I just returned from a trip to Morocco. While there, I remembered the first time I visited Cairo and saw camels. I was impressed by their height and endurance to keep going in the desert under very harsh conditions. At that time, I was not a venture capitalist. Now, reflecting on that experience and with 25 years of investing in young companies and venture capital funds under my belt, the image of the camel is even more interesting to me.

Why? As an investor, shouldn’t I be focused on my companies becoming unicorns: companies with a billion-dollar valuation, seeking hyper-growth through first-mover advantage in a market or sector, aggressively expanding, focused on getting more and more customers, even at the cost of losing money along the way?

But as an investor in the Global South (LatAm, Africa/MENA, India, and Southeast Asia), perhaps the image of a camel fits our reality better. The venture capital industry is still recovering from the 2021 bubble, so when I think about the type of companies that investors today are looking for, camels seem a better fit.

The 2021 bubble and the correction that followed yielded some lessons that founders need to internalize to continue raising strategic capital for their startups. How do I define strategic capital? One that brings more than money, a strategic vision that will make the company successful, without asking for overnight results or unrealistic expansions into new markets. Capital that comes with local knowledge to stay and not capital that enters in good times and leaves in bad times …

During the last decade, but especially in the 2021 bubble, unicorns became the aspiration of technology companies around the world, and the Global South was no exception. In 2020–2022 the number of unicorns grew in LatAm, India, and Africa. The companies that had worked for years on that goal are still standing today with good results that justify their valuation. Others became unicorns in a very short time without solid fundamentals, and after a while, fizzled out like fireworks. Those companies are now looking for debt so they don’t have to justify their valuations.

But let’s go back to the aspirational dilemma regarding being or not being like Silicon Valley. In developed markets, saying you prefer “camels” rather than unicorns can make you the laughingstock of the industry. However, in volatile markets, the unicorn model doesn’t always work. The ambition of wanting to operate like Silicon Valley in an emerging market is, in most cases, an illusion. Silicon Valley is not fully replicable in less developed markets (nor in other parts of the United States for that matter), and that has two results: the number of unicorns and IPOs will always be lower in volatile regions than in the cradle of venture capital.

Therefore, investors and entrepreneurs in emerging markets have to find their secret sauce for success. And we have it. Our innovation is closely tied to the challenges we have and how we solve them. No one can provide a better solution to a problem than one who has suffered or has seen others in their community suffer from that problem. So the challenges, always related to lack of access to financing, education, health, better roads and logistics, care of the environment, the need for upskilling workers, and the need for agriculture to upgrade and become more technological, become great opportunities to create technology companies that help alleviate these gaps.

Don’t get me wrong: unicorns will always be welcome, but as their definition says, they are mythical creatures and, therefore, not so common … The camel has a goal and goes for it instead of trying to run, exhaust itself, and only make it halfway, as happened to many unicorns recently.

The comparison of companies with camels indicates the preference of prudent investors to look for a company with sustainable growth and its feet on the ground. Ambitious, yes, but knowing how to map the path to success. Founders of camel companies focus on achieving stable growth, prioritizing financial stability and profitability, and having resilience that helps them be less vulnerable to crises and volatility. Because they grow this way, they can also take advantage of good times.

Let’s fill the region with camels and unicorns that become unicorns after going through these more sustainable stages!