Tomorrow's Technology Is in China, Tomorrow's Market Is in Africa

“We have one precondition: the founder we invest in has to be a Christian.” — Jerry, quoting an investor at a family fund verbatim

An African tech company listed in the US had customer photos on its website that were entirely Photoshopped, and nobody caught it all the way through to IPO. The “Pinduoduo of Addis Ababa” has five or six people group-buying ten kilos of potatoes together, going from zero to a million orders in a year. Someone in Ghana set up WhatsApp groups, charged a subscription fee, and periodically dropped compressed porn clips into the group — because data was so expensive that streaming from an HD site was unaffordable. All of these stories come from one person: Jerry, a computer engineering graduate who spent six or seven years as a developer at chip companies including AMD. In 2016 he sold his car, gave up his apartment, and went to work at an incubator in Ghana. In 2021 he founded Roselake Ventures, currently the only Chinese-backed institution planted in African early-stage venture.

The Africa in the media is only war, corruption and fraud. Jerry is a thoroughgoing optimist: the World Bank might be your LP, church is the best due-diligence tool available, and the proposition that “tomorrow’s market is in Africa” is something you can see and touch. In this episode, Raymond and Jerry discuss what it’s like to spend ten years doing venture capital in Africa.

What follows is the full conversation, edited and condensed.

1. Sell the car, give up the apartment, go to the place with the most problems in the world

Raymond: Going to Africa is something a lot of people have considered, and very few actually act on. My own Africa experience is thoroughly touristic: Egypt, Morocco, Namibia. The populous countries where people are actually building things — Kenya and the like — I’ve never been to. I’m extremely curious about the continent. Jerry, introduce yourself.

Jerry: My main work right now is investing in local early-stage tech companies in Africa, while also helping many Chinese companies connect to resources in Africa — what we normally call going global. And helping African companies connect to China, which we joke about as “coming inbound.” I did my computer engineering undergraduate degree overseas, then spent six or seven years as a developer, working at chip companies like AMD and at some startups. In 2016, by coincidence, I saw online that an incubator in Africa was hiring. I applied, and after several rounds of interviews got an offer, with a request to respond within a very short window. I didn’t deliberate much. Two months later I sold my car in Canada, gave up my rented apartment, and went to Ghana, where I worked at that incubator for close to two years. Those two years changed how I saw Africa. Later I returned to China and worked at a VC in Shenzhen, and happened to catch the blockchain wave. In 2018 I joined the world’s largest web3 incubator, responsible for the China and North Asia markets. In 2021, together with another friend who had done investing in Africa, I set up Roselake Ventures, putting my time and energy back into Africa to support what we think is Africa’s most valuable asset class — young, passionate talent, African founders.

Raymond: When you got the offer, why did you want to go? Life in Canada is an enormous comfort zone. Giving up everything for another continent takes a lot of nerve.

Jerry: The ceiling on Canada’s whole startup market isn’t high; the population is too small. I’ve always had a passion for entrepreneurship — I even did an entrepreneurship certificate as an undergraduate. To me, entrepreneurship means finding problems and solving them. After being in Canada long enough, I wanted to see whether there were more problems to be found. When I saw this opportunity I was especially excited, and one sentence was in my head: I have to go see the place with the most problems in the world. My knowledge and background might turn up different kinds of opportunities there. On top of that, some fairly close friends from university had done volunteer work in Africa, and the feedback when they came back was uniformly excellent, so I made a snap decision and went.

Raymond: What was so good about the volunteers’ feedback?

Jerry: The question everyone asks most is whether it’s safe. The Africa you imagine is going to be extremely bad, so once you’re there, even if it’s only marginally better than what you imagined, it feels great. Most of what they encountered was schoolchildren and education-related projects, and people were straightforward. And some of them used that African experience to get into better schools — Harvard, the Ivy League. Whether you look at it opportunistically or idealistically, the feedback was excellent.

Raymond: If you wanted somewhere with a lot of problems, South America, Southeast Asia and China itself were all options. Why Africa?

Jerry: I did think about South America early on, but South America’s biggest problem is language. I was educated in English; I tried taking Spanish courses and found it wasn’t so easy to pick up. Ghana speaks English, and as a former British colony there are strong institutional, legal and economic similarities with Canada and even the US. It was a relatively easy choice.

2. If you speak English, you can go to most African countries

Raymond: This is something I had never considered — that Africa is a place with a language advantage. I’ve been learning Portuguese lately and it’s genuinely brutal. Being able to go somewhere English-speaking is a real convenience.

