In 2021, investments into African startups hit new record highs at over $4 billion compared to $1.5 Billion in 2020 according to a recent report by Techcrunch.
With the boom in VC to the continent’s startups — which has drawn investors such as Softbank — Everyone wants a piece of Africa’s most promising startups, but few can get it.
Stakeholders have echoed the need for more early-stage funding options, and that’s where Vishal Agarwal and his friend Raj Kulasingam come in. They were early investors in companies like Kuda, Smile Identity, Fingo, OnePipe, FinAccess, Cassbana, among others.
But he’s had his fair share of misses, too, and he’ll be the first to admit it.
“I made enough mistakes, lost money in the early years. My wife has shouted at me a sufficient number of times – I call that the tuition of life,” Vishal was quoted by Business Daily in a recent interview.
Mr Agarwal says he started investing in startups very early when he was a senior executive at PwC in Kenya, and General Electric in Africa. He says at the time, he could not buy into quoted stocks due to conflict of interest in the regulated space.
After leaving the corporate world after 24 years, he teamed up with his best friend Raj Kulasingam, a senior counsel at one of the world’s largest law firms Dentons in London. Together, through their investment firm Full Circle, they have invested in about 50 companies including four investment funds.
In 2021,Mr Agarwal and his bes friend Raj Kulasingam participated in 33 deals – across Africa, in Silicon Valley, in the UK, and Indonesia.
“Believe it or not I listen to three hours of pitches a day on a zoom call, make decisions on Friday. On Monday we wire the money, and the cycle continues,” Mr Agarwal on how they make a decision to invest in a startup.
The founder network is kind of like the Mafia and Mr Agarwal believes that how you build the network is having a good reputation.
Advice to startups
Mr Agarwal advises founders to understand how to navigate changing their innovations into a business, which he says is an education process.
Vishal says that they will not invest in a company where the founder is overly greedy, wants too much valuations, is worried about dilution, and does not want to give value to investors.
“The venture capital game is such that as you start the business, say with two founders where you allocate each other shares, then in future you allocate employee share options, create a vesting programme and put some shares and invite external investors to come in, then do a second round and in no time you have a tiny fraction of the business left as the founders,” he says.