Many African tech entrepreneurs cite lack of access to capital as a major constraint preventing them from launching globally successful technology ventures. Though increasingly, global investors are beginning to take an interest in the continent’s technology scene, these investments are still few and far between. We caught up with one of the first Silicon Valley investors to invest in a tech startup on the continent, Tim Draper to learn more about his rationale for betting on the continent as an investment target early on.
Tim Draper is the Founder and a Managing Director of Draper Fisher Jurvetson. He is also the founder of the DFJ Global Network, an international network of early-stage venture capital funds with offices in over 30 cities around the globe. His original suggestion to use “viral marketing” in web-based e-mail to geometrically spread an Internet product to its market was instrumental to the successes of Hotmail and YahooMail, and has been adopted as a standard marketing technique by hundreds of businesses. On behalf of Draper Fisher Jurvetson, Tim currently serves on the boards of DoAt, Glam, Prosper, and Miartech. DFJ’s previous successes include: Skype (EBAY), Overture.com (YHOO), Baidu (BIDU), Parametric Technology (PMTC), Hotmail (MSFT), PLX Technologies (PLXT), Preview Travel (TVLY), Digidesign (AVID), and hundreds of others.
Check out our interview with him below and spread the word.
CP-Africa: You have a history of betting on regions early on at a time when many global investors do not actively see them as lucrative opportunities. What do you think motivates you to make such maverick bets at a time when other investors are wary of making such investments?
Tim Draper: I enjoy the adventure part of venture capital. I like to see change happen, and I hope to get the world to progress as fast and efficiently as it possibly can. There are seven billion people on the planet and until recently, (mostly because of bad governance, but in part because global communication was only available to a few of us, only a small percentage of us) were able to really have an impact on the evolution of the people. Now, with about half of the population connected in one way or another, we have unleashed the creativity to progress at an unprecedented rate, and anything is possible.
CP-Africa: You’ve made a few Africa investments and are arguably the most prominent Silicon Valley VC to invest in some of the region’s technology/tech related companies. What made you make that move to invest after being approached by the entrepreneurs?
Tim Draper: I really liked Tayo Oviosu’s spirit, and it was clear Africa was in dire need of a better, safer, and more convenient payment system. I took a leap of faith on Tayo and his team, and I am hoping for the best. We invested in YeePay in China when China had no electronic payment system, and that seems to have worked out very well.
CP-Africa: You notably invested in Lupita Island Lodge, a luxury resort on Lake Tangayika in Tanzania. What are some of your early experiences in Tanzania and what made you ultimately invest in the business?
Tim Draper: Tanzania is one of the most beautiful places on the Earth ,and Lupita Island is one of the most beautiful places in Tanzania. I had been to the Serengeti and Ngoragora Crater, and I was confident that people would eventually discover the place. I believe that by building a high end resort on Lupita Island in Lake Tanganyika that I could make travel to Tanzania nicer and easier for other investors and entrepreneurs that might help the region become a part of the world economy. I also had a lot of confidence in Tom Lithgow and his wife Belinda that they could accomplish great things.
CP-Africa: Africa as a region has very few global technology success stories. What do you think it would take to get more global investor interest in the African technology sector?
Tim Draper: I think investors need to see Tanzania and other parts of Africa and all it has to offer. A place like Lupita Island can help make that happen. I think African governments are starting to understand that free markets allow people the confidence to build something great without allowing someone to take it away from them.
CP-Africa: Beyond mobile telephony and mobile financial services, what other areas of African life do you think the mobile phone would help dramatically change the lives of people on the continent?
Tim Draper: Search, GPS, Bitcoin, the opportunities are endless.
CP-Africa: What have been some of your most memorable visits or experiences to the continent?
Tim Draper: I got chased by a cape buffalo and was able to outmaneuver it. I jumped out of a helicopter and landed safely in Lake Tanganyika.
CP-Africa: What advice do you have for African entrepreneurs looking to start globally successful technology companies?
Tim Draper: Build trust and faith in your governments, and your investors. People need to feel safe investing in Africa. Rule of Law and honest dealings are fundamental to progress and change.
Thanks so much for sharing your thoughts with us Tim!