“I have an obligation to use my access to empower the next generation of African innovators.”
-Maya Horgan Famodu, Nigeria-based Venture Capitalist.
By Ed Zimmerman & Betsy Zimmerman (with Maya Horgan Famodu): FORBES.COM
In launching Ingressive Capital and doubling assets under management (AUM) from $5 Million to $10 Million, Maya Horgan Famodu has set a number of records. She is believed to be the youngest Black woman to launch a tech fund, and the youngest person to launch a tech fund in Sub-Saharan Africa. She is the first solo woman to have raised a tech fund in Nigeria. In fact, Maya’s $10 million venture fund, Ingressive Capital, may well be the largest first-time tech fund raised by a solo Black woman GP in all of venture.
This interview and background about Maya and her firm is timely for numerous reasons, not the least of which is her recent fundraise to invest in Nigeria, Kenya, Ghana and Egypt.
We met Maya in early 2019 and soon afterwards invested in Ingressive. We were not, at the time, looking to add a Nigerian fund to our portfolio, but Maya is a force of nature.
Half-Nigerian and half-Minnesotan, Maya grew up in Minnesota, completed undergrad at Pomona College, went on to Cornell University’s Prelaw Program, and briefly worked in finance at JPMorgan in New York.
In 2014, she moved to Lagos and attempted to launch her first fund, but with barely a year of work experience, investors swiftly declined. She forged a path into deal-making by first launching Ingressive Advisory, providing “market entry services and tech research for corporates and investors.” (Source: Forbes). Since its founding, Ingressive Advisory has recruited top global investors and tech companies to expand into or invest in Nigeria, further developing the country’s entrepreneurial ecosystem.
Ingressive Advisory eventually expanded its services to providing one- to two-year subscriptions for outsourced services in Africa for its billion-dollar+ tech company clients. Nigeria became one of its clients’ highest-growth markets.
“We started leading global investors to Africa before tech was a thing here,” Maya explains, “back when questions were less ‘how many M&A deals have occurred in the African market this year?’ and more ‘do Africans even have internet and electricity?’ It was necessary to not only change the Africa narrative to focus on its incredible innovations and opportunities, but also sell a future few imagined.”
Maya later co-founded (with her Ingressive colleague, Sean Burrowes) Ingressive for Good, a nonprofit providing scholarships, technical training and talent placement for African youth.
It is clear though, that the heart of Maya’s professional life is Ingressive Capital, the venture firm, which she launched in 2017, to invest directly in tech startups across Africa.
“We are building a pipeline from the time a student thinks ‘I want to be in tech’ all the way to the time they IPO. Ingressive’s family of businesses grow and sustain the African ecosystem from the beginning ‘til the end of a techie’s journey,” Maya explains.
Ingressive provides a great example of the valuable synergy in which an early market participant materially helps with community building efforts, which both develops the market and entrenches their position within it.
Several of Ingressive Advisory’s clients—venture firms and their execs—invested in Maya’s fund. In fact, approximately 80% of those who invested into Ingressive Capital’s venture fund are people who run the world’s leading venture capital and private equity funds, or the firms themselves, which Maya says “gives African portfolio companies access to global funding and business development.”
It is noteworthy that the doubling of her fund’s AUM adds a high-profile fund-of-funds (Plexo Capital) and also indicates that Nigeria is formally investing in its own startup ecosystem, as “new investors include the Nigeria Sovereign Investment Authority” (Source: Quartz). Building a roster of institutional investors is the way venture capital firms themselves become enduring institutions.
Lo Toney, Founder of Plexo Capital, says: “Plexo Capital invested as an LP into Ingressive Capital because of our belief in the African startup ecosystem and the ability of Maya and the Ingressive Capital team to source the best deals and work with those entrepreneurs to deliver superior returns.”
Still under 30, Maya has established a robust global network, raised money from some of the biggest names in venture capital and sovereign wealth funds, and deployed capital into startups that have subsequently received uprounds led by TenCent and Stripe, among others. Not surprisingly, Maya was named to Forbes’s “Under 30 Technology” list (2018), as well as “10 Inspiring Women Ruling Nigeria’s Tech Ecosystem” (2019).
Africa Emerging as Hotbed of VC
Africa has itself become something of a hotbed of venture capital activity. As Partech, a venture firm based in Paris, San Francisco, Berlin and Dakar, reported in its annual Venture Capital Africa Report (Jan. 2020), Africa saw “+52% growth YoY in deal count,” with 37% of funding going to Nigeria:
“Africa's tech ecosystem has moved into the mainstream, transforming economies considerably, and while there are certain ups and downs to be expected in the future, this new reality is also redefining the scope of Private Equity on the continent, with Venture Capital on the way to becoming the number one asset class in Africa.”
