- The sprinkling of cash that has happened over the years by owners of capital in the new scramble for Africa versus the expectations levied on the portfolios funded, juxtaposed against the opportunity being addressed leaves much to be desired.
A recent article appearing in a leading global news publication that was syndicated quite extensively alluded to the fact that the deal space in Kenya had dried up without living up to the hope, or is it hype, that has been peddled to local and global audiences alike.
This has apparently led to a migration of investors to more mature markets in West Africa, where it is said the contenders for capital are worthy and hardened. A lot of feedback was registered, some level-headed and others emotional as well as defensive.
I shall not dwell on this much but air my own sentiments briefly before sharing where I believe some opportunities lie.
The sprinkling of cash that has happened over the years by owners of capital in the new scramble for Africa versus the expectations levied on the portfolios funded, juxtaposed against the opportunity being addressed leaves much to be desired.
Outside the issue of talent and the quality of ideas at the various portfolio companies, investments have been too small to give any meaningful traction that can power growth or pivot, should a different market or model become apparent.
There are opportunities that could in the long term register solid growth and sustainable returns for the gifted or perhaps lucky technology entrepreneurs who can marry the circumstance, talent and capital. The capital must be patient, though, and come with the full entourage of support services that may be required at the different stages.
In the agricultural sector there are a number of companies that have ventured into offering extension services and information either through web portals, mobile apps or SMSes.
While addressing a current and simplified need, the bigger opportunity lies in end-to-end adoption of technology starting from research in the labs, to value addition of the produced output, to market sourcing and finally fulfilment. Biotech and ‘Internet of Things’ could be differentiators.
In healthcare, with a national health ICT master plan in place, there is a real need for systems that will deliver the dream to the grassroots even as government dances with the multi-billion public private partnerships with the likes of General Electric and Philips. Whether it is insurance, drug logistics, smarter patient billing or analytics that improve health interventions, the issues here are real and have the potential for profit.
Business-to-business, there is an addressable enterprise market guesstimated to be more than $500 million (Sh45 billion) annually not accounting for an underserved SME market.
Although this is a sum total of hardware, software and services, it puts into perspective the opportunity for disruption or value addition that can find a ready market if well positioned.
Split down industry segments, specialisation and value addition on key processes that drive business is a no brainer, just that it takes time to shift ways of work that may have been ingrained over decades.
Without a doubt the ‘Africa Rising’ narrative holds true, but it is a long play that will reward those who diligently apply themselves to it.
Mr Njihia is CEO of Symbiotic. @mbuguanjihia