Flash Coffee is a tech-enabled coffee company based in Indonesia that first came onto my radar while working on a supporting assignment linked to Rocket Internet, the Berlin-based venture studio that incubated and backed the company from its earliest days.

At a glance, Flash Coffee is a fast-growing coffee chain. Under the hood, it is something more deliberate, an attempt to build infrastructure for everyday coffee consumption in Southeast Asia. By blending technology, operational efficiency, and an award-winning baristas and a locally tuned menu, the company challenges the assumption that premium coffee is expensive or occasional a feat faced by South East Asia countries coffee-wise.

Following expansion into several Asian markets( Hong Kong,Thailand, Singapore & South Korea )with upto 150 outlets,they made the difficult decision to close outlets outside Indonesia during the COVID period and refocus its efforts on a single core market, Indonesia.

That pivot alongside the fact that they are penetrating a new market with a precise focus, resilience, and system depth is what makes them a compelling case study in food and beverage and how builders navigate scale, constraint, and long-term ambition in emerging markets

Here is a snapshot of the Venture

Company Details

• Sector: Food & Beverage

• Sub-sector: Tech-enabled QSR / Specialty Coffee

• Website: flash-coffee.com

• Funding Stage: Growth (Multi-round venture-backed)

• Backed by: Rocket Internet( Germany), TA Ventures, White Star Capital

• Founded: 2019

• Location: Indonesia (HQ)

• Business Model: Digitally native coffee chain leveraging compact store formats, owned-and-operated and franchise models, supported by a proprietary app, loyalty system, and operational tech stack.

• Mission: Become Indonesia most loved coffee , expanding access to premium products through curated tech driven experience

• Values:

  1. Customer Obsessed

  2. Dare to be different

  3. Own it

  4. Plan to Pivot

  5. Bias for action

Founders & Leadership

• David Brunier — Co-Founder
  Visionary operator with a background in General Management and International Business.

• Sebastian Hannecker — Co-Founder
  Growth-focused builder with an MSc in Mathematics from the Technical University of Munich.

“Our dream is to have this yellow cup of happiness in everybody’s hand.”
— David Brunier & Sebastian Hannecker

Subscribe now

Executive Summary

Flash Coffee is a tech-enabled, lifestyle-first coffee company redefining access to premium coffee across Southeast Asia. Founded in Indonesia in 2019 and incubated by Rocket Internet, the company blends technology, operational efficiency, and cultural branding to deliver high-quality, barista-crafted coffee at prices accessible to Asia’s rising middle class.

By eliminating traditional café inefficiencies through digital ordering, compact store formats, and data-driven operations, Flash Coffee positions itslf as a scalable consumer-tech platform in food & beverage. With over 20 locations across the region and a sharpened focus on Indonesia as its core market, Flash Coffee represents a case study in localised execution, disciplined scaling, and strategic pivots within emerging markets.

Innovation Snapshot

Overview

Flash Coffee’s core innovation lies in reimagining the coffee value chain for Southeast Asia from sourcing and menu design to ordering, fulfilment, and customer engagement. Flash Coffee optimises for speed, consistency, affordability, and brand resonance, using technology as the backbone of its operations.

Key Functionality / Features

1. Proprietary Digital Platform
   An in-house app enabling online ordering, cashless payments, pick-up, delivery, and a gamified loyalty experience.

2. Operational Efficiency Model
   Compact store formats, data-informed demand planning, and streamlined workflows reduce overhead costs and increase throughput.

3. Curated, Localised Menu Innovation
   Award-winning baristas design regionally relevant drinks (e.g., Avo Latte, Nutella Latte), aligning taste profiles with local preferences while maintaining quality standards.

Innovation Analysis

1. Integration & Compatibility

Flash Coffee’s digital platform integrates ordering, payments, loyalty, and delivery logistics into a single customer journey. This tight integration allows for data capture across touchpoints, supporting pricing decisions, menu optimisation, and location-level performance tracking.

2. Innovation in Business Model

The company departs from traditional premium café pricing by passing efficiency-driven cost savings to consumers reframing premium coffee as a daily habit rather than an occasional luxury, a critical unlock in price-sensitive emerging markets.

3. Scalability of the Innovation

This model is inherently scalable because it has:

• Standardised store formats

• Centralised menu curation

• Replicable tech stack that enables rapid rollout across dense urban centres while maintaining brand consistency. Strategic exits from certain markets and the introduction of franchising in Thailand demonstrate an ability to pivot structure without diluting core IP.

4. Operational Resilience

By recruiting elite baristas for centralised menu development rather than per-store dependency,they decouple product quality from individual outlets improving resilience and execution speed across locations.

5. Safety, Compliance & Sustainability

While operating in food service, Flash Coffee aligns with local regulatory standards across markets. Its compact-store strategy and reduced waste model contribute indirectly to a lighter operational footprint compared to traditional café builds.

Market and Societal Impact

Flash Coffee addresses a structural gap in Southeast Asia’s coffee market: premium quality at mass affordability. In markets like Indonesia, where average daily wages barely cover two cups of international-brand coffee, Flash Coffee democratises access while preserving aspirational value. Beyond consumption, the brand contributes to:

• Youth culture and urban identity

• Job creation for skilled baristas

• Community-building through digital engagement and physical touchpoints

It reflects the shifting preferences of a cross-generational consumer base seeking meaningful, personal, and tech-enabled experiences.

Future Outlook

With Indonesia as its anchor market and a refined expansion strategy, Flash Coffee is positioned to evolve into one of Asia’s most recognisable consumer brands at the intersection of food, technology, and culture.

Future opportunities lie in:

• Deeper data-driven personalisation

• Brand-led partnerships

• Further optimisation of franchise-led growth

• Expanding community and lifestyle extensions beyond beverages

Societal and Environmental Impact

Its broader societal contribution lies in economic inclusion making aspirational products accessible without compromising quality.

In addition , their operational efficiency model reduces excess build-outs and energy usage per store

Innovation in View

Flash Coffee’s innovation is less about radical new technology and more about system design and accessibility:

• Clean, intuitive digital UX

• Bright, recognisable visual identity

• Fast, frictionless customer journeys

The unmistakable yellow cup has become both a functional object and a cultural signal, reinforcing the brand’s ambition to sit at the centre of modern urban life in Southeast Asia.

Leave a comment

Photo by K. Mitch Hodge

The first note of the year returns to one of the most formative essays I’ve read. Definite Optimism by Dan Wang, a Chinese economist, first crossed my path years ago while I was still an engineering student with a growing interest in technology, infrastructure, and long-term systems building. It remains one of the clearest articulations of how belief, imagination, and engagement shape innovation and growth.

At its core, the essay argues that innovation is not innate; it is inspired. Societies progress when they cultivate definite optimism: a clear, confident belief that the future can be better and that it is worth building toward.

Wang frames optimism, imagination, and future-oriented belief as a form of human capital, no less important than skills or education. Without it, resources and development stagnates.

Innovation Requires Imagination

Innovation doesnt automatically occur from the “right conditions.” People innovate when they believe in the possibility of improvement. Economists and futurists often overvalue measurable resources; capital, labor, incentives and undervalue visions, cultural attitudes, and belief in progress.

A society’s long-term growth trajectory is often than not shaped as much by its outlook as by its inputs.

“A person needs to at least have the idea of innovation an improving mentality before they can choose to innovate.”

The Need for Positive Technological Futures

In recent years, especially with rapid advances in AI and the dominance of internet culture, science fiction and popular imagination have drifted toward dystopia. Imagination shapes possibility,what we consume informs what we believe can exist.

Healthy technological cultures require optimistic world-building. Art, film, literature, and storytelling considered soft luxuries are more than that, they are tools for expanding collective ambition. A positive promotions shares and expands the possibilities in future.

“The dominant mode in modern sci-fi is dystopia… the contrarian project is to present an earnest, joyful vision of the technological future.”

Share

Manufacturing and the Loss of “Doing”

The essay makes a less comfortable and critical point: distance from manufacturing erodes innovation capacity. Skills decay without actively being used.

Manufacturing embeds tacit knowledge—learning that comes from actively using the skills : touching machines, fixing systems, optimizing processes. When this disappears, societies produce thinkers and app designers and fewer builders of energy systems, transport networks, or industrial infrastructure which is critical mostly in emerging markets.

For a continent that has never fully industrialized( Like Africa), the consequences are sharper. Over-reliance on virtual skills and service industries without material depth weakens long-term innovation capacity.

Fewer engineers lead to fewer students entering engineering, which leads to fewer innovators.

“The fewer the manufacturing workers and engineers, the more removed everyone is from the particulars of industrial processes, and the more remote that knowledge becomes in each successive generation… the details of the industrial world become further and loftier abstractions.”

Service Sector Growth Is Often Zero-Sum

Most of the service industries cancel each other out—lawyers against lawyers, ads against ads, compliance against compliance. Activity increases, but productivity stagnates.

“One firm or person decides to sue another, creating the need for two sets of lawyers. One candidate attempts to raise a hundred million dollars to win an election, and the other side has to do the same, and meanwhile only one can win,the zero-sumness is often asymmetric.”

Manufacturing, energy, logistics, and infrastructure scale productivity. Services often redistribute it.

Girardian Conflict and the Inward Gaze

An especially timely insight is the application of Girardian theory in conflicts. Social media intensifies comparison loops. Attention turns inward towards status, critique, and culture wars rather than outward toward building.

“I entreat more people to consider their news consumption in these terms—most of us do not need to pay attention to the day-to-day goings on in the political/trends world. There are too many sites and personalities that have completely re-oriented themselves to telling people how they ought to feel about themselves and the latest piece of news.”

This fixation dilutes focus, particularly among youth, and quietly erodes human capital. Progress slows when societies watch each other instead of constructing things together.

Remember the Material World

And lastly is the digital products obscuring the machinery beneath them. Phones are minerals, chemicals, chips. The internet runs on undersea cables and logistics moves on ships and ports.

We talk endlessly about apps, platforms and communities, but they only work because of fiber networks, data centers, towers, energy systems, and hardware ecosystems. Innovation that ignores the material world becomes shallow.

The most productive focus lies in energy, engineering, manufacturing, logistics, and infrastructure.

Subscribe now

Actionable Recommendations

Wang closes with two simple demanding prescriptions:

1. Engage actively with the material world. Learn about energy systems, industry, engineering, logistics, and manufacturing.

   To be a bit more future-looking, consider the technological civilization in the year future, 2300. Then figure out what kinds of theoretical,social and practical breakthroughs people need to solve in the near future before we get to that stage.

   “Go ahead and pick an industrial phenomenon and learn more about it. Learn more about the history of aviation, and what it took to break the sound barrier; gaze at the container ships as they sail into port, and keep in mind that they carry 90 percent of the goods you see around you”

2. Promote cultural works that celebrate innovation. Fund films, books, events, art, and world-building that portray a future worth constructing.

   Unironic celebrations of innovation in popular culture. That means, for example, shooting more science fiction movies that are not fixated on the ways that technology will kill us all.

   “Let’s see more examples of invention, exploration, and risk-taking in film. And also more images of what the world of tomorrow will look like.”

The main takeaway from the essay is that society’s true engine of growth is not policy or capital alone, but the shared belief that the future can be built better than the present.This is the foundation of any type of innovation, growth or development. The believe,optimism and application of it in our day to day living.

Yes, the material world is crucial so are other fields and sectors; Art world, social sciences,media etc. At the centre of it all is the communal belief and action on the available knowledge.

Welcome back to The Builder’s Memo: Field Notes.

Subscribe now

1. What Savannah Fund Invests In and Why

Savannah Fund positions itself clearly:

US$25K–$500K seed investments into early-stage, high-growth technology startups in sub-Saharan Africa.

Their goal was to fill the critical gap between angels and larger VC funds by pairing capital with Silicon Valley–level technical mentorship. In the early 2010s, this positioning was bold. Many investors were still deploying capital in short-term,low-risk, socially oriented ventures. Savannah Fund took the opposite stance by wanting to build Africa’s high-growth, high-ambition tech companies.

2.The Three Types of African Entrepreneurship Distinction

One of the thesis’ most important contributions is its segmentation of African entrepreneurship into three categories. This not only decimates knowledge but also explores the types of entrepreneurs and differentiates them from each other:

1) Survival Entrepreneurship

Small, informal businesses that sustain livelihoods. Often the focus of microfinance and impact investors.

2) Lifestyle Businesses

Small to mid-sized ventures (5–25 employees) that aim for stability and local control, not rapid scale.

3) High-Growth Ventures (Savannah’s target)

Led by technically capable, mission-driven founders with a willingness to take big risks, bring on partners, and chase exponential growth.

Savannah Fund( and most VC Funds ) exclusively targets the third category ventures with the potential for outsized returns, rapid scalability, and deep technology integration.

This clarity sets them apart from impact funds, microfinance, and donor-backed programs that dominated the ecosystem at the time.

3. A Strong Founder Bias

Savannah’s philosophy is explicitly founder-first. Their ideal founder:

• has strong technical depth (they use coding tests to filter teams),

• is mission-driven,

• is coachable, data-oriented, and adaptive,

• can pivot, learn quickly, and survive the turbulence of early-stage building.

