1. BUSINESS DESCRIPTION

In the late 2010s and early 2020s, the venture capital ecosystem in Africa transitioned from a nascent angel-investor-driven framework to a robust ecosystem able to support companies from the pre-seed stage through to Series D, strategic sale/IPO and beyond. An opportunity emerged for Sango to invest in an emerging sector at scale, starting with managers in regional VC hubs including Lagos, Cairo, Johannesburg, Cape Town and Nairobi.

African startup activity is dominated by the application of proven technologies to a number of industry verticals in Africa, including agritech, e-commerce, edtech, energy tech, fintech, healthtech, insuretech, logistics, media and mobility. For most startups, technology risk is low, allowing founders and management teams to focus on their commercial plans, speeding the path to profitability. A common theme in the space is providing African technology-enabled solutions that allow the continent to leapfrog legacy systems in such industries as finance, education and health, moving directly to technology-enabled services on mobile platforms. In some cases, technology is increasingly being used to provide cost-effective solutions that are easily portable across both developed and other emerging markets.

2. SANGO’S ROLE

2.1. Fund Investments

Fund investments: Having tracked the development of the VC ecosystem from its early stages, Sango was able to move quickly to establish a number of relationships with experienced, well-networked technology investors across the continent. Sango’s network of relationships allowed for robust cross-checking of GPs, providing comfort that selected firms had strong deal flow, an ability to add value to portfolio companies, and the influence to achieve exit events through strategic sale, the entry of private growth-stage investors or accessing the public market. Emphasis was also placed on the back-office capacities of young managers, ensuring their ability to absorb and deploy institutional capital in a disciplined fashion.

2.2. Co-Investments

Sango has positioned itself as a strategic co-investor in a number of high-growth companies. This has created opportunities for enhanced risk-adjusted returns for Sango Tech-Enabled Growth by following on with investment in some of the mid-stage companies that are growing into Africa’s technology champions. Sango has added value to such companies through introductions to key talent and financing sources, helping with geographic expansion, as well as making Sango’s operating partners and advisors available to help solve portfolio companies’ pressing operational issues.

2.3. Secondary Investments

Sango has positioned itself as an investor in the secondary market for venture-stage equity. Through key partnerships, Sango has been able to take positions in later-stage private companies where early investors were seeking liquidity for equity stakes prior to an IPO or sale event. With such secondary investments, Sango gets exposure to companies that have proven business models but which also have substantial growth runways ahead of them.

3. CONCLUSION

Sango Tech-Enabled Growth has provided our investors with diversified exposure to an emerging investable set of African technology companies, with a long period of expected supernormal growth ahead.

SANGO VEHICLES INVESTED

Sango Private Equity II (“Fund II”) and Sango Private Equity III (“Fund III”).