Gender-wise, what measures have you and the leadership team put in place to help reduce the gap between female-led and male-led startups in the region?
For us to have gender balance, we need to look at where decisions are being made, as highlighted in the GALI report, which found out that entrepreneurship support organizations (ESOs) were widening the gender funding gap. To make our decision process favorable to women-led startups, we began by increasing women in our board. We have brought in Dr. Beatrice Murage and Ms. Ndeye Thiaw. We have also made some changes at the senior management level. We brought two fantastic ladies, Eng. Wambui Nyabero as the Chief Technology Officer and Franciscah Nzanga as Director of Operations.
The next level of change will be focusing on how to better target female-led enterprises. Naturally, men tend to be more aggressive and are more likely to apply for business plan competitions compared to their female counterparts. Our calls for applications attract male founded companies 80% of the time. We have to be very intentional in scouting more female led enterprises, especially in healthcare, if we want to reach more end beneficiaries. This can be underpinned by the fact that women have a better health seeking behaviour compared to men. They are likely to show up at a facility for a check up compared to men. This is more so for women with children. Therefore, a female startup founder understands the healthcare needs of other women much better.
What do you feel is the biggest strength of Villgro Africa right now?
Our biggest asset right now is the team. We have built a very talented team with multidisciplinary skill sets ranging from engineers to business analysts, healthcare researchers to AI experts, among others.
Our proven track record speaks for itself. We have a robust process of doing things. Very few incubators offer the kind of high-level support we give to our incubatees. We can use the term precision incubation to describe the process. Each founder gets specialized, customized support depending on their stage of enterprise development, their prior entrepreneurial experience, the type of innovation, etc. That's how we are able to get 17 times the leverage on every dollar invested in our companies.
Paint a picture of where you see Villgro Africa and the startup ecosystem in the next one year.
In the next year, we see ourselves doing joint incubation programs in more than two regions, including SADC and West Africa. We have already seen Nigerian companies entering East Africa very successfully, and we want to help our companies scale across regions as a result of our expansion. For example, Ilara Health is keen to scale into Ethiopia and the SADC region. Even for companies that have graduated from our portfolio, like Turaco and others, we will be happy to help them scale in West Africa through partner incubators. I see a lot of intra-continental expansion happening as a result of the Africa Continental Free Trade Area (AfCTA) agreement that was signed recently, so it is the right time for us to scale.
We also want to scale our reach and impact. As one incubator, we have unlocked close to $20 million of follow-on funding for startups in the last 5 years. If you multiply that by 5 incubators, then we end up unlocking $100 million for African startups in the next 3-5 years through these partnerships. In terms of direct impact, we have been able to touch 2 million lives in East Africa in the last 5 years. If we work with 5 other incubators, we can increase that to 10 million lives. We will see a lot of leverage in terms of funding raised, impact, and expansion. Our incubatees should follow suit and we will be happy to help portfolio companies working with other incubators expand to new regions.
Since we don't want to be both the goalkeeper and the referee, we are looking at external independent M&E partners who will ensure that the data we are reporting is verifiable. We do not want to just check SDG boxes but ensure that we remain very objective with our impact numbers.
As we move forward, we want to continue building on where we have come from and what we have learned along the way, while also being open to new and unexpected opportunities. We will stay committed to our vision of supporting innovators and continue to use every tool available to expand our impact and extend our reach. We remain open to partnering with organizations that want to be part of this common agenda of transforming lives throughout the continent.