They believe:

“Technical ability is the strongest predictor of a team’s resilience in Africa’s markets.”

The absence of a CTO, reliance on outsourced development, or heavy technical debt is a major red flag in funding and building startups and ventures.

4. What Savannah Fund Does Not Fund

This thesis is unusually direct about what they avoid:

1. Charity or Social Enterprise Models

They are 100% for-profit. “Doing good by doing well,” not donor-driven missions.

2. Donor-dependent sectors without commercial models

Examples: mHealth, rural energy, public health.
They will invest here but only after 5–10 times deeper due diligence.

3. Content sites monetized via ads

Africa’s low CPMs, fragmented audiences, and weak ad markets make this category unattractive. Many applicants pitched blogs or local content sites; Savannah passed almost all of them.

4. Teams with no technical foundation

Especially those using WordPress prototypes or outsourcing the core product. As shared very early, technical foundation is key in building highly scalbale ventures.

5. Companies without legal structure, proper equity splits, or vesting

They emphasize cap table hygiene, legal setup, and founder alignment early. A structure which showcases the teams preparation and potential to tackle their problems which is a recurrent aspect of building startups.

5. Philosophy on Market Research, Plans, and Traction

They rejects the traditional business plan as a predictive tool. Instead, they champion:

• lean startup methods

• rapid launching

• customer feedback

• early revenue

• clear metrics

• validated insight over theoretical research

They argue that:

• Plans don’t survive contact with customers.

• Slides don’t matter without traction.

• Awards and conferences are not traction.

• Pivoting is normal.

Their metric of seriousness is simple: Are customers using and paying for the product?

6. Global Mindset, African Market

Savannah Fund refuses to be boxed into geographic borders.

They will fund:

• a Zimbabwean founder in Australia,

• a Kenyan team serving South Africa,

• a global startup with African customers.

The core criteria:
The venture must serve African markets or unlock uniquely African value.

They see African tech as inherently global part of a worldwide venture fabric, not a siloed ecosystem.

Share

7.Relationship-Building Matters

Savannah emphasizes introductions, trust-building, and proximity.
Typical patterns include:

• long engagement before a deal (e.g., 8 months with biNu),

• preference for founders embedded in the ecosystem,

• visibility within hubs like iHub Nairobi.

Investing is described as a partnership akin to a “marriage,” not a transaction.

This explains why their first deals often came from communities they knew deeply.

8. Accelerator as a Filter and Compass

The Savannah Accelerator was designed to:

• test founders’ adaptability,

• help them move toward product-market fit,

• accelerate learning cycles,

• expose them to mentors and UX labs,

• pressure-test business fundamentals.

They explicitly state: It is not an MBA.
The goal is velocity, not theory. Startups that fail to learn weekly, validate assumptions, or launch early are “zombie startups” by demo day.

9. Business Acumen = Traction, Insight, and Adaptation

They evaluate business capability through:

• customer acquisition and retention,

• recurring usage,

• repeatable revenue cycles,

• ability to pivot on real insight,

• understanding of competition and unmet needs.

They prefer:

100 active weekly users over 1,000 signups from a pitch event.

This bias toward execution over optics is consistent throughout the thesis.

10. Final Observation

Looking back, Savannah Fund’s thesis reads like a roadmap for African venture before the ecosystem matured. Its foundations remain relevant today:

• technical founders,

• lean execution,

• revenue as a core signal,

• global mindset,

• avoiding donor distortion,

• clarity on founder types,

• long-term support,

• ecosystem depth over hype.

This thesis didn’t just outline a fund strategy it showcased and shaped how many people came to understand African VC.

Leave a comment

Savannah Fund’s original investment thesis is one of those texts.
It is, without exaggeration, the longest and most extensive thesis I’ve ever encountered from an African VC, and yet it remains one of the most insightful.

If you’ve ever wondered how a VC fund built in the early days of African tech thought about the continent, this is a perfect place to start.

Reading it feels like stepping back into the early 2010s: a period when African tech was still raw, infrastructure was fragmented, capital was scarce, and the idea of a thriving startup ecosystem was more belief than reality. Savannah Fund built its thesis in that context and the depth shows.

This memo contains the complete thesis: Summary ,part 1 & part 2 then the follow up Memo will be a guided exploration of the memo.

Savannah Fund Thesis Summary

Savannah Fund is a seed capital fund specializing in US$25,000-US$500,000 investments in early stage high growth technology (web and mobile) startups in sub-Saharan Africa. Initially focused on East Africa, the fund aims to bridge the early stage/angel and venture capital investment gap that currently exists in Africa. The Fund expects to achieve this objective by combining capital with mentor networks both in the region and from Silicon Valley via an accelerator program and a follow-on independent seed fund.

Here is the long form,a long read. Enjoy:

Investment Thesis Part 1: What we do and don’t fund

In a recent Forbes article, I outlined the need for investors in Africa of all types to get better at messaging what areas they invest in. Its not enough to just say “we are an early stage tech investor” anymore. The technology scene is getting larger and more and more startups, regions and verticals are interested or building tech ventures. More importantly different investors have different approaches. For instance, it is easy to try lump different types of entrepreneurship (the primary customer of an investor) under one banner. I segmented out the 3 areas the way I see it:

1. 1) Survival Entrepreneurship: In Africa’s high unemployment market characterized by low-skilled informal/semi formal businesses- impact investors, many with experience in microfinance or financial inclusion, target these entrepreneurs in their mission to help communities climb out of poverty and earn a sustainable income. If not the entrepreneurs directly, they target the base of the pyramid as customers for the startups for basic services like water, solar lighting etc…

2. 2) Lifestyle Business: Business of up to 5-25 employees with founders wanting to control their destiny, often the business can be a family one. This is actually a dominant form of entrepreneurship in Africa and around the world, there are very few Zuckerbergs, but there are many entrepreneurs running a small business. Everything from restaurants to increasingly mobile apps with a niche but attractive enough audience generating income from App stores. Closer to tech and Africa, it might be a freelancer at the iHub doing consulting work. These businesses would love to grow bigger, but typically not outside their own borders or scope of founder’s skills and talent.

3. 3) High Growth Venture: Typically characterized by a founder with a bold vision, highly skilled technical ability, willing to take a big risk and willing to bring on partners (inc. investors, strong cofounders) to make their mission a reality. Should they succeed they generate high returns for their investors and generate 1,000s of jobs. Paul Graham’s Startup=Growth Essay is an extreme take on this type of entrepreneur and what they should focus on at all costs. Professor Isenberg from Harvard, hits the nail on the head as well with realizing that there is a danger offocusing too much on startup creation vs focusing on their growth.

All 3 are vitally important to African economies and some entrepreneurs may even go through all 3 in 1 venture (although very unlikely- more likely Lifestyle to High Growth) or try all three as separate ventures.

At Savannah Fund we are interested in the 3rd High Growth (and consequentially, high-risk) type of entrepreneurship which matches up well with technology (web and mobile) sector given the ability to scale out fast and hence achieve rapid growth. It also means we use equity and very little debt initially to get the business going. We bet on the founder and aim to be their business partner, connecting them to both our local and Silicon Valley mentor and investment community who have experience and focus 100% on tech.

That’s why for instance, we use a coding test as our filter in the absence of products in the accelerator to ensure that one of the founders is technically outstanding to carry the startup through the long journey and likely many pivots required in iterating the product. Strong technical ability also is a good prerequisite of being able to understand metrics and be coachable in other areas of business- you hope the other founder has these qualities inc. high risk appetite and ability to sell and hire future employees.

The founders typically are very “mission driven”, this is very different to impact investors who focus on specific do-gooder goals. One litmus test of this type of entrepreneur is whether they have $1 to their name or $1M, they remained razor focused on achieving their growth goals.

A good book that does a good job further outlining the importance of different approaches to founding a company is Founder’s Dilemma which I reference many times to entrepreneurs and bring up in various slide decks. It’s critically important we apply this type of thinking to African startups since in the early days, entrepreneurs have little local reference of what it is like to grow a VC backed venture- it is also further complicated with the rise of “social enterprises” (more on this later).

Traditionally a VC firm may outline an investment thesis (Example: take a look at Union Square Ventures) – they have to do this formally when they raise money from their limited partners. We do the same. At the same time, technology changes so fast; what was hot last year may no longer be hot today. Entrepreneurs over time should be able to deduce from the fund’s portfolio what type of companies fit and more importantly if the investment firm fits your startup.

We have been around 6 months and made 1 formal Seed/Series A investment and as of today we have launched our accelerator with 4 startups selected down from 170 applicants. But we are still early days, hence the need for this post to better clarify our goals and help entrepreneurs reaching out to us.

In the rest of this and next post, I will start to outline our current thesis more broadly as we see what is out there and iterate on our own thinking:

• Savannah Fund is not a Charity or “Social Enterprise Fund”- 100% for profit: We have tried to make this very clear and it might not be clear enough- we are on the side of for profit private equity- so pitching us a charity or social Enterprise is not a good fit (in fact, we believe many are trying to transition into lifestyle entrepreneurship category with few paths to scale a tech venture)- that being said, I have noticed some founders label their startups “social enterprise” as a marketing strategy to appeal to impact investors, we don’t fall for that since we are not an impact fund. We believe in doing good by doing well, but we want to grow wealth in Africa which in turn translates into social benefits. M-PESA is a commercial service owned by a corporation but is squarely in sight for impact investors interested in financial inclusion for the bottom of the pyramid, TOM’s shoes makes a lot of money selling shoes and donating a pair on the sales level (not legal structure level). The impact investment world is swarming around Africa right now and that’s a good thing, but we want to remain clear and focused on building Africa’s private equity scene, particularly early stage VC/angel networks. What this actually means is that we also are very cautious when we look at areas that have traditionally been donor funded, for instance mHealth or rural energy- in these sectors you might find many players in the ecosystem dependent on donor funding or NGOs to deliver their work, whilst there is a huge impact tech can play here, there is typically a lot of aid money in these areas that makes it hard to invest at risk of being “crowded out” or creating the wrong incentives around the product or service delivery ecosystem. We will still look at strong tech plays in these sectors, but we’ll likely do 5-10 times the homework/due diligence vs say a gaming company. If your business is targeting the Bottom of the Pyramid African “BOP”, for it to be sustainable, substantial scale is required in Africa, meanwhile the emerging middle class is growing all the time and they are more connected online than ever, so distribution to reach them and hence growh is becoming easier. As I mentioned before in reference to Founder’s Dilemma, a founder may create a social enterprise in Africa and not realize the challenges of raising seed funding in that environment with the right tech focused investors down the line when it comes to scaling out or their SMS/feature phone solution which may rely on partnering with multiple mobile operators to reach the BOP segment customer base. Or they may rely so much on grant funding to get going, they completely forget to align incentives or learn what VC investors seek when looking for growth capital because of their legal structure, internal behaviors and incentives of the founder/employees.

• Incorporation + Set up Employee Incentives: Many startups have not done the ground work of getting legally registered as a corporation or limited partnership. Savannah Fund invests in entities not your personal bank account. Again, many startups might be at the prototype or idea stage and probably are eyeing up setting up the company once they secure funding, that is understandable given the cost and time it takes in many African countries. We have lawyers in our network across the continent but being on top of this helps quite a lot. Related to this is spinning out a non profit to a for profit- don’t assume we’ll just be happy funding your spin out without proper thought about setting up the right legal structure to take external capital and finding the right team members for the startups. Related to this is Cap table and vesting/reverse vesting for startup founders. Many repeat the mistakes where cofounders have no skin in the game in the startup or if they decide to bail they walk away with a big chunk of equity. Startups everywhere, including Africa, need to be thoughtful about this- there’s plenty of tips on venture hacks– but at the same time, do what makes sense for your market. Equity as compensation may not be as valuable to employees in Africa as it is in Silicon Valley. That being said, the biggest asset an early stage startup has are its people/founders- be thoughtful in motivating and retaining them (hint: being mission driven helps a lot). In our accelerator, the first session we had for the startups was what I coined “Term Sheet Day”, where we brought in our legal counsel to give a primer on shareholder agreements, boards, secretaries and investment terms. It becomes much harder to do this if we backed a team that has been a non profit for years and used to raising donation money and churns a lot of volunteer staff.

• Not every Africa content site is ripe for investment- especially monetized via ad networks: By far the most number of startups we have had pitch us are those who have created a website with maybe at most 1,000 visitors a month. Even ones that are at 100,000 visitors a month (particularly in 1 country). The issue with content sites is maintaining engagement, growth and most importantly relying on monetization via adnetwork with low Africa CPMs or a fragmented audience. If you saw the news recently, InMobi, one of the most active mobile ad networks in Africa pulled out. It is incredibly hard to monetize Africa sites on traditional display ads. I recently signed up to iRokoTV over the weekend and I saw 3 video ads of 2 mins each before I was exposed to the free film. Meanwhile, I saw the classic “get Gmail on the go via SMS” about 5 times on different pages. There simply doesn’t seem to be enough advertising spent online in Africa to match those billions of impressions your site might generate. So unless you have a creative way to monetize, there is little interest from us- especially if you don’t even really capture user info and know what demographic they really are. Show us why the users on a gossip site will be worth more than a news site with diaspora readers- I gave some examples in my Valuation for the Africa Startup deck. This may change over time and it becomes even harder to surface ads as Africa is a mobile continent- but at the heart of it, advertisers need to start spending real money to reach African audiences before viable VC backable business built on an advertising business model- and even then, investor appetite, including ourselves looking at global trends (Facebook and mobile anyone?) don’t favor ad based consumer web business currently.

