Silicon Valley model of venture capital still struggles on Africa startups –Silvertree Capital


startupThat quite a number of Africa startups are struggling is not a secret and according to one of the reasons given for this by startup firm Silvertree Capital is lacking of funding.

So far, most startups in Africa have adopted the Silicon Valley-style entrepreneurship, i.e., small teams building businesses from scratch, securing investment over one or more rounds, and using the Internet or mobile technology to deliver services.

While there have been some recorded successes that have substantially impacted the continent’s economy, having no money has been their archille heel of quite a number of them and now Silvertree Capital, is proposing that they work  from what they themselves have termed, the “Business Builder” model.

This model involves supplementing existing start-up teams and shifting the focus of companies solely to execution. With this model, Silvertree Capital has made it their aim to build businesses in Africa. Although the investment size of the model is large ($100 – a few $m), the idea has been a proven success.

This can be illustrated through Silvertree’s various portfolio companies, whom they have invested in, during just one year ofoperations. These include: CyberCellar, WineCo ,Sprout  Click n Compare PinPoll HealthCart); and Aythan– based in Dubai.

The name of the Silvertree conglomerate of startups comes from the remarkable evergreen tree that grows up to 5–7m tall,  both fast-growing and enduring – two characteristics that define the company.

As an entrepreneur, one of the greatest challenges I have experienced has been trying to understand the different facets of the various markets we are involved in. Despite the trials, however, entrepreneurship is a rollercoaster ride. No day is the same and the best part is that you get to create. Whether it’s a new job, product or solution to a real-life problem, your creations make an impact, Manual Koser who is the Managing Director of Slivdertree Capital

When asked about the current success of his business and the road he travelled to get here he said; “I first got involved with Silvertree Capital when my previous business partner, Peter Allerstorfer, and I saw a business opportunity within Africa’s technological landscape, through our success in founding Zando. We decided to partner with Paul Cook, from McKinsey, and start a company with the aim of investing in profitable (or potentially profitable) technologically or financially-oriented businesses, in Africa.”

‘ Due to the continent’s ever-growing population, increased Internet penetration, and reduced costs of data, we knew Africa was more than ready for the introduction of Internet-based start-ups. With funding being the only obstacle standing in the way of these ventures, we moved in swiftly to offer capital where there was none,”