Polo Leteka is the co-founder of Alitheia IDF, which recently announced the closing of a $100 million fund. With the firm’s focus on backing female entrepreneurs it now positions itself as Africa’s largest gender-lens private equity fund by value. The firm currently has investments in Ghana, Lesotho, Nigeria, South Africa, Zambia, and Zimbabwe. Leteka is also the founder of the I’M IN accelerator and seed fund and has also been a participant in South Africa’s version of the “Dragons Den” TV franchise.
What tech opportunities are you paying attention to with the newly closed fund?
With lockdowns across many African countries affecting people’s ability to work and trade or for children to get an education, we’ve seen people and businesses starting to pivot and use online sales platforms more frequently. I think Covid has accelerated the adoption of digital services that you could argue are essential services. We’ve seen edutech businesses that were struggling to break through suddenly seeing adoption of these digital tech and educational tools that go with it. It’s the same with health. There was early hesitation with using telemedicine but there has now been significant adoption. We think edutech and e-health are certainly going to be part of our daily lives going forward. With the growth of marketplaces there is also a growing need to solve for logistics, warehousing and last-mile delivery on the continent.
How do you position yourself as an African investor: private equity or venture capital?
We try not to confine ourselves into these boxes that the world has designed because it makes sense for them. The reality in our continent is firstly we don’t have deep enough capital markets and we don’t have enough solutions for the problems we’re trying to solve so we’re forced to be innovative. It doesn’t matter what you call it, what matters is unlocking the potential that you see. When you do business on the African continent you need to be very innovative, creative and flexible.
What is your pan-African investment thesis?
We are very keen to invest in businesses that operate across many countries in Africa or have the potential to expand. We now have the African Continent Free Trade Agreement which promises to unlock up to $3.4 trillion in trade. We, as African countries, don’t trade sufficiently amongst ourselves so promoting intraregional trade and unblocking the barriers is very important to unlock the economic powerhouse that Africa should be. The framework is there now, the role of a fund like AIF to make it work practically and commercially viable.
What are the biggest challenges facing leadership talent in African tech startups?
One of the big lessons we have learned is that just because you’ve come up with a business idea and you’re the visionary doesn’t mean you have answers to everything. We often say it is important that an entrepreneur has a teachable spirit. When you invite investors to take equity risk in your business you have to be willing to be able to accept feedback both positive and negative. Related to that is the belief that you should be in every role, you need to resource accordingly and build a team that has the best chances. We don’t always find that entrepreneurs are willing to do that as they may want to hold on to as much equity as possible. But I also think in the tech space a lot of people read what’s happening in Silicon Valley and just cut and paste when it comes to conversations around valuations here in Africa. They forget Silicon Valley is in a mature, sophisticated economy with much bigger pocket sizes. It really becomes a problem when you’re negotiating and there’s very little willingness to adjust for the African context.
How are you hoping to support and fund more women in tech
We’ve already funded two women-owned tech businesses. We are in, and of, the market. We’re very well networked across all sectors of the economy because we’ve operated in these markets for a very long time. We don’t struggle to find women because we’re in those networks already. That’s the importance of having diversity in any team. Women entrepreneurs are out there and want to talk to people they’re comfortable with.
*This 3 Minutes With interview first appeared in the Rest of World weekly newsletter. Sign up here.