The Information Technology (IT) entrepreneur and vice
chairman of Demo Africa 2015 edition, Mr. Chinenye Mba-Uzoukwu, has urged high
net-worth individuals (HNIs) in Nigeria to start investing in technology
startups, arguing that returns on investment (RoI) in technology businesses has
proven to be one of the most attractive in the world, reports ITRealms.
Managing director/CEO of InfoGraphics Nigeria, Mba-Uzoukwu,
noted that most studies have shown that rapid growth start-ups generate the
most new jobs in an economy and require the highest amount of equity risk
capital. He quoted Craig Mullett from the Branison Group as stating that a 2005
study of 37 countries showed that out of various sources of funding including
debt, private equity, venture capital and angel investor capital, “only angel
investor capital significantly positively influenced the propensity to be
entrepreneurs.”
While all successful entrepreneurial hubs such as Silicon
Valley, Boston, New York, Tel Aiv, Bangalore and Warsaw all have developed
angel investor networks, which incubated start-ups rely for financing, contacts
and strategy advice, Nigerian HNIs are slow in stepping up to create the
platforms and enterprises of tomorrow.
“Interestingly Nigeria HNIs appear unaware of,
disbelieving of, and/or uninterested in the latent potential of local
technopreneurs despite the relatively low entry barriers to investors and a
burgeoning start-up community. We recognize that the tech industry is still in
early stage development,” he said.
Mba-Uzoukwu also said that they must be intentional and
aggressively so in looking inwards if we are to find sustainable and uniquely
suited solutions to the challenges facing our country in the context of a 21st
century global economy. Demo Africa is a great step and a new class of
indigenous Nigerian investors must rise up and be counted because technology
offers the most realistic stairway to a brighter future for Africa.”
While informing that Demo Africa connects African startups
to the global ecosystem, he said the initiative “is the place where the most
innovative companies from African countries get a platform to launch their
products and announce to Africa and the world what they have developed.”
A successful entrepreneur with proven capability,
Mba-Uzoukwu explained that several options are available to potential investors
under engagement models, which range from business angels to venture capital
and private equity, for funding technology startups.
“Whether it is purely
a financial investment or a business decision to diversify business portfolio
or an eagerness to join the next big game-changer, it seems pretty obvious that
every savvy investor should have a technology company in his portfolio. Local investors who shun technology
businesses today will definitely see the earliest pickings taken by their
Western counterparts at ridiculously low valuations despite the apparent high
risk,” Mba-Uzoukwu cautioned.
While describing technology as the fourth wave that should
not be missed if Africa would hope for economic transformation, he likened the
likes of Konga and Paga as signposts of things to come with Nigerian
entrepreneurs requiring an infusion of foreign blood in order to scale in the
absence of local HNI interest.
He explained that investing in start-ups would soon be a
serious investment option from banks to corporate organisations and individual
investors. “By simple logic, if you have cash and have already made investments
in real-estate, shares, other financial instruments, gold and possibly your own
enterprise too, what can you do with any residual cash that you have? Invest in
a start-up stands out as a good option – given that Nigeria is now a fertile
ground for ideas and innovation, and being an entrepreneur is cool. And if you
are wondering if any have been successful, just look at Interswitch, Hotelsng,
M-Tech, IrokoTV, and Jobberman.”
According to him, the technology start-up industry has never
been more vibrant with ideas and willingness to tread the uncharted waters and
a burning desire to bring change to the communities in which they exist. “There is a smoldering fire in the eyes of
Nigerian youths that view technology as a means of self-expression,
actualization and a driver for creating the Nigeria of their dreams.
“Socially-committed,
deeply convicted and determined to see the fullest expression of their values
and ideas in the markets they have in focus. They want the double-impact – to
make it big and to make it happen. High net worth Nigerians should support
them. Look around you – there will be an entrepreneur near you and that is the
exciting thing about Nigeria. Therefore, if you don’t have the next big idea or
experience or inclination to start your own venture, you can play a part in the
start-up community by funding them,” he said.
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