Soon after doubling Ingressive’s AUM, Maya agreed to an interview with us (below) on her journey, and advice for others launching a VC fund.
Ed Zimmerman/Betsy Zimmerman (EZ/BZ): You founded Ingressive’s VC firm in 2017. How long was it until Ingressive first closed on LP capital? Can you tell us about the process of getting to a first close?
Maya Horgan Famodu (MHF): There’s this pervasive and entirely inaccurate belief in venture capital that keeps more people from participating. It’s the belief that you have to have a big-ticket anchor investor to set the terms and fill a meaningful percentage of your target fund size to start. I took extremely “vanilla” documents and shopped them to high net worth individuals (HNIs). Over the course of a year of gathering 6-digit individual commitments, this group cumulatively became the size that would constitute a single “anchor LP.” We didn’t close our first $1M until about a year after that.
I have a list of every investor I pitched — about 375 investors. I did 375 straight pitches.
On average, I landed about 10% — 1 in every 10 investors I spoke to committed to the fund. It’s honestly a numbers game that most people can achieve if they stay resilient—provided you have unique access to deal flow and can prove you’re a good “picker” with a promising strategy.
When I tried to launch a fund at 23 with a year of work experience, nobody committed. But I maintained contact with the investors to whom I had pitched. I made sure that they knew about every major update, every press mention, and every company in which Ingressive had invested that then went on to succeed.
Half of our investors backed us because they learned over time that I could see something years ahead. The other half backed us believing I’m the most headstrong and persistent person they know and will never give up until I hit my target. I used to be offended when people called me “persistent,” but it’s actually a differentiator that has contributed majorly to my success. Stick it out, keep your network close and stay in touch, and keep learning constantly, especially from your mistakes.
EZ/BZ: So, you set out in 2014 intending to raise a venture fund? How did that evolve?
MHF: Yes, I actually did. But barely a year out of college, I didn’t make it very far.
Ingressive originally started because I wanted to raise a $50M VC fund and when investors declined, I realized I needed another route to my end goal. So, we launched Ingressive Advisory to show our deal flow without taking the funds upfront. I basically pitched to global investors: ‘Africa is booming, and I know the great opportunities. Come with me to Nigeria, and I’ll show you the best deals. Then YOU choose whether you want to invest and do your deals directly.’ That expanded to corporates as well.
It worked, and a lot of people invested. Every trip we ever did, clients made investments and expanded their strategies to include Africa.
Eventually, some of those who traveled to Nigeria with me had enough data points and invested in Ingressive.
EZ/BZ: What would you advise others who are interested in doing the same?
MHF: If you want to be around for a long time, don’t skimp on professional services. You need experienced and industry-respected legal, fund admin, tax and auditors. Don’t be scared off by the public price tag; there are typically tiers, so you can make it work with what you have.
Go with name brands—they will only strengthen your pitch and make investors more comfortable. We started out with a one-man-shop accounting firm and spent the next year fixing what they had done. Now, we only use household names for our professional services, and those names not only add to our pitch, but they serve as experienced thought partners and advisors, ensuring we are set up with best policies and practices to institutionalize our VC.
EZ/BZ: What were some of the early wins that led you to conclude that you could turn Ingressive from a data-centric client service firm to a VC firm?
MHF: People started making money from the deals we had found them.
Also, our tech company clients started seeing massive growth in the regions across Africa where we were running programs and producing research on their behalf.
The money flowing into Africa’s tech sector went from $129M in 2016 to $560M in 2017 to $1.2B in 2018 and over $2 Billion in 2019. Andreessen Horowitz backed Zipline (see disclosure at end) and Branch, both targeting African markets. Facebook launched programs for startups and developers, and after Sundar Pichai’s (CEO of Alphabet and its subsidiary, Google) visit, Google Launchpad Africa kicked off. Y Combinator most actively, followed by 500 Startups and Techstars, quickly increased the Nigerian and African startups in their cohorts. Greycroft, WTI and many others started doing many deals on the continent, and GV backed Andela—to name a few promising moves. Something was really taking off.
EZ/BZ: What dynamics of the African tech / venture markets most surprise and impress U.S. venture investors and limited partners?
MHF: It’s not one thing. There are several:
· There is 93%+ mobile penetration and over 650 million mobile users, which is more than the US and UK combined.
