The bridge to Japan: How AAIC went from macadamias to medicine

A profile of Asia Africa Investment & Consulting, a healthcare-focused early-stage investor whose investments span all four corners of the continent and include Chipper Cash, Kobo360, & Helium Health

Afridigest provides ideas & analysis for startup founders, operators, and investors across Africa and beyond.
Thanks to your feedback via the survey, we’ll be featuring more insights from practitioners across Africa’s startup ecosystem going forward. Here’s an interview with an active investor that offers first-hand examples of investment strategies in action and opportunities & challenges across regions.

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Asia Africa Investment & Consulting (AAIC), a specialist Japanese firm, is among the international investors active in Africa’s startup ecosystem. The firm focuses on innovation in Africa’s healthcare sector and counts among its investments an ambulance dispatch platform, an insurance API provider, teleradiology & telemedicine platforms, dialysis centers & maternity hospitals, healthcare e-commerce marketplaces, a cross-border fintech, a healthcare booking platform, and tech-enabled logistics & mobility providers.

This author is fortunate to have interviewed Nobuhiko Ichiyama, the firm’s Director in Nigeria, about the investment environment across Africa, the drivers of Japanese interest in African startups, the impact of COVID-19 on the continent’s health-techs, and more. (Responses have been mildly edited for clarity.)


Hi Nobu. Thanks for taking the time to do this interview. First, can you tell us about AAIC and how things have evolved over the years?

AAIC Group (AAIC) aims to create new value by leveraging Japan’s competitive assets in fast-growing emerging markets. The group has two business arms, investment management and strategic consulting, and has been conducting business in Africa since 2010.

AAIC’s investment management arm currently manages the Africa Healthcare Fund (AHF), an investment vehicle focused on the African healthcare industry. Since the first close of the fund in 2017, AAIC has invested in over 25 innovative startup companies operating across 13 African countries, including many notable tech-enabled health-related startups via AHF.

AHF invests mainly in startups that are between Seed and Series A; we help our portfolio companies grow and expand by fully utilizing our international resources and network both across the continent and overseas.

AAIC’s other business arm, which focuses on strategic consulting, supports Japanese companies and government agencies with various business development activities in emerging markets, ranging from feasibility studies to market research and the development & implementation of market entry strategies.

For example, our strategic consulting arm provides start-up acceleration services in Uganda to JICA, the Japan International Cooperation Agency. With the knowledge and experience gained through our investment management arm, AAIC is able to offer high-value insights into the startup ecosystem in Uganda to inform JICA’s various innovation offerings for early-stage Ugandan startups.

Tell us about your first deal in Africa.

The first AAIC deal on the continent was actually an investment into the Rwanda Nut Company, a Kigali-based company producing and processing macadamia nuts on 300 hectares at the time. We now see more and more people becoming aware of this agribusiness opportunity that we saw a decade or so ago.

That’s so interesting. How have things changed from that first agribusiness investment to your most recent investment in Lami, the Kenyan API-driven insurance platform? How would you describe the investment environment in Africa today as compared to when you first started?

Well, for one, AAIC has long since focused on healthcare and not only via AHF. In fact, our very next investment was in Seven Seas Technologies Group, a Kenyan healthcare IT company, via Toyota Tsusho CSV Africa, a social venture fund that we managed before AHF. But to your second question: I see the startup ecosystem in Africa becoming more mature and materializing its potential.

The combination of tech and Africa used to be seen as wishful thinking or as primarily a social impact opportunity. But with the tremendous effort of entrepreneurs and their teams, a lot of commercially-driven opportunities are being realized nowadays that are really tailored to local markets and becoming essential in day-to-day life across local communities. As a result, more for-profit global investors are now taking tech in Africa more seriously. 

Going forward, there will be more competition, in a healthy way, for & between startups and investors across the continent, and this will help create sustainable value in Africa.

AAIC, via AHF, is a healthcare investor with companies like RelianceHMO, Helium Health, Rology, LifeBank, Shezlong, and others in its portfolio. But you’ve also invested in companies like Chipper Cash, Kobo360, Gozem, Sendy, and others that don’t seem to have particularly strong links to the healthcare space. Tell us about AAIC’s approach to healthcare investing on the continent and what’s attractive about Africa’s healthcare sector.

Under the current investment fund, Africa Healthcare Master Fund, yes, our main focus is healthcare. When we look at Africa, we see huge opportunities for startups in finance, logistics, and other sectors which can act as essential infrastructure to enable a better healthcare environment across Africa. That’s the reason why we invest in those fintech and mobility-related companies.

Please share an example from the AAIC portfolio that reflects the sectors and strategies you find most attractive across Africa, touching on market segments, demographics, digitization, and other drivers of growth.

This is actually one of the most important criteria we look at when we make investment decisions, and I’ll say that all of our portfolio companies reflect the uniqueness of Africa or each country’s market. 

One example is Rology, an on-demand teleradiology platform operating in Egypt and other African and Middle Eastern countries. They leverage the access to radiologists in Egypt, a unique competitive edge of the country, and are addressing the shortage of radiologists across other regions in Africa and the Middle East through their technology platform.