• How you get introduced, referred and get to know Savannah Fund matters a lot: Many startups just contact me traditionally and they will send me e-mail updates with no context. An investment in a company is like a marriage, its not a one time deal and then we walk away, some companies we could be working with for 5-10 years. So building a relationship matters, it allows us both to decide if it might be a good idea to work together. Our first deal, biNu, was 8 months in the making (before Savannah Fund was even up and running). It also takes quite a long time to get Africa tech deals done due to paperwork, synchronizing investors and time it takes to due diligence a startup (more on how to shorten this in the next post). We take a riskier bet and cast our net wide on the Accelerator and even then it took us 2 months to screen and select the startups. So get to know Erik, myself and Paul over time and this improves chances dramatically. It is no secret that I am found around the iHub getting coffee in the mornings from 8am-10am, I am typically also at my most engaged, I am a morning person, so am hungry to hear any interesting news then vs at 3pm when I just battled Nairobi traffic for various meetings and errands and have a ton of e-mail to attend to. Generally, those in East Africa around the iHub community have a better visibility to me. If you are startup in Nigeria or South Africa , its just that much harder to build a relationship, but still possible as we showed in our first deal with the company all the way in Australia. We do travel and we are building strong links with other investors across the continent who share in our philosophy and approach to serving tech startups.

• Tech VC is a global game- we don’t just fund local teams: We turned some heads for funding a Zimbabwean living in Australia with a company with traction in Africa. We did not set up Savannah Fund to be restricted by borders, but we did set up to be in Kenya for a variety of reasons including Nairobi as a vibrant and connected community. Our first deal had co-investors from Australia, Africa to California (3 continents). What is most important is that you are building a startup with an African customer base or are selling something uniquely African to the world. And we can help in building these ventures given both of our expertise and networks. Many ventures abroad might need an investor in Africa to help and inform them here- many African ventures might need connections abroad to help them scale and source further investment abroad- we can help with both. As an example, I like to quote one of our investors Tim Draper of DFJ who has invested in Skype in Estonia and Baidu in China – they have global network of funds in different countries to take a more local approach. Another investor in our fund, 500 Startups, is literally blowing up startups globally with 400 investments so far in 20 countries. We are global to the core- we expect a lot of our startups to be like-minded.

  ---

Investment Thesis Part 2: What We Do or Don’t Fund. Ready for the Startup Journey

Business plans and market analysis? No. Get on the Journey to Product-Market Fit

Plans are worth exactly the paper they are written on in the early stage startup world. Plans don’t get funded to succeed, traction and results do– at least for smart entrepreneurs that we want to work with. We have seen the best plans go to waste because startups can’t execute, inspire and grow a team.

We have seen startups that think winning awards or having a conference speaking slot is traction vs talking to and working with customers. We have seen startups that spend most of their time talking to mobile operators and corporates vs solidifying their own product and getting customer feedback quickly. The business plan is rigid and it only shows you might be good at writing, heck maybe its someone else’s business plan that you borrowed, cloned or worse that a consultant helped you write that you don’t even believe in.

We believe in the principles of the lean startup (Eric Ries) and/or customer development (Steve Blank). Launch, don’t perfect, move fast, get early validation on key assumptions quickly. If you rely too much on a plan, you are not dynamic enough to do a pivot when the world changes around you, or more likely your customers.

The best market research is your own customer insight learnt by working on your business not something you researched from McKinsey reports or worse, CIA factbook on Africa.

The best market research is when you have a customer who has paid you and is actively using your product, you should slap any consultant in the face when you can show them a repeatable cycle that brings in cash whilst keeping customers happy. In Africa, formal market research can be expensive and stale, so I embed a slide below around different methods of doing this- but its not a substitute for 1st hand research as part of the startups.

Mo Ibrahim was pretty crazy to launch a mobile operator business in Africa– there was no “market” for cell phones for cellphones in Africa right? Now Smartphones?

Market sizing for the africa startup from Mbwana Alliy

Startups, are a journey, with many twists and turns, to product market fit, where things take off- this is often where an accelerator can help- in the Savannah accelerator, we act as a sounding board by bringing on the resources, from iHub UX lab to the mentors to act as a compass guide- the best startups use these resources wisely whilst focusing on the business, not getting distracting- it is NOT AN MBA.

If you are not learning something new about your customers and how to improve your product every week you are failing, if you spend the entire time in accelerator time launching and not getting any early feedback and traction you are failing- you are bound to run out of money by demo day and turn into a “zombie” startup.

It takes a team- a solid team- And it starts with a strong technical foundation

By far the biggest filter we have as Savannah Fund is the technical ability within a team- many startups outsource their technology to India or Eastern Europe, even worse some startups cobble something together in wordpress for the purposes of applying to the accelerator.

We can see right through this, sometimes we will entertain the startup that has outsourced the tech for practical reasons and has been working on a full time CTO, but that’s the exception rather than the rule. It is possible to show a level of traction without a CTO, but before long that will start to catch up with you when you start to have bugs or need to rapidly pivot the business.

A smart CEO will understand that outsourcing means managing “technical debt”. And in Africa, many startups simply won’t scale due to the sheer weight of the technical debt by not having a solid technical foundation. Of course, I am not blind to the fact that it’s hard to find qualified talent, having a great mission and good leadership can inspire great technical talent to join your team.

So when a startup is doing something uninspiring like, cloning an existing business and no clear differentiation, they should not be surprised when they can’t attract good technical leaders and talent. Having a good technical team means that you are well equipped for the ride and often at the end there is a product and maybe even IP to salvage, should things go wrong, most of the time you play the game again by pivoting vs thinking you are rebuilding the castle from the drawing board.

Since every business in the future is likely to have a software component in it, this is an important issue for African startups to think about- if you don’t, someone from China, India or Silicon Valley will do so and come into the market. We believe that innovation relies on technical ability, in house ability, to cope with the startup journey.

Business Acumen = Traction and Adaptation

On the business side, its extremely simple- are startups solving a problem or addressing an unmet customer need? Are they doing this better than anyone else and the competition? Typically a unique customer insight or usage with key metrics acts as evidence beyond the idea and a pretty site or app. E.g. We signed up 100 customers, 50 come back every week and 10 are paying is better than 1,000 registered users who signed up the product after the one of many African contests or press articles. Sometimes its obvious when we sign up to use the product and it works like magic, but of course its impossible to test the product when its not even available in the market because some startups have “launch jitters”, which often

• 1) stem from a shyness to launch by perfecting and going against lean startup principles or

• 2) They don’t have the technical chops to release a Minimum Viable Product (MVP)and start measuring results early and validate customer need and assumptions.

Often the case is that entrepreneurs have outsourced core technology so they focus on perfecting for a big launch since they paid so much to developers that they want to get it right vs having a CTO on board that can change course on daily basis as quickly as the “plan changes”.

The reality is that many businesses don’t look exactly as they do in the business plan from day one, but it is the ability to adapt to new learning that’s the environment that a good startup thrives.

Looking back at our 10 investments to date, this thesis has been remarkably consistent to those who are succeeding vs those who are struggling, particularly when it comes to generating revenue, an all important metric for raising follow on financing to keep staying in the game and to scale out.

In future, we will post more as to what lessons they have learnt that are unique to the African environment by sharing it on this blog. Even as Savannah Fund, we learn as we go along with every new investment what works and we also urge investors to take more risks in investing startup traits that succeed for the journey vs perfect plans that are never really perfect.

The follow up memo shares a guided exploration of that thesis:

• what Savannah Fund was designed to be,

• how they thought about Africa’s startup landscape,

• the sectors they pursued (and deliberately avoided),

• how they interpreted risk, market structure, and investing in frontier markets,

• and why their approach still makes sense today.

12-weeks of sharpening analysis, deepening networks, publishing consistently, and building muscle memory stepping into venture capital.

The model: Learn → Apply → Publish → Share → Network → Iterate.

But how are we approaching it?

Weekly & Monthly Plan

Checklist

• 1 investment memo per month

• 1 startup conversation per week

• 1 ecosystem insight post per week (LinkedIn / Substack)

• 1 new industry connection per week

• 1 monthly sector deep dive

• Publish the Timbuktoo Capstone ( End of Year)

• Weekly update on the “Inside Timbuktoo” publication

Goal; turn curiosity into insight, and consistency into visible work.

1. VC Fellowship Capstone Project Work(3-Month Sprint)

Having selected Timbuktoo by UNDP Africa as a capstone focus project, research, learning and interviews and I believe Id like to be a long-time player in the project, with the Capstone to be published at the end of December, a weekly publication series, INSIDE TIMBUKTOO follows.

Timbuktoo Project — UNDP Africa

Timbuktoo is UNDP Africa’s pan-continental innovation program designed to build a sustainable innovation ecosystem through thematic hubs, university-based “Unipods,” and a catalytic venture fund. Launched at the 2024 World Economic Forum, the initiative goal is to reshape and support development of Africa innovation infrastructure.

This has been the perfect capstone. The goal, vision and approach of the initiative marries with my long term interest and outlook of the African innovation ecosystem development.

In the INSIDE TIMBUKTOO series we take an indepth look at the initiative.

Focus Areas

• Hub-by-hub ecosystem analysis

• Funding strategy & early founding-team considerations

• Sector-specific insights

• Regional strengths,selection and continental collaboration.

• Founder conversations within the Timbuktoo orbit

• Stories from hubs, unipods & ecosystem builders

• Policy updates,changes, recommendations & operational observations

• Key updates on collaborators, partnerships & the future of African innovation through Timbuktoo

This is both a research series and a practical window into Africa’s growing innovation architecture.

2. Targeted VC Roles

The VC ecosytem is relationship-driven field, with an interest in community,culture and the entrepreneurship ecosystem road to getting into VC blends visibility, curated outreach,community support and targeted applications. A few roles of interest have stood out.

A) Priority Role Paths

Three buckets aligned with strengths, interests, and long-term goals:

1. Venture Associate / Investment Analyst

• Deal sourcing

• Market research & ecosystem mapping

• Pipeline analysis and CRM discipline

• Screening + lightweight diligence

A natural fit for my analytical style and ecosystem instincts.

2. Platform / Community / Ecosystem Associate

• Founder engagement

• Community building & events

• Portfolio support

• Content, storytelling, ecosystem visibility

Aligned with community & culture experience and interest.

3. Venture Studio / Innovation Program Roles

• Early venture scouting

• Program coordination

• Venture building

• Sector mapping + founder support

Ideal for builder mindset and deep curiosity about early-stage ventures,innovation and ecosystem growth.

B) Target Firms (30–40)

In addition to the selected roles, reaching out and working with people from firms is a crucial step. The firms have to match my thesis ,sector preferences and other important values. The sectors includes:

• Digital Infrastructure

• Agritech & Climatetech

• Mobility

• Manufacturing & Deeptech

• Community-led ecosystem platforms

This firms Include:
Norrsken ( Rwanda), Novastar(Nairobi), TLcom(Nigeria,Kenya,UK), Partech(Senegal)), 500 Global Africa(Remote), Sawari(Egypt), E4E, Future Africa(Nigeria), EchoVC(Nigeria), Chandaria Capital(Nairobi), Goodwell(Nigeria,Kenya,South Africa), Knife Capital(Cape Town), Pariti, Sherpa Africa, LoftyInc(Nigeria), Flat6Labs(Egypt), Flat6Labs (Tunisia), Launch Africa(Mauritius), Platform (Nigeria), Partech among others.

The list helps and guides intentional outreach

Share

3. Networking Strategy

With a long time goal of building a pan african and global network with people, culture, and community as personal stronghold, I believe a formalized approach with each conversation becomes a learning moment, fun engagement, seed, or potential door. Lets see:

A) Networking Targets

1. VC Analysts & Associates (Peers) - Practical advice, referrals, support, shared insights.

2. Fund Managers (GPs / MPs) - Guidance, soft mentorship, hiring signals, and strategic conversations.

3. Program Managers - Across:

• Accelerators

• Corporate innovation units

• Timbuktoo hubs

Support acquaintances with research,insights and probable gateways into opportunities, partnerships, and program access.

B) Monthly Networking

• 2 CEO /Founder conversations

• 3 VC operator conversations

• 2 ecosystem builder conversations

• 1 senior GP / MP conversation

• 1 new peer relationship (slow, long-term community building)

4. Monthly “VC Snapshot” Series

This long standing interest in research, analysis, and ecosystem breakdowns, continues the momentum on the Builders Memo. This is a change from the weekly Memos from the fellowship to something more professional, a structured continuation of the Builders Memo: Field Notes. A consistent monthly entry featuring:

• Startup breakdowns

• Sector snapshots

• Deal analysis & memos

• Founder profiles

• Macro ecosystem observations & research insights

Conclusion

Well, another adventure begins,a 12-week sprint designed to:

• Decode & understand the Timbuktoo initiative → key moments, hubs, sector deep dives, and founder spotlights.

