Opportunity

Consumer-Led Growth Play

Together, a number of factors are unlocking a consumer-led growth play in sub-Saharan Africa today:

  • Sustained economic growth, with six of the ten fastest growing economies in the world
  • Rapid urbanization, enabling easier access to consumers sharing common aspirations
  • Improving governance, with 17 democracies on the continent today, up from 3 in 1988
  • Emerging enabling platforms such as mobile technologies and low-cost transaction platforms
  • Returning diaspora with the skills, networks and ambition to grow breakthrough businesses

  • Venture Capital Fueling Breakthrough Consumer Businesses

    The largest segment of consumers in Africa are at the base-of-the-pyramid (BoP). They spend their growing, hard-earned income on basic goods and services like housing, education, energy, information, healthcare, and transportation.

    Enterprises with innovative business models and adapted technologies can profitably satisfy market demand at the base of the pyramid. When they do, they grow very large, quickly. In so doing, they widen access to basic goods and services, improve quality and reduce cost, thereby generating large scale benefits for BoP consumers.

    New, innovative business models require rapid iteration in the early days, and the discipline and courage to make changes based on market feedback. That’s why venture capital and the experienced support that comes with it are fundamental to entrepreneurial success. While Africa is attracting an increasing flow of private equity funds providing growth capital to established businesses, few investors are focused on venture stage opportunities with consumer-facing businesses.

    That’s where we see the opportunity to do well and good at the same time.