Another example is RelianceHMO, a fully online-based medical insurance provider in West Africa. They provide affordable health insurance powered by a combination of technologies: a digital onboarding system, telemedicine, and an AI-based claim system in Nigeria, where only 5% of the population have access to insurance.

The global pandemic is changing consumer dynamics and behavior across the world. How has the pandemic impacted your portfolio companies?

We saw some of our portfolio companies struggle due to lockdowns, but this was generally short-lived. Overall, however, we see this pandemic as an opportunity to shed light on the huge potential of digitized healthcare in Africa. And I now see more investors pay attention to health-tech companies.

I’m also really impressed with various initiatives by our portfolio companies to quickly respond to the new demand in the sector due to COVID-19, for example:

What they did isn’t just add new service lines — they are creating new value for their communities that will persist after the pandemic. I believe these initiatives & others by startups in the health sector helped international organizations and various governments realize that they should work more closely with health-tech startups to respond more effectively to a rapidly changing environment and to multiply the impact. 

AAIC invests across the entire continent: East Africa, West Africa, Central Africa, and Northern & Southern Africa. What are some similarities and differences between markets? 

Overall, I see that Nigeria, Kenya, Egypt, and South Africa are taking the lead in their respective regions. But here are some general thoughts:

  • West Africa: Nigeria is giant and dynamic. We see a lot of mega-deals, especially in the fintech sector. Big-visioned and aggressive (in a good way) entrepreneurs attract global investors. The competition (both for startups and investors) is getting intense.

  • East Africa: Thanks to EAC, the regional intergovernmental organization, a lot of startups are starting businesses in Kenya and expanding to other EAC countries.

  • North Africa: The population demographic is a bit different from other African countries; in particular, there are larger ratios of middle-income class people. With this unique market opportunity, there are a lot of B2C types of startups coming out and the local startups are eager to expand to both the Middle East and to other African countries.

  • Southern Africa: South Africa is pretty well connected to Western markets like Europe as well as to other African countries. We see similarities in Israel and Estonia in this regard.

Alongside AAIC, other Japanese investors like Kepple, Uncovered Fund, and Samurai Incubate have targeted African startups over the last several years. What’s your view on what’s driving this phenomenon? And how does AAIC set itself apart?

It’s clear that more Japanese companies and investors are seeing the huge potential in the African market; it’s hard to ignore.

Looking at forecasts of the Japanese economy, the population is expected to decline in the coming years and various actors across the country see the opportunity to create economic value by collaborating with emerging markets.

I’m based in Nigeria, where the country is about to hit USD $3,000 GDP per capita. Looking back in history, it’s similar to Japan in the 1970s when all the consumer markets boomed. With this in mind it seems, more and more Japanese companies are coming to us to ask how they can expand their business into Nigeria.

In terms of how we set ourselves apart at AAIC, compared with other Japanese VCs focusing on Africa, we’re different in 3 aspects:

  1. We’re backed by Japanese financial institutions and healthcare-related corporates (pharmaceutical companies, medical device manufacturers, and others). 

  2. The range of our ticket sizes is broader. We participate from Seed to Series A, which is a bit later stage than some others. Also, we don’t only invest in startups, but we also do PE type of investments in hospitals, FMCG companies, etc.

  3. Finally, healthcare is our main focus. Long before the pandemic, we’ve held strong convictions towards Africa’s healthcare sector and we’ve been gaining unique expertise in the industry for years now so we’re able to add unique value to young companies in that space.

Of course, we need to maximize our financial return as an investment fund and one way we do so is by maximizing the synergies both internally (among our portfolio of health-tech companies and our portfolio of infrastructural players in healthcare, fintech, mobility, etc.) and externally (between all our portfolio companies and the Japanese companies that are part of our LP base). In that sense, we are increasingly differentiating ourselves as the major bridge between Africa and Japan.

Speaking of Africa and Japan, at the end of last year, AAIC announced a partnership with Rakuten Group. Can you tell us more about the AAIC-Rakuten Africa Innovation Project?

Under the AAIC-Rakuten Africa Innovation Project, we provide management teams of startups in our investment portfolio with unique mentorship that includes expertise and knowledge from Rakuten, one of the global tech giants, which is headquartered in Japan. This is also one of our bridging activities mentioned previously. Currently, we’re working on the first batch and we’re planning to do the second batch soon.

What are you most excited about in the coming years as it relates to Africa’s startup ecosystem?

Following the current fintech boom, there’ll be more mega-deals in the African health-tech sector. And while that’s definitely exciting for us with our healthcare focus, in order to be ready for this, we also need to scale up our fund to be best-positioned for the opportunities that will present themselves.

Also, geographically, we’ll see the rise of other regions outside of the top four countries (Nigeria, Kenya, Egypt, and South Africa). For example, Gozem, one of our portfolio companies, is creating a super app that targets users in Francophone West and Central Africa. The blossoming of Francophone Africa and other regions/countries that are a bit under the radar today is another exciting development we’ll be watching closely in years to come.

Great — thanks again for your time, Nobu!

👉 Follow AAIC on Twitter and visit AAICinvestment.com to learn more.



Thanks for reading.

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