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Ken Njoroge — transcript

The Dream to Build a Billion-Dollar Company for Africa, by Africans | Ken Njoroge AfriCAN Do! Ep.4

This transcript is generated automatically by YouTube and has not been checked by a person. It misspells names and mishears words, particularly around Kenyan English and company names, so read it as a guide to the conversation rather than a quotable record. Each timestamp opens the video at that moment.

0:01 [Music] uh good morning uh once again welcome to episode 4 of African do podcast uh today it's my pleasure to have with me uh a good friend and serial I think he's one of the guys who is worthy of that title serial entrepreneur Ken jog founder of many things um we're just talking earlier about three M um but more recently cellulant which which has grown we'll talk more in Greater detail about cellulant but cellulant morphed into many things and now does many things and now um I think Ken 30 or 4.0 is a New Journey of working with entrepreneurs to do many things so Ken jog welcome thanks Leonard good to be chatting again yeah uh so Ken maybe let's let's go to the beginning and I just just to give people a rounded feel of who Ken is and where you're coming from yeah you while you you may have worked a little at the beginning you're one of the I would say

1:11 earliest Tech maybe you even now can take the title Godfather of Kenyan Tech because you've been in the tech space for a very long time and after a brief stint working a few for for the early isps you then went on your own maybe just walk us through what that Journey was uh first with three miles and then into seland and then we can take it from there yes no no very good journey even as you you yeah you you you you give a sense of that Journey you you do like a quick rewind of the of of what a long journey it's been yeah so yeah it was in the late '90s I think I I I probably started working in '96 uh I was a student then at uh uh and and they had just introduced the IT program a couple of years before so I was one of the early Pioneers in the IT program in in stratmore and then um then I got a job with uh uh one of the with sub subsequently with two two isps in the

2:19 early days one interconnector used to be on Valley Road yeah um and then uh then I moved to foret and where I was responsible for a team uh that was building a web solutions for the first customers you know once customers got connected then they needed to figure out Beyond email what else would they use the internet for yeah uh and then around that time I met uh the guys who then became my co-founders in the first business was uh Paul kuo and Betty um and we got together and was easy to see that the internet was going to be a big thing so in 8 we started uh three mon uh and some we were just early uh folks that build websites for $20,000 these days you can do those things for $200 yes yes yes um and so and we built a business and a team and uh quite a reputation around that so we so we launched in 98 and we ran that for a one and then uh 2000 the year 2000 uh the

3:20 business was acquired by Africa online which was the largest ISP at the time okay so Africa online acquired three mil yes correct okay yeah that was a very good journey because it was a my first introduction very rude introduction to transactions basically the transactions of buying and selling businesses and and what matters at the time and then um and then joining the Africa online Group which was also started by a he was quite a Visionary entrepreneur and um and it was a new Division I was involved during the transaction we took a liking for each other it was very nice and uh watching this young entrepreneur dreaming about building a business business across Africa and at that time Africa online had grown to to about 12 countries Capital um so that was very interesting and then they they had gone to school in the US ivy league so it was very nice to watch that hang on actually

4:15 the the were super smart but there was they were not too different from uh some of us who had not been out of the country we had sort of been born and bred and educated here and you're like actually if they can do it we can also actually do it so that was quite an inspiring period so three M was bought but you st when three M was bought by Africa online you stayed yes it was not a buyout and you take your check yes and go home so you stayed as an employee stayed on the we were part of the group uh the brand remained the same uh but actually about two years thereafter uh we bought it back because Africa online got got acquired by a company called African leaks mhm uh which was a landed listed company the ownership and the leadership changed quite substantially around that time uh so and then Ai and the some of the original founding team

5:05 left shortly thereafter uh and then it just didn't feel quite the same so uh we eventually span out we bought essentially bought a business back uh with a pay with a plan to pay back the original uh the African Lakes folks um and and then we went independent again for a while okay yes wow so you like you rightly say you had quite an immersion into transactions very early because you run three miles for what 3 4 years uh and then you sell uh and then you buy back uh the same three miles from So You began to see this world of buying and selling companies rather early yes and uh not uh not with a lot of knowledge at the time I was a tech right so I I in in in those days was so early in my career I I just enjoyed writing code that's what I liked and uh but you know you paid attention to the transactions and got a sense of what the basic Essence

6:04 was um I think if I now knowing what I know now with a lot of school fees and a lot of sort of bad deals done uh over time i' would probably do some I'd probably structure it some somewhat differently okay but as I say you know hindsight is 2020 was very I was still very early young young and early MH uh so I think it it just gave me a a set of exposure some kind of exposure so ear in my journey that was very valuable as I as I built cellulant okay so now you've um you have taken three miles back but how do we get into cellul land so what happens to after you take three miles back you you run it or what happens to three miles or do you reach a stage where you walk away or how does it evolve how does the the journey evolve from there yeah that was a very interesting Journey so actually the you know so somewhere there I shifted my career so I I I'd uh gotten tired of uh