• Build visible, trackable VC craftsmanship → sourcing, analysis, memos, and founder conversations.

• Strengthen ecosystem understanding & credibility → through consistent publishing and thoughtful insights.

• Shape, connect with others, share & understand future opportunities → VC roles, partnerships, mentorships,sectors and entry into top programs & firms.

Learning, building, documenting, and going all-in.

Twelve weeks. Disciplined action. Clear direction.

Leave a comment

Selected as part of the 350 from over 3,000 applicants, and finally making it to the 120 who completed the journey after a couple of drop-offs. The weeks were demanding. The nights were long. But the growth was real. Somewhere between the first attempt at a thesis,due diligence, Venture Modelling and the refined versions of the Thesis that came later on there was a shift, how much had been absorbed, how clearer my thinking became, and the depth I had stepped into this world.

The person who walked in is definitely not the same person walking out.
I’m leaving more refined, more grounded, and more confident as a venture operator and builder which is just but the beginning of backing founders, shaping infrastructure projects, supporting ambitious entrepreneurs, and building a long-term legacy in the VC world.

Subscribe now

Stepping Back, Looking Ahead

The goal has been made even clear; to be a catalyzer someone who strengthens entrepreneurial and innovation ecosystems.

This is only the beginning of a lifelong journey:
to empower entrepreneurs,
to build infrastructure,
to support ambitious people,
and to shape the world rising into its moment.

Now comes the pause.
A breath in, a breath out.
A quiet moment to define the next steps as we continue sourcing,researching,learning, looking for opportunities and supporting founders across different ecosystem.

Some paths already stand out:

1. The Timbuktoo Initiative — UNDP Africa.

The idea of contributing to one of the continent’s largest innovation-building thematic innovation hubs, unipods in universities , a pan-African fund is energizing. It is ecosystem building at scale. Research, field insight, storytelling, and on-the-ground exposure across different African markets? Honestly, it feels like the dream role for someone who loves to understand places, people, and the systems they’re building. And a project of interest. Top of priority list. Perhaps take it up as the Fellowship Capstone project

2. Dream VC – Investor Accelerator (2026)

Another program I have been eyeing for a while, built for serious Africa-focused VCs analytical depth, hands-on case studies, and a capstone that lets you dive into a sector you’re obsessed with. Given how much I’ve grown, layering these skills with structured training feels like a natural continuation.

A space that will give me a chance to explore the African ecosystem having just finished a global program would be an opportunity that would make my world go round.

3. Hummingbird Ventures – Analyst Program (2026)

Not the typical analyst path.A two-year immersion into global VC out of one of the world’s top financial hubs,London .

Real field experience, real investment exposure, and a chance to learn in an environment where capital flows at scale. For anyone serious about mastering venture capital, understanding markets, and interacting with global LPs this is a powerful next step and launchpad.

4. Vento Venture Program (2026)

The founder route.
A venture-building path in Italy that has always fascinated me. Some of the best investors started as founders ;exploring problems, building prototypes, and learning by doing. I passed on the 2025 interview to focus on VC fellowship which has been absolutely worth it, the door remains open and it might be tim to knock. And honestly? It’s tempting.

Creative, hands-on,adventurous, in Italy and aligned with the desire to build and entrepreneurship. Wow!

I’m grateful for the knowledge, the network, the clarity, and the push the program provided. Now, it’s time to step forward refreshed, intentional, and ready for what comes next.

Thank you to the Decile Group( VC Lab & Venture Institute for the time ,knowledge,skills and network. The journey just began….

Leave a comment

1.Venture Overview

Name: Loop Pet Food
Location: Nairobi, Kenya
Stage: Pre-Seed / Seed
Round: Raising $500K (SAFE, $2.5M valuation cap)
Sector: AgriTech → Sustainable Pet Food / Climate Tech / Alternative Proteins
Founders:

• Laura Stanford — CEO, insect farming pioneer with 5+ years of experience across East Africa.

• Amit Graboski — COO, 15+ years scaling businesses globally, 5+ years in pet nutrition.

What They Do:
Loop manufactures sustainable pet food using Black Soldier Fly Larvae (BSFL) protein, whole vegetables, and grain-free formulations that meet EU/UK FEDIAF standards solving for affordability, climate impact, and local manufacturing gaps.

They are currently Kenya’s first and only insect-based dry dog food manufacturer.

2.Problem & Insight

Loop sits at the intersection of three structural problems:

a) Environmental Crisis in Pet Food

Pets consume nearly 20% of the world’s meat, contributing 64M tons of CO₂ annually.
Insect protein has up to 20x lower emissions.

b) Local Food Safety Issues

Kenya faces chronic aflatoxin contamination in grain-based foods(including pet food).
Loop’s grain-free formulations eliminate this risk.

c) Import-Heavy Market

East Africa imported 40,000+ MT of pet food in 2022.Local manufacturing is almost non-existent, creating cost, supply, and accessibility gaps.

Loop is building a food brand and a local manufacturing capability, alternative protein infrastructure, and a circular economy supply chain.

3. Product & Model

Product Lines

• Adult dog kibble

• Puppy kibble

• Functional treats

• Supplement “super shakers” for dogs, cats, and small animals

All products are:

• Sustainable

• Hypoallergenic

• Nutritionally compliant with global standards

• Made from locally sourced ingredients

Business Model

1. In-House Brand Sales – primary revenue

2. Manufacturing-as-a-Service (MaaS) – future private-label manufacturing for other brands

3. E-commerce & Subscriptions – launching Loop Club (2025)

4. Regional Export – Kenya → Rwanda → East Africa → two more African countries by 2026

Unit Economics

• Current ASP: $4.00/kg (up 24% from $3.25)

• Target Net Margin: 35%

• Production Scale:

  • 3MT/month (2024)

  • 10MT/month (2025)

  • 31MT/month (2026)

4. Market Landscape

Market Sizing

• Global Pet Food Market: $137B

• Insect-based Pet Food Market: $17B

• East African Market: $600M

• Kenya Market: $65M

Loop aims to capture 1% of East Africa within 5 years → $6M annual revenue trajectory.

Competitive Positioning

• East Africa: No other insect-based manufacturer exists.

• South Africa: Some competitors (Pawmeal) but not sustainability-oriented.

• Global: Wild Earth (USA) is the benchmark but operates at premium Western price points.

Loop’s moat = first-mover + regulatory compliance + local sourcing + sustainability brand + manufacturing capability.

5. Traction

Loop has validated both demand and capacity:

• >9MT sold in first year

• 100+ monthly repeat customers

• 28% month-on-month revenue growth

• Sold-out production cycles

• Early export traction in Rwanda

• Partnerships with Kenya’s leading retailers and vet clinics

This is rare traction for an early-stage African consumer manufacturing startup.

6. Risks & Challenges

• Import brands dominate Kenya’s premium market

• Factory scale-up requires disciplined execution an a large investment

• Consumer education gap around insect-protein

• Currency fluctuations impacting raw material costs

• Competition from global players if they localize

Execution and brand-building will determine defensibility.

7. Why Loop

Loop sits at the confluence of climate, agriculture, manufacturing, and consumer trends , one of the intersection defining the next generation of African productive ventures.

Impact Layers

1. Environmental: 20x lower CO₂ footprint.

2. Agricultural: Stable demand for smallholder farmer inputs.

3. Industrial: Local production replacing imports.

4. Economic: Jobs in manufacturing, distribution, and supply.

They also explicitly support the Mensarius Oath through sustainable practices and ethical scaling.

8. Use of Funds

Total Raise: $500,000
Allocation:

• $300K: Factory upgrade (60MT capacity, new machinery)

• $135K: Team + Sales + Marketing + Packaging + Retail distribution credit

• $65K: Innovation + expansion to two new countries

This unlocks the shift from startup → scalable manufacturing venture.

9. Investment Case

Top 3 Reasons to Invest

1. Disruptive, first-mover advantage in a growing niche

They are the first in East Africa executing insect-based pet nutrition with global-standard manufacturing.

2. Strong traction for pre-seed stage

Consistent sales, early exports, strong repeat customer base.

3. Deep founder–market fit

Founders Insect farming and pet nutrition experience + operational scale experience = rare combination.

The Bet

Loop succeeds if:

• Consumers continue adopting sustainable pet food

• Factory scale-up executes smoothly

• Regional expansion remains cost-efficient

• Regulatory environment supports insect-based proteins

• They attract future rounds for multi-market scale

10. Conviction Score

Here is a distilled view of how Loop Pet Food performed across the core dimensions of the evaluation framework:

• Founder Strength — 4.0 / 5
  The team shows strong founder–market fit, combining deep experience in insect farming, pet nutrition, and operations. Their complementary backgrounds and clarity of execution raise confidence in their ability to navigate a complex manufacturing and consumer market.

• Product Quality — 5.0 / 5
  Loop’s product is the strongest part of the venture: sustainable, FEDIAF-compliant, nutritionally differentiated, and uniquely positioned as East Africa’s only insect-based pet food brand. The product already resonates with an emerging class of conscious pet owners.

• Traction — 4.0 / 5
  Early traction is impressive for a pre-seed company: consistent repeat customers, month-on-month growth, early exports, and rapid sell-through of production cycles. This indicates validated demand, not just curiosity.

• Market Potential — 3.5 / 5
  The pet food market in Africa is growing steadily, with sustainability and alternative proteins emerging as global mega-trends. East Africa remains underserved from a manufacturing standpoint, leaving meaningful room for Loop to define and dominate a new category.

• Competition Intensity — 3.0 / 5
  While global brands exist, the local competitive landscape is relatively weak in sustainable, science-driven pet food. However, the risk remains that global players could enter aggressively or local producers could scale faster. Hence a lower score.

• Thesis Alignment — 5.0 / 5
  Loop aligns perfectly with my personal sourcing thesis : agritech, climate-aligned ventures, local manufacturing, value chains, and sustainability. It fits as both a consumer brand and a climate-positive play thus my personal conviction of its future

• Venture Scale — 2.5 / 5
  The venture shows high promise but still carries operational and scaling complexity manufacturing-based startups require capital, logistics, and expansion discipline. Scale is possible but will be challenging and incremental.

• Societal Impact — 5.0 / 5
  Loop operates with strong environmental, agricultural, and economic impact supporting farmers, reducing emissions, and replacing imports with local production. The impact upside is significant and clearly embedded in the model.

• Overall Conviction Score: 3.9 / 5
  A high-potential early-stage venture aligned with climate, sustainability, and African manufacturing with room to grow into a category-defining company if execution remains consistent, investment is consistent and expansion is well-managed.

Conclusion

Loop Pet Food represents the kind of early venture that captures the energy of African innovation today: resourceful, climate-conscious, manufacturing-led, and globally relevant.A reminder that some of the most transformative startups on the continent won’t always be software they will be the companies rebuilding production, supply chains, and value addition from the ground up.

For a continent with rising urban pet ownership, fragile food systems, and increasing demand for sustainable consumption, Loop signals where the next decade of African ventures is heading: locally made, globally aligned, environmentally resilient.

It is not just pet food; it is early infrastructure for the alternative protein economy in Africa and a nod in the potential Africa holds in food production and scaling in manufacturing.

Share

After reviewing Loop Pet Food’s pitch deck and grounding the venture in its core model, the next step was to examine the broader landscape it operates in. This memo explores the startup’s competitive position and market potential, how Loop compares to existing players, where the opportunities lie, and how large the addressable market is. The goal is to contextualize the venture within its ecosystem and assess the scale of the opportunity ahead.

Startup Profile

Name: Loop Pet Food
HQ: Nairobi, Kenya
Founded: 2023
Funding Raised: ~$250,000 (pre-seed; pilot production stage)
Website: https://looppetfood.com

Founder: Laura Stanford &

Offering: Sustainable, plant-based, gluten-free dog food made with locally sourced ingredients. The company strengthens African value chains by partnering with smallholder farmers while responding to rising demand for eco-conscious pet nutrition.

Competitive Landscape

A) Key Competitors

1. PetSasa (Kenya)

• Founded: 2019

• Funding: Bootstrapped (undisclosed)

• Website: https://petsasa.co.ke

• Model: Retailer and distributor of imported pet food and accessories.

• Relevance: Controls distribution and consumer access but does not manufacture pet food. Represents competition in shelf presence and customer mindshare, not product creation.

2. Pawmeal (South Africa)

• Founded: 2020

• Funding: ~$500k seed

• Website: https://pawmeal.com

• Model: Locally made dry dog food using poultry and grain inputs.

• Relevance: Competes on price and accessibility. Shows stronger production maturity than most East African players but lacks sustainability differentiation.

3. Wild Earth (USA – Benchmark Competitor)

• Founded: 2017

• Funding: ~$34M

• Website: https://wildearth.com

• Model: Premium, plant-based, high-protein dog food brand built for climate-conscious consumers.

• Relevance: An international benchmark for Loop’s concept. Not a direct local competitor, but useful for understanding brand aspiration, product standards, and long-term strategic pathways.

  ---

  3. Comparative Analysis

  Market Positioning

  Loop Pet Food is currently the only player manufacturing sustainable, plant-based pet food in East Africa.
  Compared to competitors:

  • Versus PetSasa:
    Loop manufactures locally with price control and ingredient clarity PetSasa sells imported brands susceptible to forex volatility and supply chain delays.

