Women in VC: How Nnena Nkongho is Building Africa’s Strongest Cohort of Founders
Women in the venture capital world continue to lack the support, space, and attention they deserve. In the US alone, less than 6 percent of VC firms are led by women, according to Women in VC. In other countries, this number is smaller.
At The Conscious Investor, this hits hard. This publication is founded by a female VC and entirely run by women. But rather than dwell on the paltry numbers we choose to celebrate the immense talent that is changing the landscape of venture capital—and, in turn, the world-at-large. In this series, Women in VC, we highlight women at the helm of venture funds across the globe. Their words, efforts, and honest takes are fuel for us all to take part in bringing real equity and inclusion into the VC fold.
Over her extensive career, Nnena Nkongho has always valued diversity — of thought, action, and experience. This is exemplified most recently in her work as a venture capitalist. Nkongho sees the role as an amalgamation of over 15 years of experience, leveraging more than just financial acumen to successfully support entrepreneurs. “Venture capital is an interdisciplinary activity,” says Nkongho. “In venture, you do some finance, you do some mentoring, you do some coaching. There's a strong people element, there's a strong legal element, and then there’s a marketing and branding element.”
Nkongho brings these elements together to support entrepreneurs in Africa, who have only recently started to benefit from the venture financing that has grown tech ecosystems in other regions of the world. As a Nigerian-American who’s worked and lived across Africa, she’s seen firsthand the life-changing evolution technology has played throughout the African continent. From her home in Nairobi, she recently spoke with Eva about her new venture fund Otundi Ventures, the differentiated approach she and her team are taking to assess values and culture within the founding teams they invest in, and the nuances of the recent evolutions of venture investing in African markets.
A Conversation with Nnena Nkongho
Eva Yazhari: Will you tell us about your journey into venture and how you came to be a general partner of your fund?
Nnena Nkongho: I'm a Nigerian-American. My parents immigrated to the United States, independently of each other, and met at the University of Oregon. They took us back to Nigeria for a brief bit in my late elementary years with the hope that we could live in Africa. In the late 70s and early 80s, Africa was just not an easy place to live. There were infrastructure gaps that made it tough for this little American-born family of Africans to survive, so we came back to the States. I was educated here, but I always knew that I would go back to Africa.
When I graduated from undergrad, I started to work for a global investment bank in Asia. What was interesting was how all of these businesses—and life—were changing with the advent of the mobile phone. That was around the same time the prepaid model phone was implemented in Africa. I started to see glimmers of these changes when I went on vacation to South Africa for the first time and on my more regular visits to see my grandmother in eastern Nigeria.
I then shifted my career to Africa, focusing on investments. I worked for a family office there, and then eventually went back to business school and started working for a fund. That fund was launched during the 2008 crisis, so we collapsed. But what was great was that I focused on telecoms, really the expansion of telecommunications and GSM across the continent. I remembered having lived in Africa without a phone, and now there was this amazing and expansive technology.
Fast forward a few years and I ended up working for one of the first, pan-African institutional vehicles focused on venture. There I took all of the skills that I had learned, the experiences, and the professional and personal relationships built across the continent to invest in Series A and Series B, technology-enabled companies. What led me to found Otundi was a desire to build upon my successful track record and invest in slightly earlier stage companies, focus more on teams, and invest more in female and African founders.
EY: Technology plays a giant role in your work.
I believe that the application of technologies is one of the single most important secular trends to hit the continent in the past 20 - 25 years. I have seen how technology has changed nearly every single aspect of life in Africa, either directly by providing services or disrupting existing service models. My grandmother was a farmer in eastern Nigeria, but not a very [successful] one. She would wake up at the crack of dawn to fetch water. She would then carry large containers of water on her head to the rocky soil of her small plot of land. Over the past five years, I’ve seen technology change the lives of smallholder farmers like my grandmother. I’ve seen businesses use the mobile platform to offer value added services — provide loans for better seeds, automatically irrigate land, find better markets (and pricing) for harvested goods. Technology enabled investing can transform lives. To me, that’s the most impactful thing that you can do.
It is also impactful on another level, which is also why I formed Otundi: this form of high-growth entrepreneurship, and these founders that are building these businesses, represent the future economic engine of Africa. Entrepreneurship is the engine of sustainable wealth creation and improvement of lives. So how do we make sure that the access to this ecosystem is as equitable as possible? We can do better in being more structured about making sure that women and local founders have access to the financial ecosystem powering these innovations, so we provide transformative opportunities [to everyone] to really build companies and build wealth.
At Otundi, we've leaned into the evaluation of people as a key input into the process. All VCs are also going to say they look for great founders, but if you ask them what that means, in many cases, it means ‘we know it when we see it’ and that tends to mean that not everybody gets a fair shot. What I'm hoping to do is consciously try to make sure that we evaluate people from a level playing field.
