May 5, 2022

Investing made simple: How daba is enabling retail investors to fund African startups

Meet Boum III Jr and Anthony Miclet, co-founders of daba, the all-in-one tool for investing in Africa.

Countless journalists and thought leaders have expressed that Africa is the future and that there’s no better time than now to invest in the continent.

Consequently, many have read articles and heard talks and felt empowered and excited about the continent’s future. But few people have successfully transferred the energy received from the written or spoken word into actions that impact the continent. 

While awareness and inspiration are important, platforms that allow people to invest in the future they believe in, and enable participation in what some refer to as the biggest financial opportunity of the next 2 to 3 decades are needed more now than ever before. 

Fortunately, daba, the all-in-one tool for investing in Africa, is making this possible by allowing people to invest in some of the most promising companies in Africa from the palm of their hand. With a vision to become the premier financial app to invest and trade in Africa for investors at all levels, daba is building the financial infrastructure that will safely drive capital into the African markets.

I spoke with Boum III Jr and Anthony Miclet, co-founders of daba, about their journey from coaching African entrepreneurs for free to creating a financial services platform; their experience visiting different startup ecosystems during their recent trip to Nigeria, Ghana, and Ivory Coast; and the value proposition of daba to startups and investors. 

From Afrika Startup Lab to daba

With Afrika Startup Lab, we were helping entrepreneurs build better pitch decks, tell their stories, close deals, and create strategic partnerships. Connecting with entrepreneurs and hearing their challenges, we saw their need for capital. But most of the entrepreneurs didn’t have the “right networks” or go to the “top universities,” so they were having difficulty raising capital.

At the same time, people were emailing us daily saying that if you find exciting startups, please refer them to us. Consistently receiving these messages, we began to think about how we could evolve our effort into something beyond coaching. While coaching is nice, access to capital was the most pressing need for many entrepreneurs and the barrier to implementing some of our coaching recommendations.

We started exploring business models that added capital allocation as a service within Afrika Startup Lab (ASL). At one point, we had a running document of 48 business models, but trying to do everything within ASL was creating tension within our business. We eventually realized that we couldn’t have the financial impact that we wanted under the cover of a nonprofit. We needed two separate entities: ASL, which focuses on free entrepreneurial support, and daba, a scalable investment platform that drives capital into African opportunities.

When will daba be available? 

In 6-8 weeks, we’ll be launching our invite-only beta. We have about 750 people on our waitlist who have pledged to invest close to 3 million. But initially, we’ll be inviting 100 people to experience the platform to gather some feedback. We’re currently waiting for our first license to be issued. daba is on its way to becoming a full-fledged financial SEC and FINRA regulated financial service provider.

Why should investors trust the startups on daba?

As an investment adviser in the U.S., we have a fiduciary responsibility to act in our customer’s best interests. And by not doing so, we’re breaking the law. Also, the success of any investment platform, especially in the private markets, is tied to the users’ success.  

Since information is not as readily available in the private markets, investors will rely upon the information we provide to make an investment decision. So if we want to build a successful investment platform, it is our responsibility and in our best interest to make sure that we create a platform that people can trust.

And we do that by ensuring that our vetting protocol is thorough and that we list quality companies that meet our user’s investment goals to the best of our ability. We have developed an internal listing protocol with senior investment professionals with decades of investment experience. They helped us define how to source companies, perform due diligence, and create standards for daba listed companies.

We are also creating partnerships so that the deals listed on daba have most times been invested in by a notable investor with a track record of investing in successful companies. Whose diligence or vetting we can trust before performing our own. So we’ve developed multiple layers of checking.

Note that investing is still risky, so users are responsible for conducting their own due diligence. But as a platform, we will do our very best to ensure daba only has quality companies. 

How many startups will be available on daba?

We’re looking to list 15–25 companies this year. We do have a strong pipeline, and once we launch daba, we anticipate that there will be an influx of more companies wanting to be on the platform. Finding 25 quality companies won’t be our issue. Instead, the number of startups listed this year will weigh heavily on the capacity of our team. We are still a startup ourselves. We don’t yet have a large team of investment professionals like established VCs and private equity shops.

