VC4Africa is actively expanding its network of investors. Today we meet Lot Carlier from the Africa Media Ventures Fund (AMVF), an organisation that mobilizes capital and experience in the Netherlands to invest in entrepreneurs across the media sector in different African countries.
You visited Nairobi recently on an investment trip. What were your main observations about the entrepreneurs you spoke to?
“I came to Nairobi with one of our investors, Bert Wiggers, who is a very experienced internet entrepreneur active in the Netherlands, Eastern Europe, Russia and the US. Our main observations were that there are many very enthusiastic and skilled entrepreneurs with interesting business ideas to be found in Nairobi. But the quality of the business plans varies strongly.
Often the business plans that are presented to us are not based on practical experience and are too theoretical. In those cases, and if the idea is strong enough and within the focus of our fund, our first step is to support the entrepreneur to make a solid business plan.”
Can you explain to us what the Africa Media Ventures Fund is focusing on?
“As the name of our fund clearly describes, we want to invest in media ventures. Given the nature of communication developments in Africa the emphasis is on mobile and online, although we would not run away from a print opportunity provided it would be part of a multi-media concept. We strive to invest in companies in the seed-stage and the early phase, investing not only capital but also knowledge and time if needed and desired by the entrepreneur.
We offer a combination of venture capital and business development support, involving knowledge, experience, access to proven business concepts/applications and network. Our capital investment range from €15,000 to €100,000. We focus on sub-Saharan Africa (except South Africa) and we focus initially on Kenya, Uganda and Ghana.”
When and why did the fund start and who is behind it?
“AMVF was founded in 2010 by Pim de Wit and myself, both of us have a lot of experience in on and offline publishing. We were already involved in not-for-profit initiatives in Africa, and saw a lot of opportunities in going ‘commercial’. We brought together a group of informal investors who as well have a long track record in media. This is what makes the fund rather special; its investors are quite keen to transfer their expertise to the young African entrepreneurs.”
What investments have you made so far? And have they been successful?
“From the beginning we decided to do four to five investments to see whether our approach, combining the investment of capital and knowledge, would work. Since then, we have invested in a web developer in Ghana and four companies in Kenya, being mobile application developer Shimba (behind Tuvitu & MedAfrica), payment processing company Paygate, a yet to be launched mobile website, and Kenya’s premier online restaurant guide and booking service EatOut. Three of these are real start-ups and it is too early to tell whether they will be successful. For the moment they are on track. The other two are young, but already established companies looking for additional investment and both are doing quite well.”
How many business plans do you receive per month and how do you select them?
“On average we receive around 4 business plans per week. They reach us through our website, but also through our Kenyan network consisting of our investees, befriended investment funds with whom we also co-invest, the iHub and intermediaries like OpenCapital. If a plan meets the criteria that are published on our website, and the managing partners of our fund are enthusiastic, we ask a second opinion from one of our fifteen experienced investors. Depending on their feedback we take a decision.”
What are the do’s and don’t for entrepreneurs who contact you?
“As mentioned before we do receive many plans and therefore it is important that a plan is well written and includes a realistic financial forecast. Unfortunately, we receive financial forecasts that are highly exaggerated and in that case we doubt the financial acumen of the entrepreneur. Another very important factor is the quality of communication. Once we have entered into a venture we insist on excellent communication if we are to be able to support the entrepreneur efficiently. If the communication skills of the entrepreneur seem limited, it will obviously not work in his or her advantage.”
What are the future plans of AMVF?
“We just expanded the current fund and now have 19 very knowledgeable investors on board. We will continue operations the way we have done up untill now, focusing on East Africa.”