EY: That is an incredible story. Now, you're a VC and you're applying the strategy of access to entrepreneurship to your investment thesis. What does that mean in how you express that? What questions do you ask that are different from the questions that other investors ask to allow for equal opportunity?
NN: There are multiple levels. One level is sourcing. My team has explicit targets of trying to source 50 percent of our investment pipeline from female founders. We're currently only at 35 percent, but we are pushing to get to 50 percent. We are engaging with communities where we can find female founders and help them better understand that they, too, can access risk capital for innovation.
From a people evaluation perspective. I looked around as I was thinking about Otundi and I said, ‘How can I better select people?’’ Some of it is designing a process. The literature has proven that female founders tend to get asked risk-mitigating questions versus risk-enhancing questions. We designed a process where we are structured and consistent around what kinds of questions we ask founders of all backgrounds to provide them with equal opportunities to communicate their visions.
The other thing was: How can I be a better evaluator of people? I kept on coming back to the idea of coaches and coaching because coaches, whether it's a life coach, an executive coach, or a sports team coach, all coaches bring out the best in their people. I see the role of a venture capitalist as similar to that of a coach. What I thought was: What skills can I learn with respect to coaching that could help me understand founders better? What could help me ask the right questions? How do I help founders achieve more? So, our senior team has spent a year training to become certified executive coaches. During the evaluation of a potential investment, we spend some time engaging with founders and founding teams--What are your values? How do you work? We talk about conflict and use some of the active listening, questioning, and visioning techniques of executive coaches to try and better understand those founders and teams.
Otundi is a portmanteau word that means group or team. We are a team ourselves, an African team, looking to invest in other founders that are looking to build high-performing teams focused on building high-performing businesses that are great investments for our fund. We're hoping that our screening process helps us identify the key criterion to help us identify teams that we believe will do that. The challenge with venture is that everything's on a ten-year cycle. So we won't know if it’s 100 percent accurate until we see the results of Otundi’s first group of investments. But based on my past African venture experience, Otundi’s approach is worth betting on.
EY: There's so much wealth and value embedded in there for your founders, but as you point out, it extends to the due diligence process and your selection of companies. What are your thoughts on the VC landscape today? And are or aren’t women claiming more space?
NN: The VC landscape has different stakeholders. There are founders, there are other investors (General Partners or GPs) and there are capital providers to venture funds/investors aka Limited Partners (LPs). I really believe that the key to wealth creation is asset ownership. I really want to see and accelerate women owning assets and women making decisions. There has been some progress, and there's a lot more attention focused on the participation of women in the ecosystem. But the numbers still look pretty bad in terms of female participation across the ecosystem. While I'm encouraged by networks of people that are focused on these issues, and appreciate the dialogue and efforts of some to progress female participation across the venture stakeholder ecosystem, I don't think we need any more supporters who only bring good intentions. We just need more risk capital.
My comment to people in terms of female GPs is that (statistically) we raise much less money than the guys. Yet, we seem to work harder and longer for it. Men who have less experience than I do, for example, would likely find it much easier to raise investment capital. This also has an impact on outcomes because I might deploy my capital a little differently. So, if female GPs aren't getting LP allocations, we've got a limited ability to write checks and support founders. This in no way means that female GPs only invest in female founders, but we definitely bring a different lens to the significant venture capital opportunity. That’s important. I'm definitely encouraged by the increase in the number of female GPs, but I would just say we just need to raise more, more and more (and quickly)!
EY: What is exciting you right now? What are you looking forward to as you're closing your fund?
NN: If you asked me what’s the favorite part of my job, it’s talking to founders. And I get to be part of the transformation of my home [Africa]. I was talking with a cousin of mine and we were joking that many parts of Lagos look like Brooklyn today — full of trendy upmarket restaurants, cafes — even hipsters! We were both remembering when Lagos looked very different. More and more Africans are beginning to fully realize their own economic potential--and a large part of it is driven by technology and the innovations that it has birthed. I think that's super powerful. I hope that more Africans and more women feel compelled to fix things that aren't working, to provide services where there were none, and to come up with solutions to global problems — it doesn't even have to only impact Africa.
That’s my why: I get to be part of this journey alongside founders. I get to offer perspective. I get to wear multiple hats, as I said, from being the financial advisor, management consultant, legal associate, and most important to me, mentor and coach. That is super stimulating. The challenge is to figure out how one can do it differently (and better) than anyone else. So, it's changing and it’s evolving, but I definitely think that this job, at least as I do it, is about relationships and building the venture capital ecosystem in Africa.
To learn more about Nnena Nkongho, visit otundi.com.
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