Jerry: Why are so many volunteer programs and NGOs based in Africa? The core reason is language; it’s friendlier to us than Southeast Asia or the Middle East. Africa was mainly colonized by Britain and France. Ghana and Kenya came out of the Commonwealth system, along with Nigeria, the most populous country on the continent — all English-speaking. Much of West Africa speaks French, like Senegal and the DRC, and further north Morocco and Tunisia also speak French. The French-speaking population alone is on the order of 400 million; English speakers are 300 to 400 million. Below that come Arabic, from religion, and countless tribal languages — a Ghanaian may well not understand a tribal language from elsewhere in their own country. So as long as you speak English, you can go to most African countries; speak French and you’ll live very comfortably across the former French colonies.

Raymond: What level of “speaking English” are we talking about? Chinese people also study English through nine years of compulsory education, but most can’t speak it.

Jerry: It’s more like India. Many people speak a tribal language at home, but English is the official language, and once you’re in school, lessons and all coursework are in English. As long as you’ve had a proper education you can speak English fairly fluently, like a lot of English-speaking Indians. At least in my experience, most people’s English is good.

3. Africa’s ferocious competition is not manufacturing competition

Raymond: How many African countries have you been to? What’s the overall feel?

Jerry: Let me count: Ghana and Togo in the west, Morocco and Egypt in the north, more in the east — Kenya, Somalia, Ethiopia. I’m fairly optimistic about Africa. Search for African news on any media outlet and the overwhelming majority is negative: robbery, war, corruption. Before I went to Egypt everyone told me it was the world capital of scammers. So I arrive in every country with very low expectations, prepared for all kinds of situations to arise — and in most cases what I find exceeds those expectations, so the experience ends up feeling very positive. On top of that, most of the people I deal with are local founders, investors and entrepreneurs, and the overall quality is very high. Meeting this many young people, who have such strong positive drive, has shown me a great deal of hope.

Raymond: What about specific regions?

Jerry: I like East Africa a great deal; the climate in Kenya and Ethiopia is like Kunming’s, no bitter cold, and both Nairobi and Addis Ababa are very pleasant. But East Africa is gentler, less cut-throat. West Africa is more cut-throat, which for someone doing investment actually makes it more attractive. North Africa is a good market too; I just don’t speak Arabic, so communication is harder. The Francophone zone is the one people have explored least: Côte d’Ivoire, Senegal, Cameroon look like a set of small countries, but they run France’s economic system, insurance framework and currency regime, and the telecom operators behind them all have French lineage — small countries, but effectively one unified large market.

Raymond: What does “cut-throat” mean here? Colin Huang of Pinduoduo said it, didn’t he — every table in China is full. China’s version of cut-throat competition is competition in production. Is Nigeria, Africa’s most populous country at 200 million people, like that too?

Jerry: No. Africa is the least industrialized region; manufacturing is close to a blank for the great majority of countries, and manufacturing-style competition doesn’t exist in Africa. Its competition comes from large populations and high urbanization rates. Lagos has over 20 million people and large numbers still moving in every year; it may become one of the largest English-speaking cities in the world. Kinshasa in the DRC has 9 to 10 million people and is, as far as I know, already the largest French-speaking city in the world. But there are far fewer jobs in Africa than in China, so the competition shows up in competition for work. Translated to companies: if you’re doing logistics in Nigeria, the number of startups is certainly the highest; if you’re doing fintech, at least 10 companies of the same type are competing.

4. The World Bank might be your LP

Raymond: Who’s backing those 10 fintech companies? In China’s P2P era there were tens of thousands of companies, each with angels and A, B, C, D rounds behind them. Is Africa similar?

Jerry: Similar, but African money has the worst liquidity in the world — people still direct capital toward markets they think have more opportunity, like China and the US. And the sources of money are different: a very large share comes from overseas, primarily Europe and the US, and a big chunk of that is impact investing, sovereign funds, even aid money — USAID, Chinese aid, various development institutions. Local money is only a minority, and within that some is old family industrial money that also traces back to Europe and America.

Raymond: So the Gates Foundation isn’t a competitor of yours? You do fintech, they treat disease.

Jerry: Right, not competitors. But institutions like the World Bank, and all kinds of non-profits, show up as LPs, placing money across many funds and requiring those funds to focus on ESG, financial inclusion, technology access, even support for female founders.

Raymond: Meaning the World Bank and the IMF are both potential LPs for you?

Jerry: Yes, and even money from family offices that wants to do impact investing. That’s the general LP profile behind African VC.

Raymond: Fascinating. My LPs are all far-sighted, successful individuals. It never occurred to me that one day I might go raise money from the World Bank.