7:06 writing software or rather made a decision that look um I think writing code was great but I think I wanted to to evolve into something something different so I had shifted my role to working along with the sales guys to just try to understand these things that we build and these things that we do do they really actually make a difference the customers because I had this Instinct that if you are not creating that much customer value uh then then then the business wouldn't grow you wouldn't be able to charge uh top dollar right because you know you could only go even in those days it was very easy to see that websites doing websites and all those kinds of things was not going to be like a 20,000 per project kind of thing forever you could see the prices crashing competition coming and so on so we needed to find a new gig and I figured look let me follow the sales

7:55 guys uh go into customer meetings and listen and and we happen to be very fortunate some of our early customers were safaricom and Kel at the time mhm and that was a really interesting eye opener because where whil on the in Internet we were talking about 5,000 people connected to the internet in Kenya yeah uh projected to grow to like 20,000 in 5 years or something of that sort yes um the mobile operators were growing by hundreds of thousands of customers per month yes so then I started to really imers into those businesses it became very clear somewhere very early that actually most of mass Market in Africa will be connected on mobile phones yeah so it was very clear to see wow that is such going to be such a big big platform a big much bigger platform for us sort of port a transform and transfer what we were doing into that kind of platform so I formed a small uh group um uh like a

8:56 like a little sort of research group in the team with three or four really good guys and and uh we created we had this thing called Cod cellulant mhm uh so it was a little Rd project for just studying what was going to happen in the mobile space uh because I thought that that that was essentially sort of three M's future yeah um so so I did that for about a year and it was uh you know towards 2003 it was kind of very clear to me at that time that actually mobile was going to be the future everything you saw on the internet would come to mobile including the internet itself would come to Mobile in one form or another we didn't know how yeah so it became clear I became completely convinced actually that that's what cellulant needed three M needed to evolve into uh but we just that it wasn't particularly a clear enough vision for for everybody else to board right so at some point I think we

9:55 came to a crossroad which is saying in which I felt that okay we either transform to mobile or we don't have a future yes um so because it wasn't a shared view I think in the end what we do did is we basically made a uh a deal in which I span of uh cellulant M uh with a a small part of the team and then trade traded off my ownership in in in three mon in three mil back to my co-founders and another mini transaction another mini transaction there yeah yes and uh and and so that was uh so we we spun off uh cellulant uh and at that time i' made made friends with bology who then became my co-founder yes uh of course the original when I met met him the original thing that we were discussing was expanding you know three m in in West Africa and so when we span off celant I said hey you know if you like that three M Vision I can introduce you to to my co other

10:57 co-founders because they going to be running that uh but if you like the mobile space then you know let's there's another story here there's something new here uh and so and then then you know this is really about relationships with people we had already become good friends so we did a mobile thing together uh and then I said okay he had a job and he was providing a lot of the initial sort of startup Capital by way of his credit card and so those days cards didn't swipe online so yes so you could you knew different sports petrol station show supermarkets and so on where you could actually overdraw the Dum card yeah uh so we did that and then at some point we said hey you're Nigerian I'm Kenyan yeah maybe we should do this thing in both countries so okay so I moved to Nigeria for a bit okay uh to start celan there so so that's so in a sense celant was kind of born by two

11:52 co-founders you know Nigerian and Kenyan and and I started the business in Nigeria he and then since he's he had a job in Kenya he he stayed in Kenya for a while to kind of mind and move along so interestingly that Kenya goes to start in Nigeria the Nigerian is holding for in Kenya exactly it was a very good journey right because I think it worked it wasn't by Design but it worked because you know as Africans were very welcoming of visitors yes so it was very like I could I could meet CEOs I could just call and schedule a meeting with a CEO in Nigeria uh than I could in Kenya okay yeah because we'd have a a story that okay look I'm a Kenyan this is what we're doing this is what we're building and so on I'd like to see the CE of MTN uh and they're like okay so you're coming from Far surely you must you must you must have something you must know

12:45 what you're doing yeah and it was quite a very interesting Dynamic and I saw this obviously as over the years as cellulant expanded into many countries I found it incredibly welcoming it was very nice actually a as a Kenyan doing business in Africa you always were welcome people are helpful it was very interesting because you're now out you're you're you're an FDI you're foreign direct investor yeah yeah but also I think actually it was more out of curiosity yes I think uh Kenya surprisingly I found it has had a very good brand okay as a country for for professionals and so on and so forth uh and people thought positively about it and they always thought that it it was always an innovator country so you went to Botswana you went to uh Zambia and so on and you are kenyaan and and you had built a good brand people looked you online uh the way you branded the

