Lessons Learned

Today was my last day at HBD. In the end, I had a good experience in my internship, learning about investing in businesses in Africa and gaining an understanding of certain industries, which should be useful in my career in the future. I had a conversation with somebody from the World Bank yesterday and she asked me about how my experience had been and what I thought I had learned from working in South Africa. I hadn't thought about it much until just then, but this was my response.

Because a segment of the population in South Africa has high education levels, it makes sense to seek out entrepreneurs with ideas to create meaningful businesses. HBD is one of the few true venture capital firms in South Africa and probably the rest of Africa as well. However, most of the products and services that these entrepreneurs offer are not suited for markets in Africa. Instead, they usually look to the U.S. or European markets as places to eventually scale up in their business plans. This means that these products and services that the entrepreneurs are developing are not necessarily going to benefit the people living in Africa, but rather those living in developed markets.

Therefore, from my perspective and understanding, VC in Africa is really an outpost for talent and ideas to bring back to the developed markets. In otherwords, VC in Africa is just an extension of the bigger developed markets of the U.S. and Europe and not necessarily an integrated part of the African markets. This model seems to be useful for HBD VC, but wasn't necessarily what I expected when I came here.

I imagine the private equity markets might be a different story, since they invest in companies in more mature industries that may have a footing in African markets, such as retail and real estate. But my goal was to understand how entrepreneurship in high growth companies in Africa might spur growth in the rest of the economy, and I haven't seen too much evidence of that as of yet.