6 weeks, 3 African countries 

It’s one thing to read the news on the different outlets about the fundraises happening on the continent, and it’s another thing to be with the entrepreneurs on the ground and feel the energy. The energy in Nigeria, for example, is through the roof. The entrepreneurs are hungry, and within 24 hours of being there, we understood why Nigeria is getting that much capital. 

Moreover, we traveled to Nigeria, Ghana, and Ivory Coast in November and December 2021. Our purpose for going was two-fold. We wanted to better understand what’s happening in Africa’s tech ecosystem. And to send a message to those we are working and collaborating with that we care by coming to learn more, absorb the culture, and see how business is done.

We built Afrika Startup Lab as a fully digital organization where we worked with and served people that we had never met. And it’s pretty incredible when you think about it. But when you’re building something as delicate as an investment platform because you’re dealing with people’s money, you have to show face. 

Connecting online is great, and it’s possible to create ties over Zoom or Google Meet, but there’s nothing better than meeting in person and showing yourself on the ground. It shows that you’re intentional about impacting the ecosystem, not just saying it but yet staying in the U.S.

Also, there are many differences between the markets, and many of these nuances are difficult to verbalize. You’ve got to see it. You have to watch how people move around in the street, listen to how people talk, and see the challenges that people are experiencing. That context is critical. And as a platform that’s going to act as the intermediation between capital providers and capital seekers, we must have that context. 

Lastly, 90% of our daba team members are based in these countries, and we want it to continue to be that way, so it was also great to meet them in person and build a stronger culture internally.

A variety of approaches to investing in Africa

Our goal is to make it easy for users to onboard and invest in African companies.

Pre-built portfolio: If a user doesn’t know how to get started, we’ve built pre-built managed portfolios for them to invest in. During onboarding, we have an optional assessment test to tailor the investment experience based on the user’s interests, investment goals, and risk tolerance. 

Build your own portfolios: Users can also build their own portfolios. daba is also a social investment platform whereby you can follow other investors and their trades to help index what type of investor you want to be. 

Invest in tech startups: As I mentioned earlier, we’re looking to have 15–25 startups on daba this year. As we add startups, users will be able to view all the daba vetted companies and invest in the ones they either believe in or match their investment thesis. 

Invest in public stocks: Via daba, users also have access to the public markets. They can invest on their own in publicly listed companies on the Kenyan, Nigerian, Ghanan, and South African Stock Exchange. 

Message to investors

The ultimate message is that Africa is the future.

A few years ago, Africa’s GDP was under 700 billion, and we were mocked as a continent for having a GDP equal to that of Belgium. Today we’re at 2.6 trillion, and Belgium is still at 700 hundred billion. If we were to drill down and look at venture capital being invested in Africa, it’s growing at 50 to 100 percent year over year. In 2021, tech startups raised $5 billion compared to 2.1 billion the year before. 

And we’re so far from our potential. Investing in Africa today is like investing in bitcoin 10 years ago or Google in the 90s. We’re at that inflection point where things are about to accelerate. And what we’re doing with daba is bringing the opportunity to your fingertips. We’re making it easy and safe to invest in Africa, so don’t miss out on this opportunity. 

And remember, unobvious returns are made in unobvious markets.

Lastly, together, we can also change the narrative about the continent. Having Africans globally invested and involved will bring more awareness and increase the continent’s opportunities. 

Message to startups

Regardless of their size, private tech companies should embrace daba because we can help them raise any round, from seed to Series C. We intend to streamline the capital raising process and maximize outcomes. Currently, we can raise 5 million every 12 months for a single company, but eventually, that will grow to 50 million. 

Please note that we’re not aiming to replace how founders raise capital today, instead, grow the capital availability by complementing the current sources of capital.  

Another point of value is visibility. If someone isn’t in the VC world, likely, they won’t know what new startups are raising funds. Via daba, startups can access a wider investor audience and build brand awareness.

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