Image credit: Sabi

Q&A: VestedWorld’s Euler Bropleh on the opportunity of investing in ‘the basics’ in Africa

January 26, 2022

Euler Bropleh was born in war-torn Liberia and has long had a vision for reinvesting in Africa’s vulnerable communities. With his Chicago-based impact investment firm VestedWorld, Bropleh has raised two early-stage investment funds and supported more than 20 African startups addressing critical social and market needs in Ghana, Rwanda, Nigeria, Kenya, and Uganda.

VestedWorld is sector-agnostic, but more than a quarter of its portfolio is directly involved in the agriculture sector, which supports the livelihoods of more than 70% of Africans.

In Uganda, VestedWorld has backed Agrilis, a corn and soybean farm operator working with 15,000-plus smallholders that says it aims to “introduce, adapt, and transfer agricultural practices that increase yield potential, improve long-term soil health and strengthen producers’ climate-change resilience.”

In Nigeria, the firm supports agri-processor Tomato Jos, a woman-led venture that wants to shrink the tomato supply chain and help farmers process their crop into higher-value goods.

VestedWorld has also invested in Ghana-based True Moringa, which works with moringa growers to get their product into international export markets; Kenya’s Victoria Farms, which is introducing tech-enabled fish farms to boost local supply; and Rwanda-based Get It, which connects local businesses to a reliable supply of high-quality, locally grown foods.

Other VestedWorld portfolio companies, like Nigerian B2B e-commerce platform Sabi, are strengthening Africa’s agrifood value chain by supporting the informal retailers who sell upwards of 80% of Africa’s food and fast-moving consumer goods; Kenya-based Sendy, meanwhile, is streamlining Africa’s fragmented logistics networks.

Get It is redesigning the food distribution chain in Rwanda – all of it

 

With its first two funds fully deployed, VestedWorld is raising a third ‘Rising Stars’ fund which will invest in seed rounds.

AFN spoke with Bropleh (EB) about the fund’s strategy and the significance of venture capital in supporting Africa’s agrifood value chain.


AFN: Can you tell us a little about your investment thesis?

EB: Our thesis is centered around how countries develop over time. By and large, as countries are developing, they tend to take a similar path. Most start off very focused on agriculture—that’s where most people are engaged and employed. It is also how they make money. Agriculture is among the largest contributor to overall GDP in most developing countries.

But over time, as the agriculture sector becomes more productive and efficient, you need fewer people on farms. Farms grow, people start to transition into manufacturing jobs. Then as similar efficiencies are gained in manufacturing, the population’s education levels will rise, and then you will see people transition into services and knowledge-driven industries.

Most African countries have not gone through those cycles. There’s an argument to be made that development in Africa will look different, but I tend to think that a lot of countries will follow a similar path.

We try to invest in sectors where we feel like there has to be growth in order for countries’ economies to grow. We invest in agriculture, consumer products and services. We also invest in technology—what we call enabling technology, where we help leverage solutions to solve market-specific problems in the countries where we are investing.

From a geographic standpoint we focus on Kenya, Nigeria and Ghana and four secondary markets: Ethiopia, Rwanda, Tanzania, and Uganda. We invest in those countries because of our level of familiarity with them, the relative stability of those markets, the overall ecosystem, and the level of human capital required to build companies.

AFN: How does the technology piece of your thesis show up practically in your portfolio?

We have invested in close to 22 companies that range from companies like Tomato Jos, a company growing tomatoes and processing them into a paste for the Nigerian market, to DrugStoc, which is working with pharmacies, doctors, and hospitals to enable better access to high-quality. We have also made investments in companies like Kasha, which is distributing personal care products to women in East Africa, and Mobius Motors, a Kenyan company making cars for the African market.

We believe that tech is important because it allows you to leapfrog [older technologies and innovations], but it is not the be-all and end-all. There are companies doing things that are a little more basic but are important in their markets.

AFN: How are you confronting the compounding challenges of the pandemic, climate change and other destabilizing factors as you’re managing your portfolio and considering new investments, particularly in the agriculture sector?

Initially, we thought the pandemic was going to crush our portfolio and that a lot of companies would probably fail—those that didn’t would likely face significant constraints on growth. But for the most part, that has not been true. That’s partly because all the sectors we invest in were deemed “essential” very early on, so they were able to continue their operations in spite of Covid. Everyone needs to eat, and everyone needs a way to make money. So for those reasons, our portfolio companies weren’t impacted from an operational standpoint as much as we thought they would be.

Overall, I believe that the entrepreneurs in the countries where we invest are extremely resilient and able to figure out solutions, because they are used to operating in environments where there is a lot of uncertainty—where you have to be creative and resourceful. People are used to adjusting on the fly, figuring things out, and are not so easily discouraged when things don’t go their way.

On the agriculture side, with respect to climate change, it is a real issue. Most of the agricultural land on the African continent relies on rain for irrigation. People are adjusting to declining rainfall and [worsening] drought conditions, as well as an increase in pests that are impacting plants. They are trying to find water resources or using inputs that are more drought-tolerant, incorporating solutions that may protect their crops from pests, and making use of netting and greenhouses to protect those crops.

I think we will continue to see these sorts of adjustments and innovations across the sector, and agtech solutions really allow you to do that better. Whether its solutions that give you access to accurate weather updates, or an analysis of the soil in the area where you are planting that gives you some instructions on how to increase your yields, or advises you during the season to ensure that your plants continue to grow. Solutions that give you access to markets are also quite important. I think all these things are helping to move the sector forward.

AFN: What are you and VestedWorld excited about in terms of venture opportunity in Africa in the year (and years) ahead?

There is a lot of excitement in fintech, insure-tech and retail-tech, and those are all warranted. But going back to the underlying fundamentals in emerging countries, when you look at demographics and the information available, anywhere from 60% to 80% of the population continues to rely on agriculture, mostly at the subsistence level. Countries are also dealing with slow mobile penetration rate. You have to consider all of this when making investments, and you need to temper your expectations around these tech solutions and the level of adoption.

The focus for VestedWorld will continue to be enabling people to access to jobs, reducing the price of the basic things that people consume on a day-to-day basis, and giving people better access to goods, as well as providing better access to education and healthcare. That is what think is important to continue to transform African countries.

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