  • Versus Pawmeal:
    Pawmeal competes on affordability, but Loop differentiates through product positioning plant-based formulas, gluten-free options, and sustainability as a core value proposition.

  • Versus Wild Earth:
    Overlaps in sustainability and plant protein. Loop adapts the model to emerging markets with affordability, local sourcing, and farmer impact as competitive edges.

  Traction

  Loop has demonstrated early market fit and operational discipline:

  • ~3 tonnes of test production achieved despite limited machinery

  • Strong repeat purchase indicators in early customer cohorts

  • Evidence that local consumers are receptive to sustainable pet nutrition

  • Supply-side stability through farmer partnerships

  Competitive Risks

  • Import dominance: Western and Chinese brands remain aspirational for middle-class pet owners. Distributors like PetMania do absorb significant consumer preference.

  • Regional scale pressure: South African players with stronger manufacturing ecosystems and developed markets (like Pawmeal) could expand northward and compete on price.

  • Potential international entry: If brands like Wild Earth localize production or distribution in Africa, Loop could face premium-brand pressure.

  Competitive Advantages

  • First mover advantage in sustainable pet food manufacturing in Africa. Loop is the first sustainable protein pet food manufacturer in Africa.

  • Local sourcing and production, lowering costs, increasing margins, and supporting regional agriculture.

  • Alignment with global megatrends: sustainability, pet wellness, circularity, climate-conscious consumption.

  • Exportability: Ability to sell into regional markets and possibly to diaspora-rich regions with demand for ethical, African-made brands.

  • The Founder is an expert insect farmer who understands the breeding and insect keeping sector well making her a standout personality in making sure the compnay succeeds

Market Sizing

Definitions

• TAM (Total Addressable Market):
  Global demand for plant-based/sustainable pet food if the company captured 100% of the market.

• SAM (Serviceable Available Market):
  The portion of TAM that Loop can realistically target based on geography and consumer profile.

• SOM (Serviceable Obtainable Market):
  The share of SAM Loop can capture within 3–5 years.

A) Total Addressable Market (TAM)

Global Pet Food Market (2024): ~$150B
Projected 2028: ~$180B
(Sources: Statista, Grand View Research)

Plant-based/sustainable pet food is ~10% of the global market and growing at ~12% CAGR.
TAM = ~$18 Billion

B) Serviceable Available Market (SAM) — Africa

• Africa pet food market (2025): ~$1.6B (Mordor Intelligence)

• Kenya represents 8–10% of Africa’s pet economy.

• East Africa’s addressable urban segment (middle-income households adopting packaged pet food) approximates:

SAM = ~$160 Million

C) Serviceable Obtainable Market (SOM) — Kenya + Early Export Markets

Assumptions:

• 1% penetration of SAM over 5 years

• Markets: Kenya, Uganda, Tanzania, Rwanda

• Loop scales from 3 tonnes/year to 30+ tonnes/year

SOM = ~$1.6 Million in annual revenue within 5 years

This is consistent with Loop’s early production trajectory, pricing structure, and regional expansion pace.

Market Outlook & Investment Interpretation

Africa’s pet ownership is growing, particularly among young, urban households shifting toward healthier and sustainable consumption. This expands the potential for locally manufactured pet food brands that differentiate on quality, affordability, and climate impact.

Loop’s model is well-positioned because it:

• Offers locally tailored formulations

• Competes with imports on price and supply stability

• Aligns with climate and sustainability trends

• Builds local agriculture value chains

• Holds export potential into both regional markets and global eco-conscious categories

While the current SOM may appear modest, the long-term upside, especially through manufacturing leverage and insect/alternative protein innovation positions Loop as an attractive seed-stage opportunity.

The Venture

Founded: 2023
Headquarters: Nairobi, Kenya
Model: Sustainable, insect-protein pet food + manufacturing-as-a-service
Stage: Early commercial (first factory, 9MT sold in 2023, new factory underway)
Funding Ask: $500,000 SAFE (valuation cap $2.5M pre-money)

Loop is solving two challenges:

1. Africa’s heavy reliance on imported pet food → high prices, long supply chains, and limited local nutrition standards.

2. The climate cost of traditional meat-based pet diets → 20% of global meat consumption can be traced to pets.

By replacing meat with insect protein and building local formulation capacity, Loop is crafting a climate-aligned, affordable, regionally rooted alternative.

Core Problem & Market Insight

The pitch highlights a compelling global problem:
Pets consume ~20% of all meat, contributing to an estimated 64 million tons of CO₂ annually while on the other hand Insect-based protein,their solution offers a 20x lower carbon footprint.

On the African side, the opportunity is amplified by:

• 40,000+ MT of pet food imported into the EAC in 2022

• A $600M East African market, growing ~7–9% CAGR

• Rising urban pet ownership among middle-income households

Loop enters as a first mover, blending global sustainability trends with local manufacturing advantages

Business Model & Product Architecture

Loop operates two complementary business units:

A. In-House Pet Food Brand (LOOP)

• Insect-based protein

• Whole foods sourced from smallholder farmers

• Grain-free (no aflatoxin risk)

• Dry kibble formulation

• Sustainable packaging

Traction (2023):

• >9MT of product sold

• >100 monthly repeat customers

• 28% MoM revenue growth

• 24% increase in average selling price

• Retail presence + direct-to-consumer channels

B. Manufacturing-as-a-Service (MaaS)

A quiet and strategically powerful second vertical. Loop is building Kenya’s first pet food private-label kitchen, enabling:

• Contract manufacturing for regional brands

• White-label formulations

• Faster market entry for emerging pet food ventures

This secondary engine could grow into the company’s scale accelerant parallel to how manufacturers in F&B built dominant regional footprints.

Leave a comment

Operational Roadmap

Loop’s three-year horizon is execution-focused:

2024 — Foundation

• New factory scaling to 60MT capacity

• 3MT per month in sales

• Launch cat food line + subscription model

• First MaaS contract

• Regional expansion within East Africa

2025 — EBITDA Positive

• 10MT/month in sales

• Entry into first market outside East Africa

• Expanded MaaS operations

2026 — Global Player Trajectory

• 31MT/month in sales

• Second international market

• Stronger export play into sustainable markets

The underlying assumptions : local production + sustainability advantage + operational expertise = defensible, scalable economics.

If everything does at least 60% to the plan, Loop Pet food ceiling is high.

Venture Stands Out

A. Validated early traction

They’ve already demonstrated production capability, retail acceptance, and repeat purchase behaviour which are all critical for early consumer brands.

B. Alignment with megatrends

Loop sits at the intersection of:

• Climate tech

• Sustainable protein

• Local value chains

• Pet wellness

• Circular economies (waste → protein → product)

This aligns tightly with the current trends and the investment timelines something that can work to their advantage.

C. Dual-Engine Model

Brand + Manufacturing is a play that could de-risk revenue while building ecosystem lock-in.

D. A strong, experienced founding team

15+ years of scaling businesses, 5+ years working with insects in East Africa, and clear operational experience in nutrition and manufacturing. That experience is rare in early-stage CPG/Agritech ventures.

6. Why Loop Emerged as the Top Pick.

Loop checked nearly every major Venture category I prioritized during the fellowship an my deal sourcing system:

• Clear problem → import dependence, climate cost

• Execution evidence → real production, real customers

• Scalable model → factory expansion + contract manufacturing

• Regional expansion logic → Kenya → EAC → global niche markets

• Impact depth → environmental + farmer income + local supply chains

Most importantly, Loop had momentum, not just projections—a strong signal in early-stage consumer markets.

Conclusion

Loop Pet Food represents a new wave of African consumer ventures.It combines climate intelligence, local manufacturing, and global standards. A model that from data and prediction works best for the African ecosystem which faces fundraising difficulties for ventures that dont align with global trends or lie at the intersection of several major sectors.

The pitch deck reveals a company not simply selling dog food, but engineering a category shift in an industry long dominated by imports and heavy carbon footprints.

For an early-stage venture in a rising niche, they are unusually clear about:

• the problem they are solving,

• the biology and economics behind their solution,

• and the operational steps needed to scale responsibly.

In many ways, Loop sits at the intersection of the future of food, circular production, and Africa’s manufacturing ambition a signal of what the continent’s next generation of consumer climate ventures might look like.

Share The Builders' Memo

In a market where consumer brands often struggle to differentiate, the Kenya based Loop Pet Food has carved out a clear, future-facing position: sustainably produced, insect-based pet nutrition made locally and built for global standards.

During the Fellowship, Loop emerged as one of the most compelling early-stage startups I evaluated not just because of its traction, but because the startup sits at the intersection of several long-term trends shaping African venture: climate resilience, sustainable protein, circular economy models, and localized manufacturing.

This memo captures why Loop became a top pick through the lens of innovation, scalability, and thesis alignment.

Why Loop Pet Food Advantage

A) Validated Traction & Production Capability

Loop has progressed past the “idea risk” and “manufacturing risk” phases.
They have:

• Successfully expanded production capacity

• Demonstrated the ability to move from pilot batches to steady, scalable output

• Proven operational consistency, a rare milestone for early consumer hardware/production ventures

This signals early traction and shows the kind of discipline and technical execution that gives an investor confidence in long-term scale.

B) Alignment with Emerging Global & Local Trends

Loop sits directly within the convergence of several high-growth trends:

• Sustainability & climate-conscious consumption

• Insect protein as a viable, low-emission alternative

• Reduced dependence on costly imported pet food inputs

• Circular economy models using waste-to-protein loops

These macro trends align precisely with my sourcing thesis, especially around:

• Agritech

• Climate Tech

• Local Value Chains & Manufacturing

Loop doesn’t just fit the thesis, it strengthens it.

C) A Scalable, Export-Ready Business Model

Local production of insect-based protein gives Loop:

• Cost advantages over imported conventional protein

• Supply-side stability in a volatile global feed market

• Pricing flexibility compared to multinational brands

Geographic expansion has already begun, with market entry into Rwanda and ambitions stretching as far as South America.

Such early signals of cross-border scalability suggest a product with global relevance, not just local fit.

D) Dual Impact Potential that Reinforces Long-Term Value

It operates at the intersection of:

• Environmental impact

  • Lower emissions protein

  • Waste reduction

  • Resource-efficient production

• Socio-economic impact

  • Supporting local insect farmers and suppliers

  • Building Kenya’s alternative protein ecosystem

  • Lowering import dependency and strengthening local industry

This blend of commercial upside + environmental sustainability enhances its defensibility and long-term relevance ,a combination that is becoming increasingly important in Africa’s next wave of venture-backed businesses.

Why It Became My Top Selection

Loop was my top pick because it demonstrated a rare mix of:

• Thesis alignment

• Operational maturity

• Sustainability-first innovation

• Resilient economics

• Regional and global potential

In many early-stage ecosystems, the most valuable startups are those that solve deep structural problems while participating in global trendlines. Loop sits exactly at that intersection.

It is a business built on fundamentals cost advantages, local production, vertical integration while also capturing a broader climate narrative shaping the future of food and pet nutrition.

Conclusion

Innovation in Africa often comes from necessity, but the best companies extend that necessity into advantage. Loop does exactly that, it transforms local constraints from protein scarcity to high import costs into a scalable model with environmental and economic upside.

As the world moves deeper into climate-conscious consumption and local value creation, startups like Loop provide a glimpse of what Africa’s next industrial wave could look like: sustainable, exportable, and rooted in smart production.

Introduction

Twiga food is a Kenyan retail Agtech startup. One of the biggest and most successful startups in Kenya. Its journey continues to evolve and for builders, operators, and investors, it remains a reference point on building startups on the continent and what it takes to digitize and modernize Africa’s food systems. I picked it as a startup of interest during one of the assignments due to its location,sector and the fact that it has faced the ups and downs of the African Market in terms of infrastructure development.

Overview

Twiga food is an agtech startup set out to solve a structural market failure: fragmented agricultural supply chains that inflate food prices and limit farmer income. By building a digital marketplace supported by its own logistics, warehousing, and distribution rails, Twiga has simplified access to consistent, high-quality stock for thousands of small vendors.

Startup Name: Twiga Foods
Sector: Agriculture & Retail (AgriTech)
Description: A tech-driven retail platform that links farmers, vendors, and customers, delivering high-quality produce and products through a streamlined marketplace.
Website: https://www.twiga.com/
Founding Date: November 2014
Founders: Grant Brooke, Peter Njonjo
Headquarters: Tatu City, Nairobi, Kenya

Funding History

Twiga has raised over $110M across equity, debt, and strategic funding with at least 25 investors and 12 lead investors, one of the largest capital stacks in African AgriTech. Below is a consolidated timeline.

Early capital included a Series A of $10.3 million in mid 2017 and grant support from GSMA and USAID. The landmark Series B, 2019 brought in $30 million (with a mix of equity and debt), enabling expansion and stronger supply chain integration.

In 2020 and 2023, Twiga secured substantial debt financing, stepping up working capital and operational resilience. The $50 million Series C in November 2021, led by Creadev and key investors, underscored Twiga’s scaling ambition.