5. It was supposed to be financial inclusion; it all ended up being predatory lending

Raymond: Getting into sectors — where is Africa’s potential clearest?

Jerry: Very similar to China and the US back then. The hottest is definitely fintech: more than half of all capital and startups are doing something related. Africa has fewer than 10 unicorns in total, and the overwhelming majority are fintech. Finance is the foundation of everything, and payments is the most broken thing in Africa right now — the place with the most problems is of course the place with the biggest opportunity. Second is climate tech over the last couple of years, EVs and solar, which skews government- and policy-driven with fairly ample liquidity. Third, which I think has promise, is agriculture; feeding your own people is always important. Then e-commerce: China has leading experience in e-commerce, from technology to business models, and as investors with a China background we can combine that growth experience with African localization. Logistics, delivery, the whole e-commerce services layer — we think there’s opportunity across all of it. Healthcare is hot too, with large amounts of impact-institution money going at high mortality, high neonatal mortality and the prevalence of dangerous infectious disease. Education used to be hot as well — but because of USAID, I’ve been talking to a lot of healthcare and education founders lately who are all running into funding pressure.

Raymond: A note for listeners: earlier this year Musk’s DOGE, the Department of Government Efficiency, took an axe to US government spending, and USAID — the US Agency for International Development — had its budget essentially wiped out. But in my head USAID is a place that hands out money, twenty thousand dollars here, forty thousand there. What does it have to do with startups?

Jerry: Africa lacks liquidity overall, so companies’ funding sources are diversified: beyond normal VC rounds there are grants from the World Bank and USAID, loans from development finance institutions, even individual donations. And some companies’ orders come from those institutions’ projects in the first place. When USAID stops, part of the funding disappears and so does the counterparty. Worse, the US is the beacon for aid to the developing world, so the moment it proposes cutting back, a lot of European countries start thinking: the US has stopped, do we follow? A lot of institutions simply pause. That’s the picture a friend at the African Development Bank gave me.

Raymond: So the lead investor pulled out, which makes it riskier for the followers to keep writing checks, so they wait and see. Back to fintech: traditionally it splits into payments and lending. Which part is Africa mainly doing?

Jerry: Mainly solving payments. But as in China, lending is easier to break through on as a business model and easier to make money from, so it has also become very important, and P2P and loans of all kinds have proliferated in recent years.

Raymond: There are two possibilities with lending. A: these populations were genuinely unbanked — they have good credit and income flows, there just weren’t enough bank branches, and lending companies go in and fill that service gap. B: these users shouldn’t be lent to at all, and the company force-feeds them payday loans, ultimately creating a social problem — which is fundamentally regulatory arbitrage, running usury in the window while regulators aren’t paying close attention. In Africa today, is lending mostly the unbanked case or mostly predatory?

Jerry: Honestly, I think most people want to do predatory lending. Including a lot of the Chinese who previously did P2P in Southeast Asia, who are all starting to position in the African market. Why did governments support fintech so strongly at the outset? It was meant to solve your first case, and they eventually discovered everyone was doing the second.

Raymond: Understood. Lending companies always open with the story of an ordinary person who can’t borrow 500 yuan — that’s what fintech is supposed to be for. Then as it goes on, most of the volume turns out to be payday loans and compounding interest. And because Africa has so many countries, fintech companies deploy multi-country, so even if one regulator shuts them down there are plenty of other countries to operate in; they’ll make money in the end regardless. You also mentioned agriculture — I’ve been in Chinese VC circles for years and genuinely rarely hear about agriculture investing. Give me an example?

Jerry: Many companies within agriculture can also be defined as fintech or e-commerce companies. On this trip to Ethiopia I came across what I think is the best-performing startup there, and what it does is the Pinduoduo model: five or six users in Addis Ababa group-buy together, buying ten kilos of potatoes directly from nearby farm owners, then divvying them up in the neighborhood. Extremely crude and simple, but it went from zero to a million orders in about a year, and still grows double digits monthly. There are also commodity trading businesses that place consolidated orders for farmers and handle import-export for them; ones providing agricultural loans to farmers; ones doing IoT digitization for them; ones doing installment leasing for agricultural inputs — machinery, seed, even breeding cattle and sheep. The most interesting one I’ve seen uses low-orbit satellites to photograph farms, runs AI big-data analysis, and sells it to insurance companies.

6. “The founder we invest in has to be a Christian”

Raymond: Are there any no-go zones or major pitfalls to avoid on the investing side?