13:44 way you communicated and whatever seemed interesting you got an audience okay uh and then people love the idea of Africans building a multinational across Africa like it was a very interesting thing so snow it's exciting yeah yeah yeah so that was that really worked well for us so what what is cellulant selling at this time you because you've sold cellulant has sold many it has evolved at one time I remember earlier I think when I first met you ringtones were a big thing so you you you've decided to get into this mobile space but you got in to do what to to to do mobile content okay so we did the news entertainment news on SMS yes uh and then and then um ring tones and and uh eventually they became music downloads when when we started to have data and we started to have phones that could play music uh but it was rington those little sort

14:41 of things really right and we sold them for about a dollar in those days okay so so You' call a mobile operator and say this is what we do with we we're content provider we are looking to build a you know a really large multinational business across Africa in Africa Africa for Africa by Africans that was always the Mantra and people give gave you an audience you you prepared well you went presented they're like this is new we haven't done this yeah we surely yeah do you guys have a contra draft contract we say yes for sure and then we got got connected so we built our footprint across a couple of markets uh just uh doing SMS news and music and ringtones uh actually for the between zero so so 2003 four five maybe six were very difficult because the regulatory uh environment did not have space for us yes so we typically went into a country uh sold to

15:41 the mobile operator and then went out and educated the regulator on this particular space eventually they made space for us so the first three four years were near-death experiences right I mean hard right like you you have almost no revenues you got this pipeline of projects that are either delayed by a mobile operator or delayed by a regulator and so on and so for it was very tough and then the young family yes had just started and so on uh very important to have a supportive spouse aged who buys a dream because uh I think that's a crucial element of of of of uh the support system you need in the very early days because you know you don't have you you you don't have financing for the business generally means also you don't have financing for life right you got young kids all of that so so first uh few years um mobile content eventually the business picked then by 2008 we were already like4

16:40 million $4 and A5 million business and but just took off ramping yeah uh and then in 2008 I think you know between 2002 you can imagine right so get acquired by AF 2000 it's about like you're building right the business is still very small um then you transition it's a journey of starting again and then you're fighting with Regulators you're going into countries you're you know you are hunkering down and building uh I think we got a first validation 2008 when we became the top midsize business okay KPMG remember that top 100 top 100 yes and that was a complete surprise yes uh because you know we had generally had our eyes down just building um and then of course now it it had become clear we had built but I was never i' never had a you know we had such an ambition for what we wanted to build so even at 4 and5 million we didn't think that it was substantial uh

17:41 but going into top top 100 you know they done data and so on so you could actually see how you ranked people yeah and also blue Chi brands that you typically saw around and so on and so forth it was for the first time were like oh interesting actually like we are building something here uh the fight and our life doesn't reflected because you generally been in the trenches fighting trench warfare in the early days um but well yeah that was quite a special special evening and you also Fel you also you are also Gathering a lot of knowledge because you're in multiple markets you're dealing with Regulators in Nigeria I'm sure there other African markets and you're building kind of a Rolodex of this networks contacts corre who of course would continue to serve you into your future so you you now 2008 you you you see this validation yeah you you're now in top 100 you start

18:36 to look at the business of course a bit differently so where do we go from there what yeah I think at 2008 I think what happened um at that size you we started to be able to afford to pay uh to pay salaries to pay ourselves at least you know I know I know that I could predict that yeah my salary might be a week late but there'll be a come yeah so that uh that really enables the family and enables the household in in very many ways but also in the business it also enables you don't worry you're not worrying about salaries anymore uh so a lot of that time now you start to think really about the future like you know what were we trying to build uh and we clear we wanted to build a billion dollar business in Africa for Africa by Africans and was a reason why we wanted to build that big I think in my mind I just thought that look you know as young

19:28 Africans I grew up in a single parent uh household I went to fairly modest primary school high school I always saw a lot of dysfunction around me you know schools and all of that like nothing really works so as so as an African you develop a sense of anger sense of angst about the state ofs yeah and then you're like surely like is it what is it something wrong with us like so I think cellulant for me was uh and that size building for that size was a way of just proving that surely we must be capable of doing something really well yes the conditions are going to never be ideal but that's those are the cards you've been dealt right you you know you all you say you win a poker game with the cards you've been dealt right not the cards you wish you had yes so I said yeah maybe if we could we could build that big we could prove to ourselves and also to young

20:21 people that worked at cellulant also that actually we don't need to be mediocre we can Aspire we can dream it doesn't really matter where you come from yes things will be harder they take longer than normal but you can actually build and you can build at the highest level possible M so you start to think about what that business needs to be so it became clear that uh when we looked at the future and so on it became clear the content business was good and could continue to grow yeah uh but but I was not sure that we would be able to defend that position especially uh my thoughts were and our thoughts were you know that mobile operators would essentially eventually come into the business yes which eventually happened yes so we decided then you know maybe we should pivot into Financial Services um and so so around 2008 uh 2008 we started to really think

