VestedWorld couldn’t be more excited to welcome the newest member of our investment team, Nneka Eze. She joins us as Managing Director alongside Euler Bropleh and Jeff Stine to lead VestedWorld’s newest investment vehicle, The Rising Star Fund. She brings over a decade of experience working in Africa with Dalberg in Kenya, Senegal, and Nigeria, most recently as Partner, founding Director of the Nigeria office, and co-Lead of the Global Agriculture & Food Security practice. VestedWorld Principal Lavanya Anand sat down with Nneka to learn more about her background and what’s in store for her new role.
Lavanya: You’ve officially made the switch from consulting to investing. Tell us about your journey to get here.
Nneka: Early in my 14-year strategy consulting career, I worked on a number of agriculture projects in East and West Africa and also worked with a top Nigerian commercial bank and a top East African commercial bank. It was clear that traditional financial institutions and traditional financial products would not work for African SMEs that were not in trade. Interest rates realized by SMEs in Nigeria can be over 20% without government intervention, and in businesses with a 20% profit margin, this type of financing is not sustainable. Furthermore, longer-term capital was needed for businesses to achieve the next stage of growth in terms of revenue and jobs. At first, I thought that new financial institutions would be required to achieve this, and then I began working with portfolio companies of venture capital and impact investing firms.
Over the past seven years I have been personally investing in companies as an angel investor and via a venture deal that I structured while at Dalberg. During this time I have seen interest in investing in Africa grow, and I have also seen an increase in impact investing in Nigeria, Ghana, and other markets (with 4.7 billion USD invested in Nigeria and 1.2 billion USD in Ghana from 2015 to 2019). I chose work in emerging markets venture capital because I believe there is a significant mismatch between capital allocation and investable opportunities, and I believe that socioeconomic development is only going to be possible if that mismatch is addressed. I hope to help connect capital to investable opportunities that impact livelihoods and unlock African economic potential.
Lavanya: What are you bringing to VestedWorld and the investment community in terms of diversity?
Nneka: There are not enough women in executive roles in Africa and not enough women in venture capital or impact investing globally. I’m a black woman and an African woman and I descend from farmers. I have lived and worked in Africa for the past 12 years, and I’ve built a business in Africa. I plan to apply that experience as a new fund manager. I am bringing a depth of experience on the continent and across sectors — particularly sectors that impact the mass market (primarily living under the poverty line), my commitment to social justice, and my networks.
Lavanya: What are you most looking forward to in this role?
Nneka: I am looking forward to helping build African-owned businesses and creative industries. I wrote this statement as my purpose/calling at a leadership program I attended in 2016. I planned to “invest through a firm or my own fund” and to “accelerate SME growth” to “sustainably create high quality jobs and have a positive/neutral environmental impact.” As somebody who generally does not develop life or multi-year plans, the exercise required me to reflect deeply on my purpose and future. That VestedWorld’s mission aligns fully with my purpose and calling was a large driver of why I joined the firm. I look forward to seeing our mission and my personal mission continue to come into being.
Lavanya: What’s been surprising or challenging about your experience thus far?
Nneka: There are too many deals — and not enough capital. It’s not actually that surprising. When we look at the global allocation of capital, there is clear and systemic bias — Africa is a continent with impressive growth and returns, but it is underinvested in. Less than 1.4 billion USD in venture capital came into Africa in 2019. The number may sound high but that is less than 2 USD of investment per capita.
I am excited about our potential to scale VestedWorld with The Rising Star Fund. Given the market inefficiencies, we have an impressive pipeline and are ready to deploy the fund to an amazing group of founders. At a company level, I am impressed by the systems the team has put in place to manage the pipeline and the portfolio.
Work is much more self-directed than in strategy consulting, though having a team in my first time as a fund manager is a blessing and you are all keeping me focused on the important items (even without client deadlines!).
Lavanya: What are some investment themes you’re particularly excited about? Your experience is largely in food and agriculture but I know you’ve expressed excitement about the creative industries as well.
Nneka: I have spent the past 12 years working across sectors that have the biggest potential to impact African economies and individual livelihoods from agriculture to renewable energy, financial services to creative industries, education and employment, among others. I also spent years and many projects focused exclusively on agriculture and agribusinesses globally, across Africa, and in our focus countries.
Beyond a specific sector focus, I am passionate about investing in women and African founders. When looking at sectors, I am interested in two categories — the basics and the needs.
Food. Water. Health. Mobility. Housing. These are the absolute basics to live in this world. We need to eat, have clean water, move, be healthy, and have housing to live.
- When you cannot access high quality, low cost food, you do not have adequate nutrition and this affects all elements of your life including decision-making. At a macro level this underinvestment in food and food security is diminishing our intellectual potential. Agriculture is one of my favorite sectors because we must eat — it is critical to Africa’s development, often contributing 30% or more to GDP and 60% or more to employment in each country; and food has a central role in most cultures. The challenge is that while we have the most uncultivated arable land in the world — one of our greatest resources — it is not being used effectively. I am particularly interested in traditional foods and diets and food innovation around plant-based alternatives
- Particularly as the effects of climate change are more acutely felt in Africa, access to water will continue to drive conflicts and will become an even more precious resource for life and for food
- Health shocks are the largest risk to a household staying in poverty or moving back into poverty after moving into the middle class. Non-communicable diseases (NCDs) account for 70% of deaths globally and in Africa NCDs already cause many more times disability and reduced lifespans than malaria. As populations get older and urbanize, chronic conditions put a burden on health systems and depress household finances
- When you spend more than 50% of your income on transportation, you will find it hard to invest in the other aspects of your life. Having the freedom to move is also important to mental health
- Over 1 billion people live in urban slums globally and nearly one quarter of this number live in sub-Saharan Africa. The access to affordable, quality housing built with quality building materials — and coupled with that, access to toilets and energy — are a basic human right. Urban slums have deep economies and social systems and yet demand outstrips quality housing stock supply
Creatives. Education. Financial access. These are needed to thrive and grow.
- Creative industries explore the national heritage and the excellence in African cultures and African expression. There are both the innovative ethereal products (like music and film) and the harder products (like fashion) and there are entrepreneurs working for survival and working to build commercial success. African talent is untapped and the domestic and global markets have not yet seen the full creativity that could come from the continent
- Education is a human right and yet its access is constrained by similar concerns described above (quality, affordability, volume). Technology can help to democratize access to education and, importantly, train children and adults who exited formal education systems
- Financial access is critical to financial stability and wealth creation. The more we focus on targeting the same communities (primarily urban and peri-urban), the more we imperil our food security and put further population pressure on cities. Increasing financial access (while also deepening financial access) in addition to socioeconomic development and job creation can improve livelihoods and move populations out of poverty
Innovation, disruptions, and solutions from entrepreneurs across these sectors will lead to significant returns for investors and impact on livelihoods and lifestyles.
Lavanya: What are you currently reading that might be interesting to others?
Nneka: I grew up surrounded by books and working in my father’s Black bookstore from the time I was seven years old. I’m currently reading Women, Race, and Class by Angela Davis. I’ve been slowly making my way through the compelling re-telling of feminism and the suffrage movement in the United States taking into account the often overlooked experience of black women and poor women. While my favorite genre is fiction, I find non-fiction to be eye opening and important for opening minds and making change.