· We have the youngest population with an estimated 41% of Africa’s 1.3 Billion people currently under 15 years old, and 75% of the population now under 35. (source: Population.Un.Org)
· Nigeria’s biggest city, Lagos (with the Lagos state), has 21 million of Nigeria’s 200 million people (source: CFR 2019). So the population of Lagos is roughly 2.4x the size of America’s biggest city, New York City (source: NYC.gov).
· The resilience of the African entrepreneur: once US investors come to the continent and see the daily challenges of the average African entrepreneur, and the Nigerian entrepreneurs’ ceaseless work ethic, it’s hard to go back home to Silicon Valley and compare.
· Same with the types of deals. On the continent, you’re investing in 0 to 1 technology—stuff that fundamentally changes or saves people’s lives. It’s hard to go back to hearing pitches for “it’s Uber, but for pets” after that.
· In 2018, the Houston Chronicle reported on research conducted by Rice University demonstrating that Nigerians are the most educated nationality in the US. Wherever we go, we must achieve ceaselessly. Before, families only saw their offspring’s success as multiple higher-education degrees. Increasingly now, though, given the raises and the opportunities and the liquidity events, pursuing tech is becoming a socially-acceptable endeavor.
· Achieving liquidity happens regularly through seeking (1) a specific customer base or (2) in-market players seeking tech (Interswitch acquiring Vanso), or (3) foreign acquirers using local players as a market entry play. For example, Uber acquired Careem for $3.1 Billion (source: BusinessWire Jan. 2020), and (4) listing publicly (in the West) is a reality. In roughly the last year, between the stock exchanges in London, New York and Toronto these African startups have gone public: Jumia (on NYSE, source: TechCrunch), Helios Towers (source: Reuters), and (coming soon!) Interswitch (source: TechCrunch), not to mention the deal between Helios Holding and Fairfax Africa Holdings (source: GlobeNewsWire).
· Westerners don’t realize that Nigeria has billionaires (source: Oxfam 2017), millionaires, and tech-enabled cities with massive skyscrapers, free trade zones, drone delivery systems and fiber optics. Westerners also struggle to understand the opportunity — before COVID, consumer spending hit $1.4 trillion across the continent in 2015 (source: McKinsey & Company 2017), “with three countries—South Africa, Nigeria, and Egypt—contributing more than half of that total.” We have the fastest-growing middle classes in the world in Africa, and typically at least 3 of the 10 fastest-growing economies (see, e.g., IMF tracker of annual growth of real GDP).
· You can still build high-growth companies in countries where per capita GDP is below $5,000. That opportunity still exists now, but it’s typically low-margin, high-volume businesses. mPesa (mobile phone-based money transfer service) transacts half of Kenya’s GDP annually. You can make money in Africa, but business models have to shift and execution is entirely different. There are still many untapped billion-dollar opportunities. For those targeting the middle class of Africa, the opportunity is only growing along with this demographic.
· Also, people are surprised by how different each African country’s culture and consumer demographics are. Even when launching products from one market to the other. For example, the Lagos consumer demographic is by reputation assertive, flashy, tech-enabled and online, but somewhat fearful of transacting digitally. And Nigerian regulation around financial services and mobility is incredibly volatile, as is Nigerian currency. Just next door, I would characterize the typical consumer in Accra, Ghana as calmer — placing greater priority on joie de vivre and family time — which more closely mirrors Abidjan, Cote D’Ivoire or select South-Eastern African cities. Ghana’s and Rwanda’s startup regulations are celebrated for being pioneering, and Ghana’s Cedi was just ranked the best-performing currency in the world against the U.S dollar. (Source: Bloomberg News).
· As you move from nation to nation within Africa, there’s a range in GDP. For context, China’s per capita GDP is $9,770 USD. South Africa’s per capita GDP is $6,364. Botswana’s is $8,258—while neighboring Mozambique’s is around $550. The consumer preferences, socioeconomics, cultures, infrastructure development, even government systems and political tenures vary massively from country to country across Africa.
EZ/BZ: You’ve run major events in Africa. We’re in a time of limited travel. How has this impacted your events and sources of deal flow/uprounds?
MHF: It’s made our teams more efficient and effective. Lagos has some of the notoriously worst traffic in the world, and we no longer spend hours a day in it, so we are all more productive.
As far as our deals, we’ve actually closed more deals during COVID than we did in previous quarters. We’ve also just closed our largest investment to date. Diligence was entirely conducted via Zoom.
There are a number of proxies for “gut instinct” or “trust” that before, came from sitting with a founder or spending time in a company’s office. In actuality, the COVID-era additional diligence metrics we’ve incorporated like more customer, investor and competitor reference checks makes the investment process not only more objective, but much more efficient.
