Abi Mustapha-Maduakor CA on the acceleration of African business
Abi Mustapha-Maduakor CA, CEO of the African Private Equity and Venture Capital Association, tells Kitty Finstad the acceleration of African business, particularly in technology-enabled enterprise, reflects an increasingly entrepreneurial mindset.
Of all the pandemic-defying success stories to emerge in 2021, investor confidence in Africa might be the most impactful – and impressive. With 319 VC deals recorded on the continent in 2020 – the highest number since this data was first gathered in 2014 – Africa is increasingly on investors’ radar. And for good reason.
Deals have been struck across healthcare, finance and tech-enabled consumer and service sectors, and the opportunity for growing businesses within the newly established African Continental Free Trade Area is attracting multimillion-dollar deals from investors worldwide. Which is where the African Private Equity and Venture Capital Association (AVCA) plays a major role in connecting and supporting investors in this exciting market.
Abi Mustapha-Maduakor CA has seen AVCA grow, change path and pandemically pivot since its inception in 2000, a roadmap which broadly mirrors her own multilayered career. When she first joined the organisation as COO in 2016 (she rejoined as CEO in early 2021), it was after a career in finance roles at RBS and Lloyds Bank in London, followed by a spell setting up an energy business in Nigeria as founding CFO. “I wanted to go to Nigeria and start up my business where I provided financial back-office support to small businesses that couldn’t afford an EY or a PwC. But somewhere along the line, an old friend convinced me to join him on an entrepreneurial journey to set up a compressed natural gas distribution business and be the founding CFO,” she says of the latter. “I thought, okay, this ties in my chemical engineering degree with my CA qualification and my background in banking. I hadn’t lived in Nigeria since I was a child, so that was exciting but also difficult. It taught me first-hand what it’s like to start a business in an emerging market, though.”
Despite its challenges, it was that on-the-ground learning and start-up experience that led Mustapha-Maduakor to her next role, as Special Adviser to the Minister of Trade and Investment in Nigeria. “I was focusing on private-sector issues, particularly SME development,” she says. “And given my experience of jointly trying to set up a business from scratch, I knew exactly where the pain points were, and where public policy could help to alleviate some of these pain points. So for three years I was involved in setting up some excellent programmes, which I feel very proud of.”
Shortly before leaving the role when the minister’s tenure came to an end, Mustapha-Maduakor began working on private equity and venture capital regulations, looking at policy, taxation and frameworks to enable private equity to take root in Nigeria. She then joined AVCA as COO. “It was fortuitous, because when I joined AVCA, I could look at private equity and venture capital, not through a public policy lens, but through the practitioner lens,” she says. “I thought it was a brilliant opportunity to be a COO – a financial COO, because as a small organisation we didn’t have an FD. My ICAS training came in very handy there – I could do everything from budgeting to fundraising to liaising with auditors and making sure financial reporting was in order, alongside the operational rigour.
“When I joined in 2016, AVCA was at a critical phase. We wanted to institutionalise and corporatise the business, to put in processes and controls. Yes we were small, but we had aspirations to be very institutionalised. And that’s the role I played – the obvious things like financial controls, compliance and risk management, but also operationally, ensuring we had all the right procedures in place such as an employee manual, GDPR… we just didn’t have that before.”
Alongside her COO responsibilities, Mustapha-Maduakor was also growing AVCA’s membership base. During her first tenure it expanded from just over 100 to 150, diversifying its income stream at the same time. As part of a risk management exercise, she realised that diversification was necessary to mitigate sustainability risk. “I needed to be innovative in finding other revenue streams so that if there was a shock to one side of the business, we would be financially diversified enough to remain sustainable,” she says.
Long-term vision is a critical component in AVCA’s ambitions for a prosperous Africa that is sustainable, inclusive and innovative. With a mission to promote and enable investment in the continent via private equity, venture capital or private credit, AVCA supports members (mainly fund managers, but also institutional investors and professional services firms) across four pillars: research, capacity building, networking and advocacy.
Mustapha-Maduakor stresses the importance of arming investors with data and intelligence to allow them to make informed decisions. AVCA produces eight annual research pieces that track funds, fundraising, deals and exits – a database built from scratch. “If you look back to between 2012 and 2014, there was some quite damning media coverage around the lack of data in Africa,” she says. “A number of print outlets were saying investors were going into the continent blindly because of a dearth of data. We now have a robust database of just under 200 fund managers whose deal activity we track, so we can tell investors which sectors are trending positively, where people are deploying their capital and which other players are on the ground.”
Combining this on-the-ground market intelligence with hard data and policy insights underpins the success of AVCA’s annual conference – the largest African private investment gathering globally. “Pre-Covid,” Mustapha-Maduakor explains, “we would move the conference to a different city each year to showcase the investable opportunities on the continent, and to dispel some of the misconceptions around investing in Africa. It’s also an opportunity for capital allocators, investors and advisory firms to network, connect and lay the groundwork for deals.”