Pre -Seed Round – November 2014

• Amount: $75,000

• Investors: 500 Startups

• Purpose: Initial capital to pilot their B2B food distribution platform in Kenya.

• Traction at the Time: Early-stage connecting farmers and vendors; operations mainly in Nairobi.

Seed (Convertible Notes) - 2016

• Amount : $ 1 Million

• Investors: 1776 Ventures, WAMDA Capital

• Traction : Enabled early operations and platform building

Series A – July 2017

• Amount: $10.3M

• Investors: Wamda Capital, DOB Equity, Omidyar Network, AlphaMundi, Blue Haven Initiative, and others.

• Purpose: Expand logistics and distribution network, invest in technology to streamline operations.

• Traction at the Time: Over 2,000 vendors and 13,000 farmers connected on the platform.

Debt Financing – November 2018

• Amount: $10M

• Investors: Overseas Private Investment Corporation (OPIC), AlphaMundi Group.

• Purpose: Scale operations across Kenya, improve supply chain infrastructure.

• Traction at the Time: Expanded reach to more towns; increased vendor base to over 10,000.

Series B – October 2019

• Amount: $30M

• Investors: Goldman Sachs, IFC, TLcom Capital, Creadev, DOB Equity.

• Purpose: Grow into new product lines beyond fresh produce, strengthen tech platform, expand to more African countries.

• Traction at the Time: Handling ~180 tons of produce daily, servicing thousands of vendors.

Debt Financing – January 2021

• Amount: $5M

• Investors: OPIC (DFC).

• Purpose: Boost working capital for scaling operations during COVID-19 period.

• Traction at the Time: Sustained operations despite pandemic disruptions.

Series C ( November 2021)

• Amount: $50M

• Investors: Creadev, TLcom Capital, IFC, OPIC, Goldman Sachs, Juven, DOB Equity.

• Purpose: Geographic expansion into Uganda and other East African countries; diversification into FMCG distribution.

• Traction at the Time: Serving over 50,000 vendors with a broader product range including packaged goods.

Challenges Faced by Twiga Foods

Even with strong capital backing, Twiga’s journey underscores the realities of scaling operationally intensive ventures in emerging markets.

• A KES 40M debt claim from Incentro Africa, a cloud solutions provider highlighted internal operational inefficiencies and strained liquidity.
  Link : https://www.dabafinance.com/en/news/twiga-foods-secures-new-funding-to-settle-suppliers

• Multiple rounds of layoffs were carried out to reduce burn and recalibrate operations during the continent-wide funding slowdown.
  Link: https://kenyanwallstreet.com/twiga-foods-lays-off-59-employees-in-fresh-restructuring-move/

• Suspended operations in Nairobi to focus on relocating to a more cost-effective and strategically positioned facility, aimed at improving distribution efficiency within the city and surrounding areas.

Link: https://techcabal.com/2025/06/06/twiga-foods-halts-nairobi-operations/

Conclusion

Twiga remains one of Africa’s most studied AgriTech case studies because it illustrates:

• The potential of solving hard supply chain problems at scale.

• The complexity of building asset-heavy operations in low-margin markets.

• The discipline required when navigating capital cycles in Africa’s tech ecosystem.

• The lesson that strong fundraising does not automatically translate into sustainable unit economics.

After dozens of drafts, explorations, experiments, and thesis exercises ranging from the Savannah Fund–inspired long-form analysis to the early playful versions it became clear that at some point the work had to converge. A fund cannot be everything. A first fund especially must be sharp, narrow, and executable.

This memo captures the moment where all the variations collapse into a single, precise thesis.

The goal was simple:

• Pick a realistic fund size fit for a first-time GP in Africa.

• Choose sectors that match skill, network, and investor appetite.

• Anchor the fund where it can actually be raised and deployed.

• Design a thesis that can produce repeatable returns in 8–12 years.

• Leverage TFC Network’s existing community as a competitive advantage.

These questions and more guided the final shaping of the thesis:

• What fund size is actually raiseable and sustainable in Africa?

• Which sectors of interest are most fundable for a first fund?

• Which personal and team skills can be leveraged credibly in Fund I?

• What founding team composition increases GP-LP trust?

• How does the existing TFC Network translate into sourcing, diligence, and support?

By answering these, the abstract thesis turned concrete.
Below is the final form.

TFC Network Fund I

Size: $4.6M Fund I
HQ: Nairobi, Kenya
Focus: Sub-Saharan Africa
Stage: Pre-Seed & Seed
Check Size: $50k–$250k
Model: Community-powered investing + sector specialization

TFC Network is launching a $4.6MM early-stage fund in Nairobi to invest in digital infrastructure and agtech startups across Sub-Saharan Africa.

The thesis leverages:

• the GP’s 10-country pan-African network,

• a community of 200+ industry operators, founders, and ecosystem leaders,

• and deep engineering and venture-building experience,
  to identify, support, and scale the region’s next generation of foundational technology companies.

Our edge comes from two pillars:

1. Infrastructure & Agtech as Africa’s unavoidable investment frontier

These sectors have the strongest combination of:

• proven investor appetite,

• rising demand curves,

• government alignment,

• clear pathways to revenue,

• and the ability to generate meaningful returns even in early-stage African markets.

They are also sectors where the GP has genuine knowledge, research depth, and long-term conviction—not thesis theatre.

2. A pre-existing, high-trust community engine

TFC Network is not starting from zero.
It is built on:

• a network of high-value Africans,

• young operators and founders,

• existing deal flow across multiple hubs,

• and a track record of helping early-stage teams raise over $50M+ in follow-on capital.

This community advantage becomes the sourcing engine, diligence filter, talent pool, and cross-country expansion network for portfolio companies.

Investment Focus

Geography

• Kenya (primary base)

• Rwanda, Ghana, Nigeria, South Africa

• Opportunistic deals across East & West Africa

Sectors

Carefully narrowed to those most credible for Fund I:

1. Digital Infrastructure

• Connectivity

• Logistics enablement

• Cloud and compute

• B2B SaaS for Africa’s backbone industries

• Manufacturing enablement tools

2. Agtech & Climate-Aligned Food Systems

• Input and production systems

• Supply chain and cold chain solutions

• Sustainable protein & alternative feed

• Farmer productivity platforms

These are markets with structural demand, visible value chains, and long-term strategic importance.

Why a $4.6M Fund?

Because it is:

• raiseable for a first-time African GP,

• large enough to build a 20–25 company portfolio,

• small enough to deliver meaningful DPI early,

• aligned with realistic check sizes and Africa’s capital absorption dynamics.

With $50k–$250k checks, the fund can lead or co-lead pre-seed rounds, support seed rounds, and reserve follow-on capital for the top-performing 20–30% of the portfolio.

Team Rationale

A first fund is only as strong as its founding partners.
The ideal team composition for TFC Network Fund I mirrors the thesis itself:

• A GP with engineering depth, venture research experience, and pan-African network strength

• Operators with infrastructure or manufacturing expertise

• Community builders connected to founders across the continent

• Advisors with LP access and technical backgrounds

This combination signals credibility, domain depth, and the ability to source and support high-quality founders.

Conclusion

After cycles of drafting, experimenting, and rethinking, the thesis finally resolves into a simple, investable story:

A community-first African fund backing digital infrastructure and agtech founders with deep conviction and a focused strategy, powered by a $4.6M early-stage vehicle in Nairobi.

This is TFC Network Fund I—precise, fundable, and built for execution.

Before arriving at a clear investment thesis, I spent time studying a range of old fund original theses across the globe. Savannah Fund’s remains one of the most transparent and instructive investment blueprints published by an African VC fund. Their model built for the early 2010s has clarity on why they invest, who they back, and how they approach African entrepreneurship providing a useful framework for understanding the African investment ecosystem.

I took inspiration from that openness to do a thesis that represents a new kind of fund structure for a new era,shaped by community, by people, and by the belief that Africa’s future will be built by tight, value-aligned networks of high-intent, high-agency individuals. This memo outlines the thesis behind the hypothetical TFC Network Fund.

The fund is therefore built on that foundation to invest in high value founders and entrepreneurs across Africa to build a cycle of high value people in the community at the forefront of the development of the African continent in this era where we will be having the largest population in the world.

Subscribe now

TFC Network Investment Thesis

Vision

TFC Network exists to back the next generation of high-value African founders—builders who will define the continent’s technological, economic, and cultural trajectory. Africa is on course to become the world’s most populous region by 2050. This demographic transition demands the creation of new industries, modern infrastructure, and ambitious entrepreneurial ecosystems.

Our long-term vision is to build a cycle of high-value people across the continent:
a community of founders, operators, and creators shaping Africa’s development in the 21st century.Investment Focus

• Stage: Early Stage (Pre-Seed and Seed)

• Type of Entrepreneurs: Ambitious, mission-driven, technically grounded, community-aligned entrepreneurs

• Regions: Sub-Saharan Africa (Rwanda, Ghana, South Africa, Nigeria,Kenya.)

• Sectors :

  • Tech infrastructure & enabling technologies

  • Manufacturing & local assembly

  • Agritech & climate-aligned food systems

  • Media & digital culture

  • Community-driven platforms that unlock participation at scale

  We focus on ventures that strengthen Africa’s foundational rails digital, physical, and cultural.

  ---

Investment Criteria

We invest in:

• Visionary founders with deep conviction and long-term orientation

• Mission-driven teams committed to solving real, structural African challenges

• Technically capable entrepreneurs who understand the value of rapid iteration and learning

• Builders with strong community instincts, not just business instincts

We look for individuals with the ambition to shape Africa’s next wave of technological and economic progress.

Core Values

• Community-Centric: TFC Network began as a curated community of high-value Africans; the fund is built on that same foundation. We believe the most resilient companies emerge from strong ecosystems not isolated founders.

• Technological Growth: The next decade in Africa belongs to companies that build infrastructure, not just interfaces. We invest in ventures that enhance the continent’s technical capabilities and operational sophistication.

• People and Teams: Our focus is on investing in strong, mission-driven founders (teams )with a relentless drive to achieve their goals.

• Long-Term Impact Through Profit : We view entrepreneurship as a route to economic transformation. Strong companies create jobs, skills, and long-term development and opportunity.

What We Offer

• Funding: Up to $50,000 in funding

• Community: Access to a network of founders, operators, technologists, and community members across Africa and the diaspora.

• Events: Regular events hosted by TFC Network to connect key ecosystem stakeholders

• Market Access:A cross-regional network enabling early expansion into East, West, and Southern Africa.

• Professional Services: Assistance with hiring, team setup, and ongoing support for top leaders

• Long-term Planning: Mentorship, partner networks, and strategic planning for multi-year growth.

Strategic Approach

TFC Network takes a community-to-capital model: we build the network first, invest second, and support continuously.

By 2050, Africa will have the world’s largest youth population which necessitates

• The demand for jobs, skills, and infrastructure to vastly outpace what governments alone can provide.

• Entrepreneurship becomes a structural solution creating employment, accelerating innovation, and building productive capacity.

We believe the entrepreneurial ecosystem requires three key elements to thrive:

1. Skillset and Knowledge: Empowering entrepreneurs with the necessary skills and knowledge.

2. Entrepreneurs: Supporting ambitious and passionate founders and their teams.

3. Capital: Providing the funding needed to turn dreams into reality.

Team Composition

The TFC Network team is designed as a collective of:

• experienced founders,

• operators with sector expertise,

• young emerging talent,

• and community leaders from across Africa.

This creates a multi-layered support system for founders ; technical, operational, and strategic.

The fund’s value is as much people-powered as it is capital-powered.

Share

At TFC Network, we believe the world is shaped by rebels—people who dream boldly, act decisively, and build relentlessly. Africa’s next chapter will be written by founders who combine courage, technical depth, community, and ambition.

Our thesis is simple:
invest early, build community, back high-value founders, and support them for the long run.

This is the foundation of TFC Network’s investment identity.

Over the past months, I refined my personal sourcing system and sourced a total of 15 deals across different sectors and regions What follows is a curated list of the top 6 ventures sourced during this period.
Each startup aligns, in different ways, with the themes shaping my thesis: infrastructure, agritech, manufacturing, climate resilience, and community-centered digital ecosystems.

Subscribe now

This is not an investment recommendation list, it’s a record of deal flow, analysis, and the ventures that stood out while sharpening my sourcing instincts.

1. Build Africa

Website: www.buildafrica.store
Sector: Infrastructure & Logistics
Location: West Africa (Nigeria & Ghana)
Stage: Pre-seed
Founder: Tayo Odunsi
Pitch Deck: Secured

Description:
Build Africa sits at the intersection of infrastructure development and logistics, one of Africa’s biggest bottlenecks and biggest opportunities.
The company’s vision is deliberate: beginning with construction materials and logistics to support ongoing infrastructural projects, then expanding over time toward full-scale development including data centres, industrial facilities, and real estate infrastructure.

With nearly a decade of experience in finance and M&A, Tayo brings both credibility and clarity to a model that demands operational rigor. Build Africa is one of the strongest fits for my thesis: infrastructure, local value chains, and long-term development.

