Silvertree Capital, one of Africa’s latest venture capital companies, has told HumanIPO they are hoping to bring a new, flexible approach to supporting startups and e-commerce business on the continent.
The fund announced earlier this month it had set up Healthcart.co.za, while earlier this week they confirmed investment in Nigerian e-commerce sites Sunglasses.com.ng and Glamour.com.ng.
In an exclusive interview with HumanIPO, founding partners of the fund Manuel Koser and Paul Cook outlined their vision for Silvertree Capital and why they believe the accelerator model is not necessarily the most beneficial to African startups.
Koser, who left his job as managing director of leading fashion e-commerce site Zando.co.za to set up the fund with Cook, said: “I am not a believer in the accelerator model at all. It is taking away a huge chunk of equity from an entrepreneur for more or less advice and not very much capital.”
Concerning accelerators, Cook said: “The really good teams will not go there. They (accelerators) will end up getting the mid-quality ideas. It ends up being having some office space and giving some advice and networking.”
Cook and Koser did say they believe accelerators and incubators can play an important part in the emerging technology ecosystems in South Africa, Kenya and Nigeria.
Silvertree Capital currently has seven investment interests, which are all based in South Africa or Nigeria.
When they embark on ventures such Healthcart.co.za, Cook says the idea is to eventually pass them on to be run by one of the employees.
Cook added: “What we are really wanting to do is, especially where we are playing an advisory role, is help these startups move from being a technology focus to a business focus.”
While the fund’s current investments are in South Africa and Nigeria, the pair said they are looking at ventures in Kenya.
Koser added: “In terms of priorities it is Nigeria, South Africa, Kenya and in that order. We happen to be living in South Africa, but market-wise Nigeria is where our focus is. It is largely driven by our networks and we happen to know more people in Nigeria and South Africa.”
