Here’s a short clip from Tuesday’s Building in Africa session where a panel of founders who’ve raised a cumulative $40M+ answered that question — Is 'sustainable growth' enough for VC-backed startups in Africa? — and others.
Moulaye Tabouré, Founder & CEO of Ivorian e-commerce SaaS platform ANKA, described the ‘T2D3’ growth model venture-backed founders should keep in mind, then delivered some hard truths:
“I think we think all growth is good. And because we've been in such a complicated environment, we tend to [promote] ‘sustainable growth.’ But if you [achieve] that — especially when you have outside investors — they cannot make a return and neither can you as a founder.”
Fara Ashiru, Founder & CEO of Nigerian open finance & cloud infrastructure platform Okra, reinforced this reality:
“We are founders that have raised capital... As you're building your company you have to [ask], ‘Am I actually doing this not just in a sustainable way, but also in a way that can get ROI for investors?’”
This Building in Africa session was unusually candid and cut through a lot of noise:
When you raise VC cash, in Africa or elsewhere, you’re committing to return significant multiples of the investment you receive.
‘Sustainable growth’ might mean different things to different people — but when it comes to building venture-scale businesses, what matters is growth that can deliver outsized returns in the very near future.
An investor’s perspective
This reminds me of a comment from EchoVC’s Eghosa Omoigui almost exactly two years ago:
“All VCs invest in is either very big TAMs or growth, they don’t invest in
profitabilitysustainability and they never really have.”
Some questions
How should founders in Africa think about ‘sustainable growth’? How do you think about it?
In today’s new normal, is ‘sustainable growth’ the right message for VC-backed startups on the continent?
Is breakneck growth widely achievable in African markets (given infrastructure gaps, etc)? If not, what category of companies is it achievable for? And do founders trying to raise VC know what they’re signing up for?
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