21:15 hard about financial services researching looking at stuff and by the way there were little sort of financial services opt things going on uh there was some little mobile money stuff going on in in DRC yeah there was a company called sell pay which was you know they were using mobile wallets to pay I think government workers or people in the Army yeah uh there was a company in South Africa Co visit like there were little little sort of to to Bubble yes and then we found uh then then I think even as far back as 07 there was a empor which was a small pilot in Tika like you could see all these things you're like okay I think there's something in Mobile Financial Services it wasn't very clear what so we decided actually that yeah maybe actually we should get into that and we started talking to Banks uh so by 2009 I think it had become very clear that Mesa was coming

22:07 it's coming and Banks really got scared and then for about a year year and a half we've been talking to Banks about mobile where it's going financial services and so on so we seemed to kind of understand some stuff yeah so when empa it became clear this was going to be a big phenomenon and it became a threat to Banks the banks then really had a sense of urgency to develop a mobile strategy so we just happened to be in the right place at the right time and then we got very lucky uh a couple of the multinational Banks one in sart standard CH to be exact took a leap of faith on some of the stuff were building and and they went to Market first and you know and and and when and the with the ussd mobile banking uh star 722 hash which was a thing then and I think once that happened then because we had generally been talking to most banks we had name recognition uh So within a very short

23:04 period of time we almost became really the defacto provider of of those kinds of solutions transferring to Essa with Pioneer all of those things and and that for for for the next 10 years uh or so really defined phase two of cellulant uh so which is switching from M you know selling music to mobile operators and then actually becoming a financial services business which was really it was a long journey mhm uh and those um Solutions were exciting enough to really build a name around right yes music people used to find it it was an interesting fun fact yeah yeah in cocktails they like you sell music you sell music yeah wow they're like then people would be surprised at how big the thing was yes but uh banking I think uh you became more mainstream I became a little bit more serious so that was quite nice for the brand and then because we had built a footprint um so a lot of these Banks and

24:03 essentially went with us to most of their markets so so we expanded very quickly to like 13 countries and then and then then we also became the de facto provider for for multinational Banks so Standard Charter then kcb then eventually uh bay Absa stroke Absa followed and Standard Bank Stan oh wow and and and so all the top names so you you you pioneered that space and and you you brought it to life but now 10 years you've done that Financial Services you you then decide that what did you see that made you say okay I I'll need to go and get more money if I'm to continue this journey of building this billion dollar uh company for Africans by Africans yes yeah we took our first investment in 2011 yes uh first in investor was a investor called TBL Mira Fant uh it's a fantastic lady called elen elen yeah um and and and we had been talking on and off I think for about five years or so

25:12 so she was she had built a fund uh and and she was looking for investing she was investing in different companies uh so s was an interesting investment for for them so for me I was kind of learning right so trying to learn the and all this sort sort of space of professional investors so I talk we talk and talk and then at some point she'd send me a time sheet i' look at this time sheet I'm like ah what are all these things what are you telling me why would I why would I sign this thing why would I sign this thing why would I want to start asking for permission to hire and all of that stuff and so on which were which are generally like standard terms in a in in in in in uh fundraising uh so we do that dance we did that dance for like five years I think when we started to now expand across markets beca became very clear that uh you could not just bootstrap that business anymore because you you

26:07 needed to go into a country yes you had three customers but you needed six months of Runway to get the projects to Market and then to get them to generate Revenue to support a team and so on and so forth so it was very clear that to grow we needed Capital so we did uh we started raising Capital around uh that time and actually since then we've got done a a ser of rounds um I think the the most public one was series C yes uh in 2018 the big one uh that big one yeah and that was I think it was very uh it was a such a tough fundraising fundraising round right beyond the headline you know people would see the headline and you actually took time off from your business to do that thing yes it it took about two years to close wow uh for some reason I all of my fundraising uh efforts at cellulant always happened at difficult times in the market yes uh so I've missed the

27:02 booms every time we've done financing we've missed the Booms that happened right yeah so there's a couple of the there's been a couple of booms maybe one large one 21 22 um but we did 2018 in 2018 you know it was a$ 47.5 Million round it was the largest investment in Tech ever uh today if you raise 50 you you I think you struggled to make top 10 yes uh like the market shortly open thereafter right and that particular one was led by tpg was a quite a very well respected uh Financial investor fund out of the US uh and were they investing in Europe IM Maring markets and everywhere so so the business has taken about now1 122 $123 million of capital um so so so quite a long journey from the $1.5 million exactly Ser a by the way it was Ser a this days Ser a is $6 million $8 million like the market was really opened up but what was interesting I remember when we did that

28:13 Ser C uh there was a I was working we our you know we were in the our offices were in the D seat complexes yes and so I met as I walked there was this young guy stopped me he just told me that thing was very inspiring because it was it's a a raise raised by somebody that looks and talks like me yeah right which was very so that i' never really there was a lot of noise and still there's a lot of noise about um the sort of face of uh uh Kenyan investors kenyaan entrepreneurs who actually raise Capital yes I think Kenya has this uh interesting phenomenon where you have a lot of expatriate yes um Co Founders and co-founders and and and will generally raise capital I I I I I I think it's my view fundamentally positive uh because the country is hospitable enough to uh to have people start businesses and businesses uh I think what is tragic is then that uh uh Kenyan Founders would

