Pule Taukubong was one of the founders of Africa Angels Network and has used the experience to co-found CRE Capital, a VC fund capable of putting "tens of millions of dollars" behind the right African start-ups. Russell Southwood talked to him about what he's looking for.
In 2013 Pule Takubong was working for an investment asset management company in New York for institutional pension funds:"We were seeing a lot of interest in the region. There was tons of capital and few deals. I was also seeing my peers become founders of high-quality companies.'
So that same year he founded Africa Angels Network as an investment holding company into which he put capital along with other angels. It put money into 18 start-ups including Andela, Yoko and My Door Handle:"Through Africa Angels Network we proved that it was possible to find viable investment opportunities in the early stage tech space."
He took the lessons learned and in 2015 created his Sub-Saharan VC fund, CRE Venture Capital with Zimbabwean fellow Board Member Pardo Makumbe:"It has a similar ethos to the Angel Network. We want to invest in early stage companies and if we find exceptional growth double down (on our investment)."
The capital base for the company came from seasoned VCs, High Net Worth individuals and family offices in Europe and Asia. It has made around 20 investments so far and continues to look for new opportunities with a fund that is in the "tens of millions of dollars."
These include: Andela's Series C round; Sweet South in South Africa, an on-demand cleaning service which services 22,000 homes per month; Yoko in South Africa, a payments and mobile POS company; a tutoring company in Nigeria called Prepclass; and Rensource, a solar company.
So what kind of start-ups is he looking for?:"I want to see founders who are using tech to solve extremely sizeable problems with market size. The team must have the ability to execute impossible business plans and they must be category defining entrepreneurs. We're sector agnostic as long as they're using tech."
So what are the biggest mistakes that African start-ups make when they approach investors?:"It depends on the stage they're at. We need entrepreneurs who find decent sized problems. We often challenge them on the numbers and say this coulds be a family business. The numbers are very important because of the type of returns needed. The other issue is understanding what the investor audience needs."
Its first investment is usually around US#150,000 but there is no limit to getting further sums from its investors if the start-up can demonstrate exceptional growth:"We've done deals for millions of dollars."
In terms of geography, the company is focused on Sub-Saharan Africa with 80% of its investments in Kenya, Nigeria and South Africa:"Interesting stuff is beginning to happen outside of these countries, particularly in East Africa, in Cote d'Ivoire in Francophone Africa and Ethiopia which has the population. Tech solutions can solve a lot."