2. Loop Pet Food

Website: https://looppetfood.com
Sector: Agritech & Sustainability
Location: Kenya
Stage: Seed
Founder: Laura Stanford
Pitch Deck: Secured

Description:
Loop Pet Food is one of the most compelling sustainability-aligned consumer brands emerging from East Africa. The company produces plant-based, insect-protein dog food using locally sourced agricultural waste streams reducing environmental impact while strengthening farmer supply chains.

Their early traction is validated: scaling from small-batch production to tonnes of output, testing demand, and showing repeat buyers. The venture sits precisely at the intersection of agritech, climate solutions, alternative proteins, and local manufacturing, making it a standout top pick in the pipeline.

3. X-VSN ILLUMINATE

Website: https://x-vsn.com
Sector: Deep Tech / Software
Location: South Africa
Stage: Seed
Founder: Janet Sawari
Pitch Deck: Secured

Description:
X-VSN is building advanced computer-vision and perception technologies designed for African realities; from mobility and safety to industrial monitoring and smart-city use cases. Their focus on locally relevant datasets, context-aware AI models, and enterprise integrations gives them a defensible edge.The venture represents the early wave of deep-tech ambitions emerging on the continent, where domain expertise, data advantage, and niche infrastructure gaps converge.

4. AIfluence

Website: https://www.ai-fluence.com
Sector: Influencer Marketing / AI
Location: Pan-Africa
Stage: Seed (raising $750K)

Description:
AIfluence is an AI-powered influencer marketing platform operating across multiple African markets, enabling brands to run structured, data-driven campaigns. With a team of 11–50 and operations since 2019, the company has proven its ability to onboard major global clients and scale execution across markets.

Their model sits at the intersection of consumer behavior, brand analytics, and tech-enabled marketing, offering clear scalability as advertising budgets move toward measurable, AI-driven tools.

5. Usiku Games (Part of Pan-African Gaming Group)

Usiku Games Website: https://usiku.games

Pan African Gaming Group ( PAGG) : https://pagg.group
Sector: Gaming / Creative Tech
Location: Kenya + Pan-African Collective
Stage: Seed (raising ~$3M)

Description:
Usiku Games is one of the pioneering African game studios focused on building culturally grounded mobile and PC games while actively contributing to the Pan-African Gaming Group a continental network of studios collaborating on talent, IP, and distribution.

With a mission to build African stories and gaming ecosystems, the company blends creativity, tech, and community access. Their dual role both a creator of original titles and a collaborator in a continental developer network gives them long-term ecosystem leverage.

The downside is this sector rarely gets funding and support putting it at a disadvantage but its a company to watch

6. E-Moti Mobility

Website: https://e-moti.co.ke
Sector: Electric Mobility / Climate Tech
Location: Kenya
Stage: Early Stage
Pitch Deck: Secured

Description:
E-Moti is a Kenyan e-mobility startup building electric motorcycles and charging solutions tailored for African transport realities. Their model integrates hardware, battery-swap infrastructure, and cost-efficient mobility services aimed at lowering operational costs for riders while reducing emissions.

E-Moti’s approach aligns with major continental megatrends: climate-friendly mobility, electrification, and sustainable transport systems.
The startup reflects the growing wave of climate-tech ventures designing infrastructure-first solutions for everyday mobility.

Share The Builders' Memo

Conclusion

Every venture in this pipeline (including the ones left out) reveal clear patterns shaping early-stage innovation in Africa. This includes:

1. Infrastructure is re-emerging as a dominant theme from logistics and mobility to digital systems and supply chains.
2. Sustainability is no longer niche it’s embedded in agritech, manufacturing, mobility, and consumer products.
3. Community and culture are becoming economic engines gaming, digital influence, and local value creation.

Among the ventures sourced, Build Africa and Loop Pet Food rose to the top because they solve foundational, structural problems while demonstrating early execution strength.

Each startup captures a different slice of Africa’s evolving entrepreneurial landscape a landscape defined by ambition, scarcity-inspired innovation, and long-term builders.

Leave a comment

This pipeline marks the early stage of a sourcing discipline still being shaped, sharpened, and expanded. More will evolve as I continue scouting, speaking to founders, and anchoring the thesis in real market dynamics. It is a snapshot of the journey so far reflecting the intersection of learning, conviction, and builder-driven perspective, the core of The Builder’s Memo.

One of the core tasks during the Fellowship was to develop a complete VC fund thesis for a hypothetical fund, covering everything from the venture model to accounting, back-office structure, and deal pipeline design.

Before settling on a clear investing identity for the venture fund assignment (TFC Network), I explored a range of ideas inspired by my personal interests and observations across African markets. These initial drafts were simply an exercise in understanding what a fund thesis should include,my articulate conviction, and how different lenses shape the role a fund plays.

They were not meant to be final or definitive. They were rough notes,the earliest attempts at mapping the terrain. Each draft approached the same question from a different angle:
ecosystem leverage, research-driven investing, and infrastructure-led development.

Much changed after these drafts. Even more was stripped away. But they capture the starting point of the journey.

Note: These are early sketches, not the final thesis.

Draft 1 — Ecosystem Leverage & Network-Based Advantage

TFC Network exists to convert Africa’s demographic potential into a functional innovation economy by backing early stage founders.

We focus on pre-seed and seed ventures building in tech infrastructure, advanced manufacturing, and community platforms. Beyond capital, our value comes through curated introductions, talent access, market-entry support, and ecosystem visibility.

We believe the most scalable African companies will emerge from tightly connected ecosystems places where venture capital amplifies momentum rather than simply writing checks.

This thesis centers on ecosystem leverage: sourcing opportunities through deep, trusted networks across accelerators, founder communities, hubs, and operator circles. Africa’s most scalable companies will emerge from tightly connected ecosystems places where venture capital amplifies momentum rather than merely writing checks.

Draft 2 — Storytelling, Research Discipline & Thought Leadership

TFC Network believes conviction is built. It emerges through research, storytelling, and continuous market intelligence.

Our target is early-stage African companies in infrastructure, manufacturing, and digital culture sectors where our research highlights material gaps and outsized opportunity. With a $25K–$50K check size, the fund aims to pair capital with ecosystem storytelling and network-driven sourcing, ensuring founders are visible, connected, and well-supported.

This draft positions the fund as a practitioner-publisher: testing assumptions, indepth research, and working closely with founders to sharpen how entrepreneurship evolves in Africa.The goal was ti ensure founders are visible, connected, and well-supported.

Draft 3 — Tech & Infrastructure as the Backbone of 21st-Century Africa

TFC Network backs the visionary, ambitious, and mission-driven young Africans building connectivity,agtech, logistics, and technology infrastructure that unlock economic participation for millions.

Through $25K–$50K early checks, we support ventures in digital rails, agritech infrastructure, last-mile logistics, and other foundational systems. Our edge lies in operational experience and deep access to ecosystem actors, giving founders guidance on regulation, cross-border expansion, and technical partnerships critical for scaling.

The third version imagined TFC Network as a long-term partner in building Africa’s digital and physical backbone. Its edge was operational depth and access: guiding founders through regulation, technical partnerships, and cross-border expansion key challenges for infrastructure-led startups.

Conclusion

Looking back at these drafts clear how early I was in the process. A lot of essential components were missing fund size, structure, investment geography, portfolio strategy, and sharper sector definitions.

Still, one thing stands out: even in these rough notes, certain themes appeared consistently. Logistics, manufacturing, agritech, digital infrastructure and the theme of community have always been areas of interest. The ideas were grounded in my conviction, background, skills, and long-term ambitions.

Share The Builders' Memo

These drafts weren’t perfect. They weren’t meant to be.
But they were an honest starting point ,and the first step toward a more refined, disciplined thesis…

Venture Capital investing is a game of discipline, visibility, and consistent motion searching and working with startups, the deals rarely “show up.” They are created through positioning, relationships, pattern recognition, and the quiet habits that compound over time.

Below is a draft operating system( personal preference) I’m refining as I continue to build my thesis and presence across the field. It is practical, structured, and designed to change and scale as I grow into more institutional investing

Subscribe now

Thesis Positioning

Where I invest
🎯 Stage: Early stage/ Pre-seed / Seed
🌍 *Region: Sub-Saharan Africa( Kenya, Ghana, Rwanda,South Africa)

• Europe( Germany, United Kingdom, Italy , Hungary)

🌱 Focus: AgriTech, Digital Infrastructure, Climate Tech ,Advanced Manufacturing & Community Impact Ventures
💸 Check Size: $10K–$50K

→My thesis as shared in the previous Memo 1-pager Thesis is an ever evolving approach to the investing.With an interest in engineering ,manufacturing and deep tech a global approach and curious mindset is used in special situations . A startup fitting any of the mentioned sectors, we will look into it.

A) Positioning & Targets

Founder Profile
Mission driven, execution focused teams solving urgent local problems with the potential to scale.

Selection Lens

• Solves a validated market pain point.

• The model can scale to $6M+ annual revenue within 5–7 years.

• The team shows strong execution capacity and resilience.

→Aligned with emerging markets demographic and climate megatrends.

Weekly Targets

• 5 outbound founder outreaches (email / LinkedIn)

• 3 warm intro requests (via connectors/ founders)

• 4 accelerator or incubator touchpoints

• 2 operator/angel coffee chats

• 2 Builder’s Memo posts per month(memos, Startup updates,innovation memos or callouts for founders)

Consistency, puts me in rooms where momentum lives, and builds a disciplined top-of-funnel.

B) Channels & Workflows

→Strongest deals often travel through people who know how others build.

1. Referrals (Core Channel)

• Build a Top 10 Introducers list : founders, angels, ecosystem builders.

• Monthly check-in with tailored updates (focus sector, geo, or stage).

• Track hit-rate via Notion/decile hub CRM.

2. Accelerators & Demo Days

A structured pipeline for institutional-quality deal flow.

• Tracker: cohort name, theme, demo date, follow-up status(within 72 hrs).

• Priority: Antler Nairobi, iHub, Visa Accelerator, ALX Africa, AfricArena,NAIBAN

3. Platforms

A weekly sourcing ritual.

• Wednesday Scan: shortlist 5 startups

• Filters: sector, geography, traction, model fit

• Platforms: VC4A, Capmad, StartupList Africa, Tracxn, TechPoint, Weetracker, TechCabal

4. Events & Communities

• Maintained monthly ecosystem calendar (pitch nights, demo days, mixers).

• Attend 3/month; log at least founders per event.

• Follow up within 48 hours with a personal note or intro.

• Leverage Connect Culture community for intel and intros.

C) Screening & Pipeline

→ 15-Min quick Screen. Check for:

• Founder–market fit

• Pain-point clarity

• Moat & tech edge

• Traction signal

Scorecard Tags:

• Pass / Follow / Meet

• Filtered by thesis fit, execution, market dynamics, and capital efficiency

Pipeline Rules:

• Every record has

  • Next Action & Date

  • Source

  • Stage

• Bi-Weekly cleanup of stale deals.

D) Content-as-a-Deal-Magnet

• Monthly memos on different sectors,regions and new projects in the ecosystem

• Startup Spotlight: write short analytical profiles of promising ventures.

  → A chat with founders to understand their startups, solution and approach

• LinkedIn posts/Twitter Threads: sector insights, teardown mini-essays, and “Office Hours” prompts for inbound deal flow.

Content explores the ecosystem, expands reach, sharpens thesis,helps me learn and builds trust long before a first call.

Review Rhythm

• bI-Weekly (Friday evenings): Review pipeline and clean up.

• Monthly: Evaluate sourcing channel efficiency.

• Quarterly: Update thesis sectors & builder memo insights based on learnings.

Closing Reflection

Deal sourcing is both hunting and orbiting.With a structure and consistency in conversations, content, community, and curiosity you find yourself surrounded a community of founders and players you resonate with and work best with.

In this case this sourcing system is a compounding engine , a structure that turns weekly actions into annual relationships,builds trust, and a pipeline that matures with me.

Its not written on stone, its an ever evolving, tightening, and quietly shaping system helping learn, journey through and build both skills , a network and a pipeline.

A deal sourcing thesis is a personal compass for identifying, filtering, and prioritizing the types of startups an investor chooses to pursue. It clarifies where you look, why you look there, and what signals guide your conviction.A living framework shaped by background, interests, and long-term vision that helps focus attention, make consistent decisions, and build depth in sectors or founder profiles.

Background

My worldview as an emerging investor is shaped by three pillars: an engineering and manufacturing background, a long-term ambition to finance and build infrastructure, and a deep interest in strengthening Africa’s media landscape and building a local high value impact community . These threads alongside the state of the ecosystem converge into a personal thesis that is still evolving but already clear enough to guide my initial sourcing, curiosity, and direction.

This thesis is not static. It will sharpen with each conversation, each deal, each memo, and each ecosystem I learn from. But for now it provides an intentional lens through which I identify founders and ideas worth backing.

I focus on sourcing early stage, pre-seed and seed-stage startups across emerging markets with a focused lens on founders’ potential , vision and ventures positioned to scale beyond local boundaries.

Sectors of Interest

• Tech Infrastructure

Connectivity, cloud, logistics, data services, digital payment rails; the pipes enabling a modern economy.

• Advanced Manufacturing & Assembly

Scalable production models solving supply chain gaps, increasing local value capture

• Community-Centric Media Platforms

Digital spaces shaping culture, creativity, and community the next frontier of narrative power and influence.