29:20 feel disadvantaged being in their own country or being in an African country agreed um and then the way to remedy that is you know Capital like to understand and and to be understood uh you know me and you if we have gone to 844 schools there's a way we understand each other yes uh there's a way there's a a thing even with my own kids in their final years have sort of gone to different education systems there a there's a a different way that they see things and so on and so forth so there's always that divide right if if I've been to to an Ivy League school and I meet an Ivy League investor there's a level of understanding alignment and and trust that travels faster and so the only way we to remedy that not to complain too much about uh uh that expart Founders get funded uh the way to remedy that is actually to raise a lot of uh African Capital yes uh if you do

30:14 that it will Pro most probably go to Africans yeah so 2018 you you raised but H I think I can rightly say having known you that 2018 was whether you knew it at the time or not not was the beginning of your last phase as a in cellulant operator yes yes because I think how soon after did you step down H as CEO of sand yes I I Ste down I wrote to my board in 2020 yes so two years later October it was yeah uh and and and I I wrote that email when I was in lamu uh because what happened my my dear wife she had looked at me I'll give her context she had looked at me and she just looked at me and she said man this thing is going to kill you uh you you've got to leave and you got to leave now like she gave me no choice I really thank her for that foresight because actually a few days before that I had not had a wink of sleep wow um now when I look back in hindsight it it was

31:26 actually a series of very different difficult years so we had 2016 was a collapse of Chase Bank mhm they were essentially our primary bank and you know by then we were Financial Services operational payments business uh so your working capital facilities and all of that are really integral to the they're the lifeblood of the business when when the bank uh collapse then you know those lines dried up and we had to cut cost deeply we had to just Mone that situation quite tightly otherwise it would have killed us uh so that was like a onee battle of just trying to stay a flat right like that particular thing was existential the company it doesn't really matter how big we had built and we had built a company that was supporting customers in 13 markets now uh I think by Revenue probably $12 million business at the time uh so like you know like that could

32:25 just disappear so it was very stressful and then after that then then you know once we got past the crisis we needed to Capital I just show up the capital of the business so I got on the road uh at a time when the markets were very tough uh so 2017 I'm raising Capital it's a whole year right yeah one year you know when you say it it's very short but in actual fact I I started off a journey with about 60 investors uh so at the end of one year they they year there were four that were kind of lukewarm they were still not committed uh so you can imagine there's 56 investors who have said no so that's a lot of rejection right like typically you would get a no almost every week and that is punishing right because you've been building this business for a long time uh you know that uh yes there's a lot of stuff that you need to fix uh but you know that you built something and

33:23 you got a A Dream and you can now see speculative like you can actually see Financial servic is going to be big we can build 1002 200 $300 million Revenue business here uh so hearing no from investors who look at many businesses you doubt yourself a lot like it's very punishing like you know that fundraising traveling schedule uh and so on and so forth now typical sales people they they they're used to hearing noise you know I I've worked with sales people who typically will go out of two meetings three meetings here no no no and then in the afternoon meeting they're bringing their aame together for an entrepreneur we are creatures of our dreams true when somebody tells you the thing doesn't make sense like one investor in a cockta told me you $12 million business after how long I just says that's not an investable size that's probably a good business for you and your

34:18 your was a in a cocktail setting and then he walked off so you know you're kind of left in the room like in the middle of you're talking to a guy you're left awkwardly in the room like it was very punishing so I do that and then then we've got a committed investor uh and then they're very th with their due diligence due diligence takes like a year wow and then during the due diligence like the deal is also sometimes it goes through moments of wanting to break sh because we've discover discovered some tax problems in Zimbabwe or Malawi or somewhere yes right like all kinds of things so very stressful uh we Clos in 2018 and then 2019 the terrorist attack happens that do it yes yeah where you had your offices it's not in anyone script yes so there we were generally like you know h i mean you just it it's just unimaginable yeah right you just can't yeah and so that I

35:22 think if I look back it's probably to just to it was Heavy yeah it was very heavy uh you know for all of us in the team uh but for some reason it gave me determination to go now all this time I've not quite taken leave like I mean I don't know what I was thinking just in the gr like yeah there just it just seems like there's just one fight after another so you get over a fight and then you just energize yourself you're like luk man like so 2019 I couldn't take leave uh and so and then 2020 Corona uh covid first couple of months yes you know that was mentally tough for everybody uh and so by then you have not quite healed from 2019 and then 2020 we we suffered a massive fraud in Nigeria uh and then eventually my my co-founder then left under very difficult and unhappy circumstances at the time I think when my co-founder left uh for me that was a last thing you're