Jerry: I don’t dare pronounce on which sectors aren’t worth investing in — we skip healthcare and education because we’re not good at them, but there are certainly money-making opportunities inside them; it depends on each person’s background and strengths. The pitfalls are genuinely numerous. Doing due diligence in Africa is extremely difficult, especially for international investors like us: you’re investing across different countries, in founders whose names you can’t even spell in full, so how do you tell whether the customers he claims are real? Recently there was an African tech company listed in the US where people eventually discovered the customer photos on its website were all Photoshopped — nobody caught it all the way through to IPO, until a journalist investigated in depth. And once a dispute arises, resolving legal conflicts as an international investor is also extremely difficult. Many of the clauses that protect investors well — personal asset guarantees, collateral — can’t be enforced in Africa. Also, the earliest investors in Africa were European and American, so African early-stage financing uses SAFEs extensively, whereas Chinese investors doing deals in China have almost never touched a SAFE. Having to fit into the European and American framework while being unable to get the protections we’re used to is very challenging for Asian investors.

Raymond: So across all the deals you’ve done, how do you solve these problems?

Jerry: The African ecosystem is still early, there are plenty of pitfalls, but a reliable solution hasn’t formed yet; everyone still invests the way Silicon Valley does. It’ll probably take enough people falling into enough holes, and someone building an investment approach with African characteristics, before that changes. China has Tianyancha and various additional channels for screening; locally there’s nothing. We rely much more on human due diligence: many of the projects we invest in have at least one or two degrees of connection to us — his direct investor, his former colleague, or even the founder himself, we’ve come across before. Mutual verification between circles is our main method of due diligence. We’ve also lived and worked in Africa, so we can go to former colleagues and local friends and cross-check from the side, repeatedly.

Raymond: Have you run into anything truly bizarre during an investment process?

Jerry: Religious belief runs deeper in Africa, and family culture and tribal culture are things Chinese people aren’t familiar with but which very concretely exist and carry weight. The single thing that shocked me most: I got to know one of the funds inside Dr. Kissinger’s family fund that does early-stage investing, and called to ask whether they wanted to look at deals. He said, we have one precondition — the founder we invest in has to be a Christian. I asked why. He said, this is something we probably won’t put on the website, but there’s no way around it; this is one of the ways we build our screening criteria. In their eyes, someone you can find through the church is more trustworthy.

Raymond: When a society is highly fragmented, lacks an effective credit system and makes due diligence impossible, “he’s a Christian” is a baseline piece of due diligence. You can’t say a Christian will never cheat you, but the probability drops, and diligence gets easier to clear. Chinese people have this kind of local wisdom too: “don’t invest beyond Shanhaiguan” — meaning don’t put money into China’s northeast.

Jerry: Right. Dr. Kissinger himself may also have been a Christian, and people are more supportive of those who share their faith. Beyond that, it’s fake projects in every conceivable form: use Shopify to quickly copy someone else’s website, pick a name very close to another company’s, and tell their story as your own. We’d do due diligence and then find problems all over his site. Some of the faking gets down to pixel-level copying.

Raymond: This is the VC world’s Nigerian prince. For listeners who don’t know the reference: an early-internet email scam meme — someone emails saying he’s a Nigerian prince who has run into difficulties, and if you wire him 500 he’ll cut you in for 200 million once he reclaims the throne.

Jerry: When I was working in Canada, I went to the home of a friend who was in business locally — a hugely lavish pool party, everything gilded, a DJ hired, top-shelf liquor, and he described himself as an entrepreneur who’d made his fortune in internet technology. Afterward my friend told me quietly: they run online fraud.

Raymond: Presumably no Chinese people have been arrested for running scam operations in Africa?

Jerry: There have. Kenya had a fraud ring pursued and prosecuted a while back. Africa has many countries and every place is different; there’s no effective way to genuinely crack down. Let me share another real business model, which a friend of a friend told me about back in Ghana: he set up a pile of WhatsApp groups, charged a fee to join, and then periodically posted porn clips into the groups — a WhatsApp-group-based subscription service. Why do it that way? First, it’s easy to recruit people on WhatsApp. Second, when we went in 2016, connection speeds and data prices were both very expensive, so watching an HD site cost a lot and lagged badly, which is why people packaged compressed porn, music and films as subscriptions.

Raymond: SHAREit did something similar in India: in the era of expensive mobile data, people would go somewhere with WiFi, download everything in one hit, and watch it at home. Remarkable maneuver. Africa doesn’t have the concept of a firewall, presumably?

Jerry: In most countries you can currently access the internet freely. But some countries have started talking about learning or buying this kind of technology, and during Senegal’s election there was a nationwide internet blackout.

Raymond: Cutting the internet is easy — you switch off the towers. A firewall is much finer work.