We fortunately have a network of 10,000+ developers across Africa. We leverage this, as well as our co-investment and venture partners, hubs, (now virtual) pitch competitions, and fortunately, in-bound outreach. There are only a few very active pre-seed and seed stage investors in our markets, and anyone can apply for funding on our website, so founders typically know where to reach us.
EZ/BZ: Your advisor roster is impressive and it’s also heavily American. It include Seth Levine, Managing Director of Foundry Group; Kai Bond, Partner of Courtside Ventures; and Maurice Werdegar, President and CEO of WTI, among others. How and why did you enlist those particular advisors? Why is the U.S. so important to your fund and its companies?
MHF: I sought investors I liked as people, from whom I learn something new and practical every time we speak, and who have decades of investment experience and a connection to the continent.
The African tech venture capital industry is not even a decade old, so we looked to have investors with extensive tech VC experience, as well as investors who know the African market and its economic cycles well through decades of African private equity investing.
Regarding your latter question, Nigerian tech and African venture capital generally is perceived as the unknown side of a high-risk investment class. When I started, African investors were less keen; wealth had only really been generated in traditional industry or telecommunications. Intangible tech (aka software), pre-revenue businesses, even young and/or inexperienced founders were absolute no-go’s.
The US is important to our fund because it was mainly Silicon Valley investors and exited entrepreneurs who had the risk appetite to get involved at our beginning, before tech in Africa was cool. Once they started realizing returns or major traction from investments, they told their peers, and US-backed African tech grew.
Eventually, the African ecosystem will stand on its own feet, as exits will seed the next generation of startups. We’re starting to see this now with investors such as Jason Njoku, founder of iROKO Partners; Gbenga Oyebode, Nigeria’s most prominent lawyer and serial businessman, known also for his role in MTN Nigeria; and Mitchell Elegbe, MD/CEO at Interswitch and a known tech acquirer.
Until then, though, companies raising more than $500k inevitably begin to have foreign investors on their cap table, as foreign investors are still a meaningful source of seed and growth stage financing and typically have deeper pockets.
EZ/BZ: You didn’t grow up in Africa. Why did you decide to relocate there and when did you decide to do that?
MHF: My dad and a number of his brothers moved from Ogun State, Nigeria to Minneapolis, Minnesota for higher education. Almost all of them, including my father, started families with Minnesotan women. Eventually, a number of them went back to Nigeria.
My older sister and I grew up in rural Minnesota with my mother, and my younger siblings grew up in Lagos with my father.
We were so poor when I was a kid. We lived in a trailer park and truly struggled to put food on the table until I was in my teens. It couldn’t have been farther away, but many poverty dynamics of rural America are actually quite similar to those in Lagos.
I decided to move to Lagos for a few reasons. There’s a magnetic calling that I found most millennial “returnees” experience, idolizing the continent and feeling a deep-seated responsibility to change Africa for the better.
There are 1.3 Billion people, most in their teens or younger. There is 25% youth unemployment (see, e.g. Reuters showing 23% national unemployment in Q3 2018). Most African nations are still fighting to regain control of their financial systems, currency, and natural resources due to the lasting tethers of colonization.
Things can either go really well for this generation, if there are sufficient training and employment opportunities available we can end up with a generation of high-skilled techies, but things can also go dangerously wrong.
When I worked at JPMorgan and then in private equity research, I used to be kept up at night thinking about this, and about how I was using my access and abilities. It was just something to which I had to commit myself — as trite as it sounds, this is my purpose.
Not only do I have an obligation to generate economic activity on the continent, but I have an obligation to use my access to empower the next generation of African innovators.
EZ/BZ: You led a dance company in college and have written about art for the Huffington Post. How have you integrated the arts into Ingressive, if at all?
MHF: I founded “Tour of Tech” investment tours, “Tech Meets Entertainment Summit” and co-founded “High Growth Africa Summit” to garner interest in the continent and our eventual fund. All of these events always includes one “art, Nollywood, fashion” experience – in part because these are some of the biggest economic industries in Africa, and also because it is my passion.
I have over a decade of competitive performance dance experience, including captaining dance teams and performing in an off-Broadway play. Not only did this prepare me for public speaking and presenting in front of thousands, but it’s helped me to understand creative industry investing, and how to maintain composure/project confidence on stage or in a boardroom.
EZ/BZ: You spent Q2 of 2020 launching a nonprofit, Ingressive for Good (I4G); making four new investments; and closing additional LPs to double your fund size, all during a pandemic. Did you set out with an ambitious plan to do all of that?
