We recently had an interview with Brigit van Dijk-van de Reijt, the CEO of DOB Equity; a leading Dutch family office which invests in innovative, scalable and impactful companies across the East African market.
The PE firm has invested in a number of Kenyan companies including; Twiga Foods, Copia, Countryside Dairy, M-KOPA, PowerGen, Barefoot Power, Bridge International Academies, Africa Logistic Properties(ALP) and ferry operator Globology Ltd.
We met Ms Brigit in their Nairobi office where she talked about the current status of DOB Equity, their investment strategy, how they hunt for deals and the state of the African venture capital industry.
On evaluation of investment opportunities…
“Before we invest in a business, we take time to learn about the sector, the company and its management. This enables us to connect with the entrepreneur. We make sure that whoever we are investing in is someone that we can get along with and understands the business well, and of course you must have a shared vision”, she said. She adds that one of the most important ingredients for any business is a highly skilled, visionary and passionate team.
Ms Brigit says, they spend a lot of time with the entrepreneur before taking a position. The firm typically invests in sectors such as, agribusiness, retail, transportation, warehousing and distribution, education, renewable energy and healthcare.
“There a lot of money-seeking companies out there but for us, we are more focused on companies that generate social or environmental good alongside a financial return”, she said.
Asked on why they do not take up controlling stakes in most of the companies they have an interest in, Ms Brigit said, “A fair share of our target companies is in their early stages. We want the owners of the businesses to be eager yet comfortable and aligned and have control over their business as we provide the support needed. We see them as partners and this enables us to grow very fast. We claim board positions and we protect our minority rights through the legal framework”
What are the common challenges you face while investing in small businesses that are mostly in their early stages?
Ms Brigit is very positive about the entrepreneurial opportunities in East Africa even when financing remains a barrier to entrepreneurial success across the continent. She believes that each and every country has its own challenges but paucity of skilled employees, as well as information on markets, infrastructure and regulatory issues are some of the biggest challenges they face in the East African market.
She adds that DOB Equity recently opened a larger office in Nairobi and extended the local teams. In combination with their Tanzania office and support from their Netherlands office, this has provided them tremendous access to high quality investment opportunities. It also allows them to put more resources on portfolio management. She notes that her long term private equity knowledge and experience across Latin America,, Africa and Asian markets has afforded her the ability to make wise investment decisions and to try new things. She worked for Abraaj Capital, previously as a Partner in Aureos Capital, a global PE fund investing in SMEs across frontier and emerging markets, and was Head of PE at FMO, the Dutch development bank, from 2001 till 2007.
On Twiga Foods Deal…….
“We want to invest into companies that over time will create or transform an industry, Twiga Foods is one such company that already became a significant player in the value chain market. We liked Twiga foods because they are trying to take out the economic inefficiencies in the supply chain and in turn provide better quality and affordable food products to the end consumer. Their business is innovative and very scalable.”
Where are you trying to find investments?
“We are pretty well diversified, but have had our eye on and continue to look at the transportation and storage as well as the agribusiness sector, with a focus on the milk processing industry.”
DOB recently invested KSH400 Million in Africa Logistic Properties (ALP), a company she believes will transform the storage sector, especially for SME’s. “What we love about the company is that they have a visionary CEO in Toby Selman, who is also the co-founder and who is supported by an incredible management team.
Currently, DOB Equity is working on a number of new investment opportunities and actively working with its existing portfolio companies. Ms Brigit noted that they are currently finalizing on three deals; one in Rwanda, Tanzania and one in Kenya and announcement will be made any time soon although she declined to give the specifics.