Transforming Africa’s rich landscape into greatness drives Hiruy Amanuel in his role as an African Venture Capitalist and major investor in Africa’s Technological Advancement. With his desire to make an impact and work with companies that have the potential to scale across the African continent, Hiruy has been able to create opportunities for many through sound investment in the private sector.
In this rapid-fire Q&A, Hiruy Amanuel shares his sentiments on Africa’s VC Ecosystem.
Motivation
Ques: What inspired you to venture into investing in the African Continent?
Hiruy: I was largely inspired by the lack of talent training and the massive youth population across the continent.
Entrepreneurial Ecosystem
Ques: How would you describe the current state of the entrepreneurial ecosystem in Africa, and what factors contribute to its growth or hindrance?
Hiruy: Every country faces unique challenges that make its ecosystems unique. However, the entrepreneurial system across Africa is overall, challenging. There are a lot of infrastructural issues that deter entrepreneurs from achieving their milestones and company goals. For instance, across Africa, there are power outages. There’s also a lack of training that makes it daunting to find talent within the ecosystem. In addition, traditional VC Structures based in Europe and the United States don’t work in Africa. Lastly, many countries go through political instability that disrupts the economic growth of the countries during certain periods e.g. elections.
Industry Focus
Ques: Are there specific industries or sectors in Africa that you believe hold the most promise for VC investment?
Hiruy: Yes, I do.
Ques: Which ones?
Hiruy: The biggest promise with sectors, I have found, is where technology and infrastructure intersect. These sectors include Fintech, Microfinance, Payment Solutions, Communication and Mobile Apps, Agrotech, and Healthtech. These are the stable sectors that will propel Africa towards scaling rapidly.
Ques: How do you see the landscape diversifying in terms of investment sectors?
Hiruy: Africa has great potential. The rising number of fresh talent and ideas is impressive as it depicts a largely innovative continent. From an investor’s point of view, while certain sectors are great to invest in, there are still others that are a bit hard to scale. However, I believe that currently stable sectors will push Africa towards scaling rapidly. For instance, if we look at Agrotech, external factors such as political instability won’t stop crops from growing (so long as the political unrest is not there). Such sectors are great to leverage.
Challenges and Opportunities
Ques: What do you see as the major challenges and opportunities for both investors and startups in the African VC ecosystem?
Hiruy: Challenges – For Investors, it is mostly a lack of visibility, lack of proper legal structures, and lack of training. For Startups, the challenges lean more toward infrastructural issues, political setbacks, power outages, and hiring issues. These all prevent the startups from scaling.
Opportunities: The untapped wealth of the continent lies in its youth. Mobilizing these youth and training them often leads to a better Return On Investment.
Advice for Entrepreneurs
Ques: For aspiring entrepreneurs in Africa, what advice do you have regarding attracting VC investment and building successful, scalable businesses?
Hiruy: Make sure you have a vision and a purpose that’s greater than monetary returns. Find a problem and come up with a solution to fix it. Be passionate about what you’re doing because setbacks happen. When they do, you have to be diligent in dealing with them. That’s the difference between doing something for money vis-à-vis for passion – if you’re in it for the money, it’s very easy to get discouraged. Think long-term – Vision, Purpose, and Passion.
Future Outlook
Ques: What is your outlook on the future of VC in Africa, and what do you think will be the key drivers of growth and innovation in the coming years?
Hiruy: I believe that we need more private firms that will help founders and young startups scale while being involved at the ground level. Firms that intentionally grow with startups add more value, as opposed to giving them cash and leaving them be, because often, without that mentorship and support, many end up stagnating, failing, or dying altogether.
About Hiruy Amanuel
Having worked as both an investor and founder, Hiruy brings a dual perspective and sees the bigger picture when making strategic decisions. He is the Managing Director of Gullit VC, a venture capital firm that invests in early-stage African tech startups and finances through seed, pre-seed, debt acquisition, and restructuring rounds. The company offers legal consulting, media support, financial consulting, and coaching for founders and CEOs.