• Agtech

Tools that improve food and farmer productivity, strengthen food systems, and modernize agricultural supply chains.

• Climate Tech

Solutions accelerating energy transition, sustainable mobility, resource resilience, and new climate centred solutions

These are categories where I lean towards and believe need meets opportunity and long-term structural value can be created.

Founder Profile

Mission driven, execution focused teams solving urgent local problems with the potential to reach pan African scale.

I gravitate toward:

• Mission-driven teams solving clear, painful problems

• Builders grounded in execution, not just vision

• Founders with a continental mindset from Day One

• People who treat constraints as catalysts, not blockers

In emerging markets, the founder often is the moat. Their resilience, clarity, and pace are leading indicators of what the venture may become.

Startup Selection Lens

A startup moves into my pipeline when it reflects:

• Solves a validated market pain point.

Real demand > theoretical frameworks.

• A credible path to ~$6M+ annual revenue in 5–7 years

Not a rule, but a signal of scalable economic

• The team shows strong execution capacity and resilience.

Clear operating rhythm, learning velocity, adaptability.

• Aligned with emerging markets demographic and climate megatrends.

The best ventures ride irreversible waves.

This is the filter I use today ,wide enough to learn broadly, tight enough to stay intentional.

Conclusion

As I meet more founders, collaborate with investors, and study ecosystems across Africa and Europe, this thesis will narrow, deepen, and mature.

With time,it will evolve into a sharper investment identity, one that blends engineering logic, ecosystem insight, continental ambition, and the desire to build and support ventures that move markets.

This is a clear sense of direction, anchored in learning, curiosity, and the belief that next decade will be built by disciplined, imaginative, and globally minded founders.

At the center of that architecture sits venture accounting: the discipline that keeps structure, capital, value, and performance aligned.
Invisible to the ecosystem, yet it is the foundation on which ventures stand.

Below is a distilled look at written for clarity, concisely, and long-term reference.

Share

1. Structure & Capital Accounting

Most venture funds adopt the classical GP/LP structure. LPs commit capital; the GP manages and deploys it. From this, the core accounting flows emerge:

• Capital Commitments — the agreed total investment.

• Capital Calls — drawn down only when required.

• Distributions — cash or stock returned to LPs.

• Called vs. Uncalled Capital — the liquidity picture.

• Recycling — reinvesting early proceeds to stretch capital.

• Management Fees & Carry — the GP’s compensation framework.

Mini Insight: Capital Calls
Capital is requested only when needed. LPs wire money into the partnership account, where it is allocated to investments, fees, or operations. This protects LP liquidity and enforces deployment discipline ,a fundamental element of venture finance.

2. Investment Accounting

Investment accounting records and monitors the full arc of every deal:

• Initial Investments (recorded at cost, ownership formalized)

• Follow-on Rounds and dilution tracking

• Convertible notes & SAFEs until conversion

• Valuation adjustments (markups, markdowns, write-downs)

• Recognition of gains (dividends, interest, secondaries, exits)

Insight: Markups vs. Realized Gains

• Markups signal progress they move valuation on paper.

• Realized gains return actual cash to the fund.
  One is a milestone. The other is the scoreboard.

3. Financial Reporting

A disciplined venture operation produces a timely, clean, and verifiable report that can be used to retrace and understand every aspect of the project. Here are the key reports:

• Quarterly & annual financial statements

• NAV reports — net asset value of the fund

• Schedule of Investments — holdings, cost, valuation

• Portfolio valuation reports (methods, assumptions, outcomes)

• Capital account statements + IRR, DPI, TVPI, RVPI

Many funds outsource administration, but the GP still needs deep comprehension.
Financial reporting is where LPs evaluate discipline, value creation, and credibility.

4. Performance Metrics & Analysis

Every investment is measured somehow,for funds and investors this is through the perfomance metrics.A breakdown of the fund(s) progress. Venture performance rests on four core metrics:

• IRR — time-weighted return

• TVPI — total value (realized + unrealized)

• DPI — realized value returned

• RVPI — value still locked in the portfolio

Supporting analysis includes:

• Portfolio company tracking

• Cohort and vintage analysis

• Benchmarking against indices or peer funds

Insight: DPI vs. TVPI

• DPI shows what has actually come back.

• TVPI includes DPI plus the remaining unrealized value.
  Over time, DPI becomes the clearest measure of true performance.

  Share The Builders' Memo

5. Operational Accounting & Controls

Operations anchor the entire structure:

• Expense tracking (legal, audit, admin, travel)

• Cash movement logs and reconciliations

• Internal controls and segregation of duties

• Audit preparation

• Workflows with administrators and infrastructure tools

Operational discipline reduces error, strengthens governance, and enables scale.
Clear separation between investment authorization, cash handling, and record-keeping is essential for trust and resilience.

6. Taxation & Regulatory Accounting

In all forms of business engagement, there are regulatory issues that ought to be handled with cash flow and outflow involved. This areas in build the backbone and trust with engagements thus determine compliance and investor trust. They include:

• Carried interest taxation

• Withholding taxes for cross-border LPs

• Regional regulatory filings (SEC, CMA, FCA, etc.)

• Cross-jurisdictional structures and reporting standards

Mini Insight: Why Compliance Matters
Regulatory clarity signals maturity, reduces risk, and proves to Partners that the fund operates within a stable, enforceable structure a prerequisite for institutional participation.

7. The Capital Engine

Venture accounting is not a set of isolated tasks.
It is a unified engine:

• Structure defines the flow of capital.

• Investment accounting tracks deployment.

• Reporting clarifies ownership and value.

• Performance metrics interpret results.

• Operations, tax, and compliance safeguard the system.

A disciplined investor internalizes the essentials, builds reliable processes, and makes decisions rooted in numbers that are defensible, transparent, and precise.

This is the unglamorous side of venture — but it is the side that determines who endures.

Closing Reflection

In venture, stories open doors, but numbers build institutions. The ecosystem celebrates the visible deals, founders, announcements, momentum. Yet the real work sits quietly in the background: structures that hold, systems that scale, and financial discipline that compounds over time.

Understanding venture accounting is not only about compliance or reporting but also learning the language that turns numbers into a fund and a firm the institution that invests and brings resources to the innovation ecosystem and story.

When it comes to Startup valuation,most investors triangulate multiple methods rather than rely on one when valuating a startup. What matters is clarity, documentation, and consistency.Here are a few methods used:

A. Fallback Valuation Method

When no recent round exists, early-stage investors use a simplified structure assessing five core drivers:

• Sound Idea – quality and clarity of the concept

• Prototype – reduction in technology risk

• Strong Team – execution capacity

• Strategic Relationships – early distribution or market access

• Early Sales or Rollout – early validation of production and demand

This method exists to reduce risk blindness, not to create artificial precision.

B. Peer Multiples / Scorecard Method

Developed by Bill Payne, this compares the startup to industry peers using weighted factors:

• Team Strength – 30%

• Market Opportunity – 25%

• Product / Service – 15%

• Competitive Landscape – 10%

• Marketing Channels – 10%

• Capital Needs – 5%

• Other Factors – 5%

Useful where clusters, ecosystems, and regional comparables exist.

C. Discounted Cash Flow (DCF)

More relevant for companies with predictable revenue:

1. Project cash flows

2. Select a discount rate (WACC or risk-adjusted)

3. Calculate NPV

4. Sense-check against traction & comparables

DCF is less about precision early on — more about understanding sensitivity and risk.

D. Benchmark Discounting

Applying sector-specific discounts so valuations remain comparable across industries with different risk curves.

E. Venture Capital Method

A staple VC approach that works backwards from the hypothetical exit:

1. Estimate investment needed

2. Forecast revenue and costs

3. Set exit timing (typically 5–7 years)

4. Calculate terminal value using revenue or earnings multiples

5. Discount to present value

6. Determine ownership and pre/post-money valuations

It is a forward-belief model anchored in return expectations.

F. First Chicago Method

Where uncertainty is high, this blends scenario analysis:

• Optimistic

• Base

• Pessimistic

Weighted by probabilities, the blended valuation mirrors reality more closely than single-scenario models.

Example:

• $50M × 30% = $15M

• $30M × 40% = $12M

• $10M × 30% = $3M
  Final valuation = $30M weighted average

  Share

While doing valuation, a startup go through one of this :Markups, Markdowns & Write-Offs

Valuation being a living number this adjustments are done using available data and traction:

• Markups – Raised at a higher price or showed clear commercial progress

• Markdowns – Underperformance, missed milestones, down rounds

• Write-offs – Operations cease or recovery is unlikely

The golden rule:
prefer realism over optimism; consistency over creativity.

Internal Valuation Review Governance

Credible firms use structured governance ,an Internal Valuation Committee meeting quarterly or semi-annually to:

• Review valuation models

• Assess market movements

• Compare with public/private benchmarks

• Document assumptions

• Produce valuation memos & commentary notes

This governance builds trust with LPs and protects the investment team from bias.

Navigating Sparse or Illiquid Markets

In emerging ecosystems with few comparable transactions:

• Rely on peer benchmarks and macro indicators

• Anchor to operational milestones (ARR, users, retention, unit economics)

• Avoid unjustified markups

• Document qualitative progress (pilots, partnerships, IP)

• Apply discipline across all portfolio companies

Conservatism becomes a signal of competence, not caution.

Two philosophies exist:

Conservative marking

• LP-first

• Trust-building

• Reduces NAV volatility

• Minimizes future restatements

Aggressive marking

• Short-term uplift

• Higher perceived momentum

• Higher risk of reversals

In emerging markets, where liquidity is thin and price signals sparse, conservative, evidence-backed valuation remains the gold standard.

Valuation balances the energy of builders with the discipline of investors. It rewards clarity, steady execution, and credibility. And when done well, it becomes less about the number and more about alignment of the startup.

Leave a comment

This happens when there’s no formal valuation yet, just traction, potential, and momentum.
Investors believe in the team, the idea, and the direction and it’s too early to price the dream.Instead of debating valuation, founders and investors agree on something simpler:
“Let’s keep building, and when the time comes, this belief will convert into ownership.”

That’s Convertible Notes and SAFEs which temporary bridges to structured ownership.

Convertible Notes

A convertible note is technically a loan,debt that converts into equity later, usually during the next priced round (like a Seed or Series A).It allows investors to put money in now and receive shares later when the company’s valuation becomes clearer.

Key features:

• Principal & Interest:Like any loan,it carries an interest rate(typically 5–8%).

• Conversion: Instead of repayment, the note converts into equity at a discount when new investors come in.

• Maturity Date: If no round happens by a set time, the note may convert or, in rare cases, be repaid.

It’s fast, flexible, and founder-friendly ,though it does carry a subtle reminder: debt matures.

Share

SAFEs (Simple Agreements for Future Equity)

A SAFE is the next-generation version; simpler, cleaner, and not a loan.
Created by Y Combinator in 2013, it lets investors give money now for the right to future equity, without debt, interest, or maturity dates.

It’s a promise that when a priced round happens, their money will convert into shares typically with a valuation cap or discount as their reward for early belief.

Key difference from a note:
No interest. No repayment. Just belief that turns into ownership.

The Mechanics of Conversion

Here’s the simple story:

1. An investor contributes early capital say, $100,000 via a SAFE.

2. They agree to a valuation cap (the maximum valuation their investment will convert at) or a discount (a percentage reduction on the next round’s share price).

3. When the company raises a priced round say, at a $5M valuation their SAFE converts into shares at the cap or discount rate.

Example:
If the SAFE cap was $3M and the next round is $5M, the SAFE investor converts as if the company were valued at $3M — owning a slightly larger piece for believing early.

That’s the reward for faith early risk recognized in equity form.

Notes vs. SAFEs

Both tools serve the same purpose: early funding without a valuation debate but carry different implications depending on your stage and investor type.

Convertible Notes are essentially short-term debt that convert into equity during a future financing round. They come with an interest rate and a maturity date, meaning if conversion doesn’t happen within that period, repayment may technically be due. Investors often prefer them for their familiarity, especially angels and early funds. For founders, they offer a balance between simplicity and flexibility, but come with a bit more structure to manage.

SAFEs (Simple Agreements for Future Equity), on the other hand, are not debt — they’re pure agreements for future equity. There’s no interest, no maturity date, and no risk of repayment. SAFEs are typically faster and cheaper to execute, which makes them popular with accelerators and founder-friendly investors. They tilt the advantage slightly toward the founder, reducing legal overhead while maintaining clarity on future conversion.

In short:

• Convertible Notes are structured and traditional, offering investor comfort with mild complexity.

• SAFEs are lean and modern, designed for speed, simplicity, and founder focus.

Narratively:
Convertible Notes are bridges; SAFEs are promises.
Both exist to make early funding faster, cleaner, and focused on growth, not paperwork.

And that’s the trilogy:

• Memo 1: You learned what ownership means (Cap Tables).

• Memo 2: You understood what partnership requires (Term Sheets).

• Memo 3: You now see how belief starts — unstructured, trusting, but with a path to maturity (Convertible Notes & SAFEs).

These three together form the rhythm of venture building — belief → structure → partnerships.

Raise on trust. Convert on proof. Build with purpose.

Leave a comment