MHF: It always makes me laugh when people only see the end result. It’s a case of the “ten-year overnight success.” We are most certainly a six-year overnight success. Ask any of our investors, or anyone in the ecosystem who knows me or our team. The overwhelming comments I’ve received distill down to: “it’s been a long time coming,” and “you finally got there!”
EZ/BZ: How are you thinking about the interplay between your nonprofit and your venture firm?
MHF: Ingressive for Good and Ingressive Capital are completely separate entities run by separate teams with distinct missions. They do not work directly together. However, they target complimentary parts of the ecosystem and Ingressive for Good programs create tech talent, provide resources for them and increase their earning power, which of course benefits the rest of the ecosystem.
Ingressive for Good provides micro-scholarships, tech training and talent placement for African youth. Its micro-scholarships pay computer science degree fees at African universities that produce employment-ready talent. They also sponsor African youth’s technical products such as a laptop or other tools, as well as online technology courses. The tech training is in partnership with top local organizations who’ve proven they produce employment-ready talent. The talent placement happens once youth complete programs and get places at startups across Africa. The purpose of the organization is to increase the earning power of African youth and decrease unemployment.
Ingressive Capital invests in pre-seed and seed stage technology companies in Nigeria, Kenya, Ghana and Egypt, and we provide our companies with access to international capital as well as Pan-African business development through our own programs as well as our network of limited partners.
EZ/BZ: Are you still helping large corporate clients enter/approach the SSA market?
MHF: We do this opportunistically through Ingressive.co.
EZ/BZ: Your companies have terrific things to say about you:
“It's been really great working with Maya. I love the fact that she's able to support us without distracting us. She's really great at helping and advocating for us in the background. When she makes an introduction to a prospective partner or customer, the conversation is so easy because she's already done the hard work of convincing them on our behalf and all we need to do is just to close the deal.” Shola Akinlade, Co-Founder of Paystack
"Our company fuelmetrics, with its focus on enterprise customers (gas station owners and fleet operators) requires smart investment that goes beyond just funding. Maya and Ingressive has provided us with such investment over the past year. Strategic industry relationships were brokered by Ingressive capital, which has had significant impact on our growth " Ayodeji Ogundiran, Co-Founder of FuelMetrics
Please talk about a few of the companies in your portfolio.
MHF: 54gene, a Y Combinator alum, is the first African genomics research, services and development company. They recently closed a $15 Million Series Aled by Adjuvant Capital, and were named by TIME as one of “12 Innovations That Will Change Health Care and Medicine in the 2020s.”
Other portfolio companies participated in Y Combinator as well — one of our first investments, Paystack, a “Stripe for Africa,” raised from Visa, Stripe, and Tencent before scaling massively across Africa.
Another, Bamboo, is giving everyday Africans unrestricted access to invest in global capital markets. 99% of Nigeria’s investing population doesn’t have access to global markets, and Bamboo allows those in Nigeria and now other African nations to buy and sell foreign stocks and ETFs in real time.
We also backed Vesicash, which provides secure digital escrow services for Africa, and OZÉ, which enables “small businesses and local ownership to grow with technology, particularly in emerging markets” (Source: OZÉ).
EZ/BZ: You recently wrote a very personal blogpost about meeting your father. How has the reaction been?
MHF: I wrote “How to meet your father for the first time in your 20s” more than a year ago and decided not to share it while fundraising as I was worried about how I would be perceived.
After we closed the fund, I decided to run it by a number of my investors. I was surprised by how supportive they were; everyone unanimously told me to share it, and that those who would be put off by such a truth would not be people I could or would want to sustainably work with anyway.
It was a relief — and honestly, has only strengthened our work and inspired others who, like me, thought a “perfect background” was a prerequisite for success in business, especially VC.
When I published, I received a flood of “me too” and “I needed your advice” personal stories by email and private message. It just reminded me that we all put on the face we think we should have, and it’s actually a competitive advantage to be authentically and proudly yourself. It provides more space for others with your background to believe that they can succeed and to see how they can succeed.
My father is a pastor in Nigeria and we’re close now. He is proud of me for sharing my story.
DISCLOSURE: Ed & Betsy Zimmerman are investors in funds managed by Ingressive Capital and some of the other venture firms mentioned in the above. Ed Zimmerman is a partner at the law firm Lowenstein Sandler LLP, which serves (from time to time) as counsel to certain of the venture capital firms and/or companies and/or individuals mentioned above.
 The same article, citing Rice University research, also notes: “Although they make up a tiny portion of the U.S. population, a whopping 17 percent of all Nigerians in this country held master's degrees while 4 percent had a doctorate, according to the 2006 American Community Survey conducted by the U.S. Census Bureau. In addition, 37 percent had bachelor's degrees."