36:29 like no I'm like this dumb thing has taken too much from me now yeah even my boy has gone man now here this thing so so I took leave immediately after that so that is how my wife ended up I ended up in this one week where I had not slept a win my wife told me this thing will finish you it'll kill you dead she says uh so I so I that's that was uh that final th I wrote my board we made a plan I ended up uh jumping off the lion uh in in April 21 and you sent us an email I remember you sent us jumping off the line email which was quite cool we wrote yeah we wrote it together with Kenna who's uh who's one of our co-founders at at Pani now let's now segue into P because me I like PNY PNY is a great story and uh um I don't know if the General market like I say and I don't say this lightly when I call you the Godfather of Kenyan Tech because you are

37:36 man even visibly the things that you've done I know you speak about them rather uh not flippantly but you speak about them as events but they are really big things in the context of what this Market is and I remember when uh you sent me the py deck to read there's something I read the whole deck very well put together but I remember one of the statements that you made that really caught my attention as an African entrepreneur is you said that you spent 22 years yeah building a billion doll African business and you succeeded yeah in cellulant uh but when you reflected back on that billion dollar ER business 80% of the value that you built in that time span exited the continent was not domiciled here and so one of the things that you set out from for p was that P will build African businesses and share this diverse knowledge that you've gotten whether it's dealing with businesses regulator

38:46 fundraising and all those things I think kind of I think it's it's a culmination of your experiences which are very diverse some of them very early you know transactions you are doing uh as a relative young man you know and you've done you've been that transaction space for a while so maybe now introduce P to us and tell us what PNY is and where it's going yes no it's very interesting uh I I think the Journey of cellulant was was was a very interesting Journey so what are the lessons I brought into cellulant when I when I came from three my son what lessons do I take from cant as I build as as we've built P the last few years so so three s me that actually you can work hard get good customers but the business itself doesn't make money right like it doesn't sustainably make money over a long period of time so when I came into cellulant I was a tech but I

39:46 paid a lot of attention to how the business made money business model and so on uh and so where if you do that then you create value I think the thing that is uh still a learning point is how do you how does that value get realized in terms of how does the business eventually get listed or get sold uh and and at times in the market and so on and so forth I've seen the value fluctuations from the market like the business is kind of the same uh but in one setting investors will value it at this much in another setting investors will value it at this much it's very that has been a very uh very interesting and Rocky journey to kind of watch uh in cellular and especially now that I'm sort of outside looking in um so how does then most of the value get shipped in most of the value gets shipped because of its source of capital right as the business grows um if 90% of

40:40 the capital uh comes from outside the continent then most of the return will actually go out out of the continent that's just how it works um and um and so the way to retain less Capital to to retain more of the value on the cont is to is to raise them the least amount of capital that you need to without undermining the growth of the business uh and then to make sure that that little Capital most of it also comes from the continent right like that we ourselves are sort of investing in the in the in the in the business the first fund uh which invested $1.5 million uh most of the investors in that particular fund were retired European CEOs uh um so it's very possible to then say you know a bunch of uh Kenyan CEO SE level entrepreneurs can actually put together a fund to write those first 200,000 300,000 400,000 checks to to the startups and hopefully as those people are investing

41:47 we are growing the knowledge of of investing on the continent and that can Inspire let's say the institutional corporate Venture Capital fund some of the companies that generate profits to start to put put away a little bit of corporate Venture Capital uh and then some of our Pension funds actually start to put a little bit of their of their investments in the Venture so so that's what Pani is about so when we built pan We Came From The sellent Experience just saying okay how do we uh build a model for working with Founders and with founding teams in a way that they don't repeat the same mistakes we made right so we were very fortunate in our but also we made some stupid mistakes and and and and and some of them were really hurting they really destroyed value uh some of them we were very lucky that they were not fatal that you could

42:40 actually take the Heat and and and and uh and move on again but some of those mistakes we don't the next generation of guys uh and and when I look at the market there's a bunch of investors but there's a small class of investors who will build businesses that are bigger than sand for sure mhm M um actually in the story of C I now have found out the last few years there's maybe about 50 entrepreneurs who came from cellulant okay um I am certain about two or three of them have businesses that are bigger than cellulant today oh wow they were Excel emplo were either Engineers or people running countries and now they went and they founded their businesses some of them 10 years in uh and so on and there some of them have larger businesses on Sand which is very interesting so the next generation will build bigger better and faster uh so if you can

43:33 theoretically take away a little bit of the few fatal Mistakes by you know coaching mentoring in a very structured way uh and then make sure that some of the early checks and some of the early Investments actually come from us uh with our patience with our knowledge with our Network in the market um you know a business that has three or four sea- level people or five se- level people that are invested just has has has much more reach in terms of its Network in the continent yes uh so that's what P does we wake up every day to spend time with entrepreneurs uh we are very passionate about two types of entrepreneurs there a technology entrepreneurs very much like me uh building in in the payment space in fintech in e-commerce in e-logistics E supply chain and then we also very passionate about other entrepreneurs in the Journey of mentoring we had entrepreneurs uh we were just talking

