Supporting innovative African tech enabled SME's to favourably impact investors and local economies
At HAVAÍC, we invest in local early stage high growth technology enabled businesses that have the potential to scale internationally. In the context of the social and economic realities that we are all witnessing as a result of the Covid-19 pandemic, it is our belief that technology led cloud-based businesses, solving real world problems with the ability to scale and adapt quickly, are best placed to weather this storm, and to even thrive therefrom.
With this in mind, and in conforming with this new low touch and socially distant world that is our reality, like many of you, I have been privileged to attend a myriad of webinars run by top African business executives where they talk about the state of the South African and African economies and discuss how they will recover given the current negative effects on growth and GDP. I have found these forums incredibly useful as it has allowed me to stay in touch with and learn from industry experts and business leaders whose worldly experience brings wisdom, perspective and humanity into the mix.
An observation from these webinars is that two themes continue to emerge. Firstly, the important role of technology in the post Covid-19 world and how this crisis has acted as a catalyst for technology adoption. And secondly, the economic necessity to support SME's in this time as well as post this crisis. However it does feel that whilst these high level themes seem to be universally accepted, very few seem to have practical insights into the world of African tech and innovation, and in particular how this is woven into the many SME’s that largely go unnoticed.
Within a rapidly evolving and growing technology-enabled world, the difficulty is that you simply don’t know what you don’t know. At HAVAÍC, we continue to work with, support and interact with many technology driven local SME’s and entrepreneurs who are serving local and international clients and operating in global markets, yet little is known about them locally. And if you don’t know about them, then through no fault of your own, you are unable to utilise their solutions, to support them, and importantly learn how they in turn could provide important services that can help you, your businesses and serve the greater local economy.
At HAVAÍC, we are fortunate that the nature of our activities affords us the opportunity to see this local innovation in action. We invest in and work with early stage technology businesses, i.e tech enabled SME’s. Many of which are thus far fairing comparatively well in this crisis. In fact many are even thriving, hiring staff, releasing new products and attracting new clients. Not only through our portfolio, but through our daily engagements, we see a myriad of great examples of relevant African tech businesses commercialising their solutions the world over. Our thesis is to invest in businesses that solve real world problems, and in particular our healthtech, safetech and digital business solutions, all of which run off the cloud and are supported by a virtual scaleable workforce, are proving to be very resilient in these challenging times.
From an investor’s perspective, global volatility and uncertainty has resulted in significant repricing across assets. To sophisticated investors this offers significant investment optionality and opportunities, and for the Venture Capital sector it means that the higher returns, albeit off a riskier base, that they once offered investors, on a stand-alone basis, may simply no longer be good enough. However when one starts thinking through the current cycle of volatility and considers that what was once a great business may no longer be so due to changes in social behaviour and new economic norms, the historically safe bet may now in fact be the riskier bet. And what was once perceived as riskier, but is tech enabled, is a cloud based scalable business with low overheads, a highly functional virtual office, global reach and experienced tech savvy management team, may in fact be the new safer bet.
A third theme that has emerged from the webinars alluded to above is an increased awareness around community connectivity, and with this in mind, when making investment decisions we now more so than ever need to carefully consider how this affects the rest of our economy and society at large. It has become increasingly apparent that it is no longer enough to simply invest in companies like Netflix or Amazon under the premise that they are a Covid-19 proof safe bet, while offering little benefit to our local economy. This is an opportunity lost to invest in the economy that houses and supports you and your loved ones. Smart investment decisions now need to include an awareness of this connected community and an understanding of how investment decisions can impact both investors personally as well as the economy that they participate in.
It is clear that unlocking technology and the SME sector is key to securing our nation’s and our African neighbours’ economic future. Be it the provision of cashless payment solutions for the unbanked, access to a private security force of over 2500 security personnel with the ability to respond to crime within 3.5 minutes all at the push of a technology driven button, the provision of remote programmable hearing aids that never require the aged and hearing impaired to visit an audiologist’s practice, or a marketing and communication platform that delivers data rich microsites in a way that the world has never seen before. We have it all here in Africa and Venture Capital, when applied smartly, when applied to technology and when applied locally, can have a positive impact on both investors’ returns and their greater community, as well as to their economy.
At HAVAÍC we provide just that – access to investments into technology enabled local businesses that are well placed to survive and thrive during and post the Covid-19 crisis, all while uplifting the local economy and delivering returns to investors.