Sahil Lavingia is looking to invest in more African startups

"My plan is to invest millions of dollars into Africa over the coming years. I believe it is the future", says Sahil Lavingia in a chat with Benjamin Dada.

Sahil Lavingia is looking to invest in more African startups

Sahil Lavingia is not a popular name in Africa.

Yet, if you have been following the news, you might have come across his name as one of the investors in Cowrywise's pre-Series A round.

In our Cowrywise fundraise post, we dedicated a short paragraph to explain who Sahil is.

Sahil is the Founder and CEO of Gumroad. He is also an early-stage startup Investor cutting checks in the range of $100,000-$250,000.

Little did we know that we would get a chance to speak with him directly. So, this post is our chat with Sahil Lavingia.

I know Sahil. Founder, CEO and Investor.  
How would you describe yourself and what part of your upbringing has shaped you the most?

I’d describe myself today as a creator. A writer, painter, coder, designer. I like making things from scratch. In terms of my upbringing, I was born to Indian immigrant parents in New York, grew up in Singapore, then moved back to the States for college.

So, I don’t really identify strongly with one national identity. I try to keep that in mind as I invest—I care about people making things better for other people no matter where they are based.

What’s your perspective on investments in startups and why did you choose to play at the early-stage as opposed to growth or later stage?

I think the early-stage is where the creativity happens. I want to watch stuff go from zero to one. It’s also where the returns are.

The hard part about early stage is getting comfortable placing a lot of bets, early, and being able to raise capital from LPs to do so.

Stereotypically, Africa has a bad reputation across the world.  
What inspired your first investment in a startup from the continent? And did it help that Cowrywise already went to YC and is a Delaware company?

Being a Delaware company does help. Every startup should do that for a variety of reasons, easily googleable.

YC is nice because it means the company is setup in all the right ways, but that didn’t play a role when I invested. I’m not sure I knew.

What I cared about: big market, clear GTM strategy, and a beautifully designed, well-built product. And the founder’s personality is always important too; can they hire a great team and motivate them to execute.

Commentary: Cowrywise attended YC in 2018, about a year after they launched. They were in the Summer batch. Being in YC means you have to incorporate as a Delaware company.
Read this: For foreign startups, all roads lead to Delaware.

Also, take a look at the list of Nigerian startups that got into YC's Winter batch of 2019 and 2020.

So, what’s industries are you most excited to look into (AKA invest) in Africa? And do you have specific favourite countries?

Kenya and Nigeria have shown up on my radar but I think wherever there are enough buyers of a product, there’ll be investment interest.

I’m partial to Zambia because I’ve spent more time there. I cannot wait to take a trip to Africa after the pandemic is over.

In terms of industry, I like pretty much everything, because I believe every part of our economy has room to get a lot better. Ecommerce, future of work, payments, logistics, shipping, b2b, and more.

That’s interesting. Fintech is hot in Nigeria and across the continent

Yeah very “in” right now but if you think about it it’s just the economy—moving money around.

So of course it’s huge, it just has a new name. Housing, healthcare also massive, though I know much less about it. It’s much easier to invest in software from abroad, in terms of vetting the product and understanding the market.

So far, what has been your best investment?  And what startups from Africa are in your portfolio?

My best investment in terms of absolute returns is probably Bitcoin. Or Stellar.

Startups-wise: Clubhouse, Notion, Figma, Lambda School, HelloSign, Movable Ink, Vercel are all doing very well.

In Africa I have two so far: Sote and Cowrywise. I would love to do at least one per quarter. So, four a year. My plan is to invest millions of dollars into Africa and India over the coming years. I believe it is the future.

The USA is great but doesn’t deserve 99% of the capital.

Is it a case of the USA being over-funded?

I don’t think it’s overfunded, but other countries are underfunded. That’s quickly changing with Zoom and Covid, making it more acceptable to do deals from afar.

If you an African founder that has raised a pre-Seed or Seed round, reach out to me and I can do you an intro to Sahil.

Learn more about Sahil and apply to his fund here.

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