44:27 about Spar the cering who you known very well you've mentored as well yes Esme and and uh and K and I also have mentored over the years and we've accumulated a group of those kinds of entrepreneurs we just grown to love and they have the same struggle as the tech entrepreneurs uh they have probably less access to Capital than the tech entrepreneurs so we are basically building a platform for mentoring these guys and and for funding uh these entrepreneurs uh with with African Capital that is very longterm that's very patient and that's very flexible in in in in dealing with the the the volatility of African markets I'll tell you what excites me about py um and from the beginning and I am an aspiring investor as my financial as my financial circumstances change expect a check from me we reserve a seat res a seat for me um but what excites me about p is something that I feel has lacked

45:34 for the African entrepreneur I I find that the world is rather brutal on the African entrepreneur that there are some things that we almost not allowed to do you know and uh you you actually speak very candidly and honestly about those things yeah and there's a lot of value in your journey as I listen to it now um speaks a lot about your mistakes you know and how you make them but I also feel that you're building an environment that shares knowledge you know and that knowledge is not the technical knowledge of writing code yeah but it's that knowledge of um of um the emotional toil you know the emotional heach the mentoring you know the tough conversations yet despite them being tough they still need to be honest so that you can genuinely build a business that has a lot of value so that's my admiration of of what the journey that P is on but do you feel that uh as you

46:42 have gone through this journey of trying to raise African Capital um do you feel that there's a disconnect between African intellect and knowledge and African capital M yes I think so I I think if [Music] you the thing is this is that um the one thing that you see across the continent it's been true for a long time um I mean we are world class in every way probably probably just the way we we vote is an issue just that if we could solve that yes you generally find uh expertise Clarity uh good intentions and so on strong values yeah everywhere so in that way um I'm a significant Optimist You know despite all of the the big the big issues I think uh look in terms of capital uh I think we need to pull our Capital together you know just just in in looking at at Capital I just the one thing that is very stuck it's just we just don't have Capital but also it's because we also don't have

48:02 generational wealth yes uh that is just a reality uh I remember when I raised um you know sirc um I went all the way to San Francisco and I thought that okay surely this like $50 million uh I mean I was going to meet a CE of the fund of the fund that was investing in Africa at that time and I thought that well these guys are going to grill me the whole afternoon m $50 million uh but you know the CEO was there for half an hour uh like you know who are you guys yeah tell me yeah tell me a little bit about yourself and what you guys are building and in half an hour he was like I like these guys let's buck them um that is it's it's not that that guy is smarter than the average guy here he just has a lot more Capital true and $50 million is 30 minutes worth of worth of his of his time yeah and by the way before then the the actual money I

49:06 needed was like $13 million at some point they told me uh listen dude no one's going to get out of bed here for $13 million you go figure how you how you raise more money that you can do 50 then it's wor our time yeah so it's not that they smarter they just have access to more pools of capital so we have to start somewhere because these ecosystems have been investing in in businesses for a long time so we just have to start but you know what you you know you start with what you have where you are and so when we we started P I said well maybe uh you know we could put together like a sort of private placement kind of vehicle uh with 99 investors and and pull together $5 million to invest in small companies it's uh I've been raising for two years i' would say maybe 30% of my time spent talking to investors uh we we are halfway there I think we in another one year we'll close

50:10 M uh it's it's not uh it's it's it it it took me one year to raise 50 in the US taken me three years to raise five like we don't complain we we build it what is most important is actually if for those investors who've taken that leap of faith uh we can continue to build trust and so on a better still actually deliver return uh then I think it will just be easier now to raise the next round and we probably raise it much bigger much faster and we got to do that and probably in that process just like it happened in cellulant you know when cell raise if you look at the number of startups in Kenya I think the number I saw is about a thousand now yeah yeah uh when we were starting s they were not there when you look at how much Capital has gone into the thing it's foreign Capital but how much Capital has gone into the startup all of that is school fees it's educating Engineers it's educ

51:05 entrepreneurs and so on and so forth educating the market that lawyers and transaction advisor and the rest all that is very good the ecosystem so when you're building the ecosystem it's a patient game you you need to find a corner that you build you just make sure we build well so for us I think if we can over the next few years return $50 million to those us yes that's fantastic it's going to light the ecosystem on fire so we just have to focus on doing that learn also cuz it's a new gig right you're very you're very you're very Visionary Ken in that sense you kind of as I listen to your story starting from three miles you've kind of seen along the journey things ahead of the market and I think this one is a big one and the reason why I say it's a big one is because when people realize because the the undervalued asset I think even in