In 2020, like so many businesses that cancelled live events, AVCA pivoted to digital, launching a new engagement platform. “It is our version of LinkedIn but for private capital in Africa,” says Mustapha-Maduakor. “It allows stakeholders to engage digitally, to post on the feed, to knowledge-share, to join community groups. It’s early days, but we’re confident it’s going to be a key continuous engagement platform of the African private investment ecosystem.”
It’s another element in AVCA’s three-tier connection toolkit: connecting institutional capital with fund managers (aka “capital allocators”), then connecting capital allocators to opportunities on the ground. With around $1obn (£7.3bn) in assets under management, AVCA members comprise fund managers, professional service firms and institutional investors representing foundations, pensions funds, development finance institutions and family offices.
This breadth of membership, and member type, is something Mustapha-Maduakor cites as a major AVCA success story. “Our institutional investor directory allows us to connect fund managers who are fundraising with institutional investors, thereby contributing to the ecosystem’s sustainability.
“Our conference has also brought in key investors, such as Chicago Teachers’ Pension Fund and New York State Common Retirement Fund, who have subsequently allocated to African fund managers. That’s something we’re very proud of.”
Mustapha-Maduakor accepts the lion’s share of VC deals go to the continent’s south, with South Africa topping the table due to its sophisticated banking system and infrastructure. “From a venture capital perspective, South Africa is the most buoyant market, with a lot of start-ups at different stages,” she says. “Kenya is interesting too; deals may be smaller ticket sizes than in South Africa or Nigeria, but volumes are high. It’s particularly interesting because of the rise of mobile money, for which M-Pesa set the path, and for agriculture and healthcare. We just saw a couple of healthcare deals that got investment, including Ilara Health, a medical diagnostics company.”
North Africa – Egypt in particular – is another region attracting investment interest, partly, says Mustapha-Maduakor, due to post-Arab Spring recovery policy: “There’s a huge start-up community and Egypt’s government is doing a lot policy-wise to support them and investors. One deal I really like is Trella, a digital logistics app that connects lorry drivers with shippers, creating huge efficiencies.”
Then there’s Nigeria, which, says Mustapha-Maduakor, “will forever be interesting just because of the sheer population size and the appetite of the consumer market. If you want to tap into a large market, you cannot discount Nigeria – there’s a massive and growing middle class. Fintech there is very interesting – six of Africa’s seven unicorns are fintech companies and three are from Nigeria.
“So it’s an incredibly interesting space for investors: fintech, tech-led consumer and service businesses, e-commerce… they’re all thriving here right now. Some of it is just good timing because of the rapid penetration of the internet, but it’s mainly down to innovation.
"So many businesses have been born off the back of the internet in Africa since the millennium and we now see a number of tech hubs across the continent with significant growth over the past four or five years. We’re also seeing a mindset change as consumer tastes shift – people appreciate how technology can create efficiencies and operationalise businesses across sectors.”
Conditions that make AVCA ideally placed to channel growth into Africa’s economy. As a CEO and CA with start-up, private and public-sector experience, Mustapha-Maduakor’s wide skillset means she’s comfortable solving problems and making tough calls, thanks in part to her ICAS training. “The training changed how I think and problem-solve,” she says. “I always apply an analytical approach, breaking down problems into bite-sized chunks. You acquire so many transferable skills as a CA that can be applied to any industry. I’m currently doing an MBA and, even though I completed my CA foundation years ago, it’s helping me now to study and formalise academia. My qualification also brought huge value to some of my past board roles. It’s been fundamental.”
Abi Mustapha-Maduakor CA is also co-founder of Black Women in Leadership Network (BWIL), a new UK-based not-for-profit aiming to increase the representation of black women in decision-making positions.
She is keenly aware not everyone has had her opportunities and support. “I’ve always been fortunate to be invited into certain rooms,” she says. “I got to a point in my career where I’d taken that for granted – until I hit the glass ceiling. It occurred to me if you didn’t have the right sponsorship or agency within your organisation, you could never move past that ceiling.”
Mustapha-Maduakor was able to navigate those challenges, but she saw others around her struggling. Talking with two friends, later her BWIL co-founders, led her to recognise the difficulties women of colour face in climbing the ladder: “We’re at the intersection of race and gender – we’re often forgotten and left to fall through the cracks.”
In a sea of awareness programmes aimed at tackling workplace bias, the issues black women face need addressing through advocacy, Mustapha-Maduakor believes: “We founded BWIL to realise our vision of a world where a qualified and competent black woman should have access to every single opportunity.”
As with AVCA, data is key to driving change. “If the first thing we can do is produce some research, to use that data to demonstrate how long, for example, it takes black women to get promoted, or a salary equivalent to white counterparts, we’d have a tool to have conversations with the right people. The lessons we’ve learned from AVCA help with building BWIL. We want to run it like a business – it’s the only way to be sustainable.”
ICAS training partner BPP offers An introduction to venture capital and private equity online course.