‘There is more funding available now for African startups’ – Aaron Fu, MD Of MEST

Aaron Fu, MD Of MEST
Aaron Fu, MD Of MEST
Aaron Fu, MD Of MEST
Aaron Fu, MD Of MEST

Now in its 10th year investing in tech entrepreneurs in Africa, Meltwater Entrepreneurial School Technology (MEST) held their third MEST Africa Summit, which took place in Cape Town, South Africa, June 18-20.

Formerly the Africa Tech Summit, this year’s event went Pan-African, bringing together top entrepreneurs, investors and executives from Africa, Silicon Valley and Europe, to network and discuss trends, challenges and opportunities affecting markets across the continent, under the theme The Year of the African Scaleup?

IT News Africa had a chance to speak to Managing Director of MEST, Aaron Fu who unpacked the summit and gave insights on entrepreneurship in Africa.

Could you briefly unpack the reason behind the Africa MEST Summit?

The MEST Africa Summit is intended to bring together major players in the first truly Pan-African tech conference. It also served as a celebration of MEST Africa’s 10 years on the continent, highlighting our portfolio companies, as well as the partners we’ve collaborated with over the years.

However, more importantly, the Summit was developed to dive deep into at how African startups are actually scaling, what the challenges are and how, as a community [by which I mean entrepreneurs, investors and corporate companies operating on the continent], we can collaborate to find practical solutions that foster the best business environment for tech companies to grow.

We wanted to bring together the best entrepreneurs, investors and corporate partners from across the continent for a truly Pan-African discussion. How can we best support startups as they begin to scale? Does the current VC model in Africa need to change? How can we work with governments to make doing business easier? How can we build our talent pool, here on the continent, to ensure we can build homegrown technical teams? What sort of mentorship do our entrepreneurs require, as they grow their business? Together, via platforms such as the MEST Africa Summit, we are focussed on addressing these questions and developing implementable strategies.

What MEST strategy to break into the African Market?

We are looking to build businesses that are truly Pan-African in nature, so it only makes sense that MEST itself must be Pan-African, growing alongside our startups as they look to scale into new markets. We began in Ghana in 2008 and started accepting Nigerian Entrepreneurs-in-Training (EITs) in 2015. From there, we entered Kenya, South Africa, and now Cote d’Ivoire. We have physical incubators in Accra, Lagos and Cape Town and are excited to announce Nairobi will be launching this year.

We evaluate potential new markets according to 1) which geographies make most sense for our existing portfolio companies to enter next, 2) where we see an abundance of tech talent that we can recruit for the training program and 3) where there are stable and supportive governments, corporate partners and support structures that can enable tech companies to grow and thrive.

What contributions can MEST make to the African landscape?

To-date, MEST has had four exits (digital insurance claims company Claimsync, e-commerce marketing tools RetailTower and AdGeek and messaging app Saya).

More than 50 companies have been funded, with nearly 300 entrepreneurs trained. 400+ highly skilled jobs have been created through their incubator companies with MEST itself seeing 100+ highly skilled job created. The last 12 months in particular has seen us expand across the continent, launching hubs in Lagos, Cape Town and soon, Nairobi, which means we are growing our footprint, growing job creation and supporting talent local to these areas. We’ve invested over $20M from Meltwater into MEST, and have also secured an additional $2M investment from external investors.

As well, our portfolio companies are working to identify and solve real problems facing the continent and within their local environments – from regulating and analyzing data around radio air time, to helping farmers to afford necessary machinery and keep track of their livestock, to giving church leaders the tools with which to engage and financially include all of their members, to solving real problems all along the construction and property supply chain.

MEST has been working with and investing in entrepreneurs in Africa, specifically Ghana for a number of years, tell us a little more about what the program does?

MEST is a Pan-African entrepreneurial training program, seed fund, incubator and tech hub. We recruit individual aspiring entrepreneurs – pre-idea, pre-team – and bring them to Ghana for an intensive, 1-year training program in business, tech and communications taught by experienced global fellows and senior faculty. During that year they form teams, develop products, validate their ideas, gain traction and pitch their solutions 3-4 times until they land on the right team, product and market. They then pitch to our board and global investors.
Those that successfully convince the board will receive $50k-$250k in seed funding and a space in one of our Pan-African incubators, as well as public and private offices, access to MEST-sponsored talks and events, on the ground business and technical support and access to the global MEST network.

Through this, MEST provides a positive environment for our companies to concentrate on the process of building a business. Our EITs also have the added bonus that the MEST network is deep in Africa, Silicon Valley, Europe and Asia, providing them with a genuinely global reach.

For me, an important part of what we provide is mentorship; giving our EITs access to mentors, leaders in their field, who have been through what they’re going through, sharing their experiences and exposing their business battle wounds. Hearing how others have navigated business challenges, and learning from their failures and successes, is an integral part of the curriculum and their experience in the incubator.

You’ve worked in the VC and entrepreneurial space in Africa for some time – give us a little more background about your time working on the continent and also, how the market has changed?

My own journey I feel is very much representative of how I feel the funding landscape is evolving. I initially started with Asia-based VC Nest on the investment thesis that we would invest in African startups that could scale into Asia with our support.

I’m proud to say that we did bring the 1st African tech startups to our Hong Kong and Singapore based programs however at that point the market of startups ready to compete in Asia was not deep enough. Turning my attention with MEST now towards achieving scale by internationalisation within Africa before internationalising out of it I feel is the kind of rationalisation that has driven a few streams of change in Africa’s startup funding landscape.

There is more funding available now for African startups than ever before and that rate of growth is not slowing down, however investors are now more aware of both the potential challenging but possible means of getting returns back into their funds with liquidity events like the one Kenyan startup Africa’s Talking had putting cash back into founders and investors hands.

I am also very excited at the recent burst of family offices in Africa, led by their next generation, taking increasing interest with investing into early stage technology deals, deal volumes are not significant yet but it is very encouraging to see them testing the waters and learning very rapidly from their experiences.

What are your hopes for the Tech entrepreneurial landscape in Africa over the next few years?

Scale. Without scale, we won’t really be able to build in a way that we want to, as a tech community, which is why we chose this as the theme of this year’s Summit. I think we are all eagerly anticipating a tech IPO this year, as well as the announcement of an African “Unicorn”, or possibly some more gazelles. Events such as these act as a catalyst for the wider tech ecosystem, as it attracts more interest [both financial and talent] into the sector.

However, we need more of the startups that we’ve seen coming through, in the same vein as the Andela’s, the IROKO’s, the Yoco’s, of Africa, to scale at a rate that continues to excite VCs and investors globally. These types of companies reflect the vast opportunities that African tech has to offer.

As well, it’s great to see so many incredible corporate partners – from Facebook and MTN, to Dalberg and Merck – also expressing deep interest in working closely with startups to help them reach that point of scale and taking action with innovative programs to help make this happen.

By Neo Sesinye
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