52:00 conversations when we talk about expatriate Founders versus local Founders I think we are still on a journey which you're now leading with py and investment on defining the value of local context yes you know that guy who 30 minutes of his time of of his time was $50 million what's the equivalent of that and you're very well placed I think to walk that Journey because yeah because you're able to see it and so I I as a betting man I I would say this one I would you would buy I I would buy one sh bu that horse yes yes uh yeah yeah we have yeah we've I think we've got about uh 40 seats yeah we we looking for about we've done 60 investors we're looking for another 39 to be exact okay um so it's been generally nice journey of educating or building quite a nice Community um so yeah so that's a that's a nice thing no I okay so um so how many how many maybe we can talk just briefly about those

53:04 that you can talk to us about the businesses that you're currently working with in P that are part of your cohort yes so to speak we have mentioned SP which is one that we were involved in together uh but there are other businesses that you are working with this diverse entrepreneurs yes and how that journey is going and the valume they are finding by having you uh and K by their side yes yeah that's very interesting so so we have uh essentially two mentoring platforms there's what we so there's what we call Pan Pani 101 so that's that's a community of people that are investing in Tech in the tech businesses that we mentoring and so there we have uh we we have quite a cohort of businesses we we're mentoring and then we've invested in some of them uh and our model is the way we do is we typically mentor and coach for about 9 months or so before we invest okay so we build the

54:02 relationship the trust and all of that as a coach as a mentor um before solving the problem of capital at the end you know again just just like you said you know capital is important but the local knowledge that local Nuance the foundation and so on is so important so we invest in that first before we actually start to commit investor Capital uh so we've mentored a bunch of uh businesses so we um the first one we invested in was Market Force which was quite a rough right right yes yeah uh then uh then the market for Founders uh went through a very tough time the business model and that particular sector really sort of uh collapsed uh but the entrepreneurs fighting Spirit they pivoted into uh into a business called chapter they basically sort of marged uh with another set of really brilliant two brilliant and Founders and they and they became a co-founding team of four and went into

55:01 chapter and and organized themselves around that and carried us with them in as a Market Force investors into that vehicle so we invested in that Journey uh we invested in a business called letter uh their automating Logistics and so on uh so those are the the three businesses we invested we also had an opportunity to invest in cellulant which is kind of a safe investment uh for for for our investors okay and then we're coaching others we are coaching a business called Co Coachella they are Tech Exel and Tech Guys another business called imali uh they're doing embedded travel insurance wow uh we are coaching another business called forite Tech group they infos uh company and then through the safaricom um fund uh we are in we are sort of mentoring Chie another which one spark fund yeah the spark fund the accelerator so we are we are a mentor in

55:58 the in the in the in the spark fund so we are mentoring Chie and we're mentoring um another business called nobuk and then through endeav also mentoring another business called s so we so we we we we Mentor that whole group at some point we will we we we we make investments in some of them and then the second mentoring platform which is very interesting is called commini uh and so this is like a platform for everybody else they don't need to necessarily be Tech MH uh and so that's where people like Esme are Spar yes uh and and and and there actually that that platform has gone quite quickly yes and it's h we are developing a model for sort of scaling the mentorship platform so we can actually reach more entrepreneurs uh so the last I think two or three months we've recruited almost I think 23 wow uh investors in entrepreneurs into that platform and I think at some point we'll develop an

56:56 invest model for them because they are really investable businesses in that particular platform so that's what keeps us busy no I mean Ken um for me what what I think here is here is what excites me other than just the potential that P poent for the market the fact that we have reached a stage where we're now sharing knowledge and I think that's been The Missing Link you know uh um when I study the African ecosystem you know um you would even argue that you'd be told don't say too much about what you're doing because but now where we're getting to a landscape where people are able to be open to share the experience don't go this way because you might struggle with this that or the other and to see you um using your knowledge and expertise to now bring some formality to that so that uh you can you can grow is a journey that we'll continue to watch

57:53 yes so I'll give you a chance to give us maybe a parting shot and just say anything um it's p. Africa is that p. Africa p. Africa check it out if you're a young entrepreneur looking for um with an interesting business that you think has potential uh check it out and I think it's a great uh space and ecosystem and I bow down to you for taking the lead and sharing your vast knowledge in this space don't know if you have anything to part to say to the viewers who are growing day by day no no thank no thanks for for this conversation I think uh you know your journey also inspires me a lot uh Leonard because um I I mean you're in this journey you just have to keep going right like every every season you carry the lessons into the next season and so on knowing also that as Pioneers it'll it you know we have to lay the foundation and so on that's is really uh back breaking work true uh but

58:58 but we just have to do it we have to share the stories which is what you're doing on this platform and and also we have to continue to Mentor in even in the places where we are sitting in advisory boards together exactly yeah we have to continue to do that work exactly so that we can build this Market into something the things so I'm appreciative of that journey and and thanks to to your listeners for sharing the time so ladies and gentlemen thank you join me in thanking Ken jog always a vibrant conversation with him building amazing African businesses and H watch that space for the next 20 to 30 years and and and see what P will will will give the market thank you very much for your time this last one hour and we look forward to happy having you in episode five asant Sana thank you [Music]