My Life In Tech is putting human faces to some of the innovative startups, investments and policy formations driving the technology sector across Africa.
Lavanya Anand was born in India to a very traditional family and considered herself very risk averse. She now spends her time in Kenya seeking out exciting startups to place a bet on as part of the team at VC firm VestedWorld. This is her life in tech.
After graduating college in 2011, Lavanya Anand spent the next five years building a career in public accounting and finance working with various organisations across a wide range of industries including global entertainment company Sony Pictures in Los Angeles. Between this time and 2016 when she went on to pursue a Master’s in Business Administration, Anand had become intrigued by the growing startup scene in Los Angeles.
She became involved in the activities of General Assembly, a tech education organisation with an LA branch as well as +Acumen, a community-based arm of the impact investment company, Acumen. It was also during this period she met and volunteered with pre-revenue stage Tala, an LA-based mobile lending app for emerging markets founded by Shivani Siroya.
“During this time, I became fascinated with the role of technology in frontier markets like South Asia and East Africa,” Anand tells me.
Born in India to a relatively traditional family of an engineer father, finance mum and medical doctor sibling, Anand’s career path seemed already laid out for her.
“I always found myself being drawn to entrepreneurial ventures but was always too afraid to take a risk,” she says on our call.
But her time at business school proved useful in changing her aversion for risk and shifting her away from finance towards technology and investments.
“I had less to lose in a way,” she recalls. “I felt like I had a backup plan. If I did take a risk and it didn’t work out, I have two degrees I can rely upon to pursue a more traditional career.”
At business school, the two-year programme was dotted by practical internships with startups and investment firms including VestedWorld where she currently works. At the time, she was focused on the firm’s East Africa pipeline sourcing deals and carrying out due diligence.
In 2018, after VestedWorld had raised a fund and were looking to have someone stationed on ground in the region, Anand, eager to move abroad, joined the company full time and moved to Nairobi where she’s led the firm’s operations since then in her capacity as Vice President.
When I look back five to ten years, I did not realise 100% that this is where I’ll be but I am extremely happy with how my career transitioned.”Lavanya Anand
How VestedWorld sources its deals
Founded in 2014 and headquartered in Chicago, VestedWorld invests in early-stage companies in emerging markets usually with ticket sizes of about US$500,000 according to Anand. Its portfolio boasts some exciting startups out of the continent across a number of sectors including nascent ones like femtech. Earlier this year, VestedWorld made an undisclosed amount of investment into Kasha, a women’s-only e-commerce company with operations in Kenya and Rwanda. Other companies in its portfolio include Sendy, the Kenyan-based tech logistics company; Tomato Jos in Nigeria, and DrugStoc, the tech-based pharmaceutical distribution company based in Lagos.
“We are a relatively sector agnostic fund,” says Anand.
Sourcing deals is a mix of inbound and outbound efforts sporting a mix of startups recommended by members of the investment community, accelerator programmes or cold pitches as well as startups that the firm seeks out through events, meetups and other such interactions.
While companies in stages up to their growth phases are welcome, the firm’s ideal startups are those who utilise technology in their products/services as opposed to core tech startups, have already developed market fit, are generating revenue and are looking to scale their operations.
What does an investable company look like for VestedWorld?
There are a few criteria that Anand and her team look for when deciding to invest in a startup. One is the team and founders that make up the company, with specific inquiry into their abilities to execute the business’ vision as well as whether they have a strong network of people to rely on for support and sound business advice when they need it.
“Typically, we like to see co-founders because we know how hard it is to grow a business from scratch,” Anand adds.
“To the extent that you can have two people leading the business, the better.”
VestedWorld is also keen on investing in founders that they find coachable, individuals who are willing and open to learning, receiving feedback and collaboratively thinking through problems and solutions. There is also consideration of what business models the startups are looking to adopt and how readily they can adapt to changes as informed by the needs of their target market.
The size of the market within which the startup intends to play including competitors and regulatory hurdles already present, what potentials there are for scale, are also very critical in determining what deals pull through or not.
Understanding the expat-local founder gaps in Kenya
Kenya, Nigeria and South Africa are often seen as the continent’s beacons of technology communities and development across the east, west and south. But they differ in a lot of ways. Nairobi, for one, attracts a more international population so that you find more expat founders in the region, a topic of aged concern particularly with respect to funding.
“It’s probably 70% expat, 30% local in terms of the ones gaining recognition or the ones that have fund raising rounds being publicised, etcetera,” Anand says.
She argues that, especially for new investors interested in emerging markets, the East African country (and region) offers a softer landing spot with quite a number of global venture firms headquartered there. With these investors looking at very similar pitch decks, there is an increased competition for the same pool of startups with expat founders who already have strong networks in Europe or the US more likely favoured over their local counterparts. This is because and they most likely have more experience to benchmark how to value their business, communicate effectively with investors or “sometimes even tell them what they are looking to hear.”
In addition to being able to better market their startups, Anand says expat and local founders can differ in their understanding of the nuances of the market. Local founders who have lived long enough in the country tend to understand the nuances of their market better although overtime and through surrounding themselves with locals, expat founders may arrive at similar levels of understanding of the markets..
“If you’re comparing expat founders in Nairobi to say local founders in Lagos, I would say there’s not a huge difference,” she says, in terms of the kinds of products and solutions that they are building.
Something she believes is improving with new accelerator programs in the market is the knowledge gap of the intricacies of venture capital funding between expat and local founders. The former, often with more experience in western markets, tend to come with the lingo and pre-existing knowledge of typical VC expectations and so are able to better position themselves and their companies.
“I think part of it is just speaking the same language as investors which can go a long way in terms of first impressions and just presentability.”
Another difference she admits she has seen repeatedly is the aspiration for scale.
“There’s a broad range in terms of what they are aspiring their businesses to become,” she says of local founders but an expat founder “wouldn’t have moved here if they wanted to build a US$5 million business.”
“They are oftentimes coming here to build a US$50-100million business,” Anand says.
“It’s not to say local founders aren’t aspirational but you tend to see a broader range of what they are striving for,” she’s quick to clarify.
In spite of these differences, the Kenyan ecosystem boasts of a deep sense of community and camerederie which Anand says made her move and settling into the space much easier. People are willing to make introductions, connect and share their ideas and passions.
“And everyone is also doing very interesting things whether in the startup world or the NGO world or development world.”