Savannah Valley need not copy Silicon Valley

Arielle Molino, Sub-Saharan Africa Lead at the Sankalp Forum. [File, Standard]

I really loathe the term "Silicon Savannah". While it rightly speaks to the leapfrogging that Kenya has seen towards the fourth industrial revolution, it feels a bit like an adolescent imitation.

Why do we feel the need to compare ourselves in this market with Silicon Valley? Why does the only measure of success seem to be "how much you've raised?"

While many venture (VC) capital funds and impact investors are trying to make returns "doing good," it's not enough for Africa's entrepreneurship potential. The VC model leaves too many businesses .and entrepreneurs out in the cold, desperate for funds.

Many are quick to say we need to build a better capacity of entrepreneurs - which is true - but we can't lose sight of the importance of good governance, solid business models, and financial management.

We can, however, flip the question and ask, why aren't more investors meeting entrepreneurs where the entrepreneurs are? Why are entrepreneurs the only ones expected to be innovative? This calls for more innovation from investors in the region.

In my opinion, the issue is around the paradigms of venture capital, which was developed in the United States and works for markets there. The US accounted for 49 per cent of the $683 billion (Sh86.4 trillion) invested globally and 40 per cent of just over 40,000 VC deals.

The US also accounts for a little more than half of all unicorns (privately held startup companies with a value of over $1 billion or Sh125 billion) globally in 2022 - compared with Africa, which has seven out of roughly 1000.

Many people will say we need more local sources of funding. While it's true that we need more local funds in a changing landscape, Africa is the last frontier - it oozes untapped opportunities.

So, the issue is not with where the money is coming from, it's the lack of innovation that can make the money work for other contexts.

When the early VC model was developed in the US around the time of World War II, it was innovative.