The Global South Opportunity Views From The Ground – March 2024
Highlights
The geo-political unrest around the world can make it easy to slide into a pall of gloom. However, as history has taught us, markets march on even in the most difficult times. We see no evidence of a slowdown in the forecast USD 9 Trillion in Global South GDP growth that the IMF expects over the next 5 years.
In my last update, I offered our outlook for 2024 and the impact of GenAI. For this quarter, I’d like to share learnings from Capria’s leadership team that has been spending time on the ground with portfolio founders and local investing partners. We’re also building new relationships in the Middle East which is becoming an increasingly interesting expansion point for some of our more advanced portfolio companies. We’re pleased to share our insights and learnings from recent travels below.
Capria Partners’ Views from the Ground Q1 2024
Susana, Surya, Sandhya and Will – The Gulf Cooperation Council (GCC): Between the four of us we’ve made two trips to GCC states in the first quarter of 2024. The region is a strategic focus for Capria in building new long-term relationships as well as extending the strong relationship we already have with regional leader investing partner Global Ventures in Dubai. We expect to spend considerable time in the GCC over the coming years.
Insights:
- The GCC is attracting not just GPs but all kinds of collaborations for business growth and is keen to build partnerships across the board, beyond funding. One must look at the region not as a fundraising pit stop but as a region with a strong and diversifying economy, deep connections to the fast-growing but currency-challenged economy of Egypt (home of one of our most successful portfolio companies, PayMob), and a substantial growing and rapidly-opening market in Saudi Arabia with a population of 36 million. The region is also making it easier to do business with the goal of attracting the best of global innovators.
- Generative AI is as hot a theme as anywhere else in the world with the UAE being the first country in the world to have an AI Minister. Many of the startups we met during the ‘Investopia’ event in Abu Dhabi are already using GenAI technology.
- It is common to hear investors talking among themselves in the halls of a conference and agreeing that it is already very difficult to consider investing in a startup with no application of GenAI in their business model as competitors embracing the technology more quickly could walk all over them.
- That both Abu Dhabi and Riyadh are transforming to support major startup ecosystems is visible from the sheer infrastructure being built, from indigenous VC and PE funds being created, and the increase in the number of “not just investor” events and business reforms being put in place.
There is a significant increase in the number of women investing and playing a key role in decision-making. Women in key roles across the board are beyond surface level as is indicated in this article – the CEO of Wisayah (Aramco’s fund vehicle), the Board Member in the Saudi Central Bank, the Chairperson of Tadawul (Saudi stock exchange), the Chairperson of SAB (HSBC group affiliate in KSA), the Saudi Arabia Ambassador to the US and the CEO of Mishaal Aerospace are all women.
Susana – Bogota, Mexico:
Mexico – In several panels in which I spoke during this first quarter, one could appreciate the growing importance of Mexico as a tech hub for Latam. As few as five years ago, Brazil had no other market in the region presenting serious competition. This has changed now. Mexican fund managers are investing throughout the region and welcoming entrepreneurs from all over Latam to choose Mexico as their home. This has increased the tech adoption and level of technology in the startups. There are fund managers who are already in their third or fourth fund, showing results and sustainability. Some entrepreneurs have started more than one startup, showing the growth of the ecosystem. As proof of the growing importance of Mexico in the region, Brazilian fund managers and companies are opening offices in Mexico because conquering Brazil alone is no longer enough. Now you can paraphrase the famous Frank Sinatra’s song and sing: “If you can make it there (in Mexico and Brazil), you can make it everywhere (in LATAM VC)!” It’s very timely to note that the two main tech hubs for Capria Global South I & II in LATAM are these countries.
Bogota – We’ve been watching it for 6 years – it keeps growing as an entrepreneurial hub. Although Colombia lacks local VC funds, this is compensated by funds established elsewhere (mainly Mexico, Argentina, Chile, and Peru) investing in the country. The actions by Bancoldex (private-public arm of the government to spur innovation and private capital investments) to promote the VC industry are supporting these regional funds and trying to spur the creation of local ones. There are an increasing number of players entering such as corporations and family offices.
Mobola – Nairobi:
The vibrant energy at the 2024 Africa Tech Summit held in Nairobi last month is a testament to the resilience and determination that defines the African spirit. Amidst the bustling corridors and engaging sessions of the conference, one resounding theme stood out: Africa’s tech renaissance is in full swing. From cutting-edge fintech solutions bridging financial inclusion gaps to AI-powered agritech platforms transforming agriculture, the summit unveiled a tapestry of innovation with the potential to truly transform the life of the average African.
Yet, beyond the conference halls, the true essence of the summit was in the networking sessions and one-on-one conversations I had with founders, fellow investors and other ecosystem players – all united by a shared belief in Africa’s potential as a tech powerhouse despite the current macro challenges. These interactions underscored not only the depth of talent but also the collaborative spirit driving Africa’s tech ecosystem forward. I look forward to returning to Nairobi next month with great anticipation.
Surya and Sandhya – Hyderabad:
Hyderabad’s charm extends beyond the Charminar and delectable biryani to its booming venture capital scene. While real estate and IT have been the traditional economy drivers, the city is now seeing the evolution of a savvy VC ecosystem, attracting smart investors. During our recent visits, we met passionate entrepreneurs and extremely sophisticated investors which is the right pulse check for what is to come. We also visited T-Hub, a key stop, symbolizing the city’s entrepreneurial spirit and helping realize its potential. With a blend of funds and brainpower, Hyderabad is ready to drive transformative innovation on a global scale. We are keen to be a part of this growth story and the opportunity it presents and will continue our effort to build deep relationships in this city which is known as “The City of Pearls”.
TRAILBLAZERS in our Portfolio
Complete Applied GenAI Portfolio
310 AI
Protein design using GenAI.
Ascend Vietnam Ventures
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5C Network
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AI/ML, B2B, Diagnostics, GenAI, Healthtech
Agrofy
Leading B2B ag-inputs & equipment marketplace for farmers and suppliers in LatAm.
Capria Ventures, SP Ventures
Agtech / Food, B2B, Climate, E-commerce, GenAI
Aitomatic
Industrial application engine that incorporates human expertise & industrial data to deliver AI solutions at scale.
Ascend Vietnam Ventures
AI/ML, SaaS
Betterplace
Premier enterprise HR management solution for the blue collar workforce.
Capria Ventures
GenAI, HRtech, Jobtech / HRtech, SaaS
BharatAgri
Improving farming outcomes through personalised data-driven services advisory and e-commerce.
Capria Ventures, India Quotient
Agtech / Food, Climate, GenAI, Logistics, Sustainability
CareerNinja
AI-Powered skill learning built on top of internet’s content bank
Capria Ventures
AI/ML, Edtech, GenAI, Upskilling
Citysense
Cloud-based platform that provides the infrastructure and tools needed for the development of scalable smart cities.
Angel Ventures, Fen Ventures
AI/ML, Retailtech, SaaS, Satellite imagery
Classera
Gamified learning management platform powered by AI to encourage social learning.
Global Ventures
AI/ML, Edtech, Learning Management System
Colektia
Software platform that helps financial institutions create new digital collections models based on artificial intelligence.
Angel Ventures, Fen Ventures
AI/ML, Debt Collection, Fintech, Fintech Infrastructure