7. Chinese people have no church, so the office is the most sacred place there is

Raymond: Does running a business in Africa require working with the government? In the Middle East, government is everywhere — it’s either your largest client or your largest LP, with an extremely strong presence.

Jerry: We deal with government very little. Africa overall has a very commercial atmosphere; a lot of presidents and senior officials have various business holdings in the family, plenty of people have small-trader backgrounds, and the commercial atmosphere is very accommodating. Second, unemployment in these countries is high with large numbers of young people lacking work, so governments are fairly supportive of youth and SME development, and will even permit some slightly extreme practices to exist.

Raymond: I’ve heard an urban legend: African factories have to pay wages twice a month, once on the 1st and once on the 15th, and after each payday they have to re-recruit — employees take the money, spend it all that day, and only come back to work once it’s gone. Is that a legend or is it real?

Jerry: It does exist. I have a European friend whose family is already second- or third-generation in Africa, and his uncle runs a hotel in southern Africa where the hiring method is to lay everyone off in waves every six to twelve months and hire a fresh batch — he thinks people lose their drive once they’ve settled in. Even a European’s hotel operates that way. But the core reasons are probably different. First, per capita income in Africa is very low, so paying once every half month leaves a lot of people unable to make the money stretch; after one or two cycles they decide the arrangement doesn’t work. Second is culture. In Africa, church matters enormously to many people; however busy they are they go once a week, and every evening they return to the family to pray together. These rituals are tradition. We Chinese have no church, so the office is our most sacred place, the place everyone is most willing to go. Different culture, different management style, and friction follows. This is exactly why a lot of Africans don’t want to work at Chinese companies: some Chinese companies bring a highly militarized management style to Africa, standing at attention in the morning, doing group exercises, and it produces enormous incompatibility.

Raymond: Standing at attention and group runs — no young Chinese person in 2025 would accept that either.

Jerry: This still existed a few years ago; it’s real. Many of our previous generation of entrepreneurs were shaped by military culture, and China didn’t historically have management science. Even now, our management science may still be centered on obedience: one voice rules, the boss decides, everyone twists into a single rope and pulls together. Unlike Japan, which iterated a large body of manufacturing theory and manages by scientific method. Also, Chinese companies staff management heavily with their own people, even people brought from their hometown — fellow villagers, nephews and nieces, uncles and aunts. For a local, there’s no promotion path and no visible development, so leaving is the better option.

Raymond: From now on, when someone asks why we work overtime, I’ll say it’s because we have no church to go to. Office is our church — that’s where all people get together.

8. Tomorrow’s technology is in China, tomorrow’s market is in Africa

Raymond: Do companies raising money approach VCs proactively? How many VCs will fight you for a deal?

Jerry: Competing for deals is very rare; fundamentally Africa has poor liquidity overall and is short of money, and after US rate hikes even less money flowed to Africa, so being unable to win a deal basically doesn’t happen. The downside is that many companies can’t raise their next round and die because the runway isn’t long enough. Separately, China’s strategy in Africa has always been top-down; there are many Chinese companies and the Chinese state behind large construction and enormous investments. But Chinese people investing bottom-up, at the grassroots level, are uncommon — among investment institutions with a Chinese background, we are currently the only one in Africa. Many people want a closer link to China, so we receive large volumes of inbound deals every day saying they need Chinese resources, connections, networks, and that’s our competitive advantage. But we’ve also hit the reverse: some companies with strong fundraising ability, whose capital comes mainly from professional European and American institutions, will actually distance themselves from us because of Chinese political issues and won’t take our investment.

Raymond: So there’s some picking of sides. What about China’s enormous infrastructure spending in Africa over the past five to ten years — I like watching mega-construction on YouTube, and where it used to be China building giant dams at home, now it’s China building giant dams in Africa. Do locals feel good or bad about it? Does it help Chinese people do business, or help Chinese VCs win deals?

Jerry: Those investments give people the impression that China is very strong: strong in technology, strong in infrastructure, that China is not a backward country but a very advanced economy. Go to Europe, or even a lot of established Asian countries, and in people’s minds China is still the poor cousin who suddenly got rich. That doesn’t exist in Africa. Most Africans have a good impression of Chinese investment and of Chinese people. But some also think the Chinese may have more money than sense — Chinese people are fairly nice and, for language reasons, don’t interact much with locals, so there’s somewhat more of people putting a hand out to Chinese for tips or bribes.

Raymond: Because you’ve done a lot of things that display strength, they see you as a rich heiress and figure anything they can skim is worth skimming. So would you advise Chinese companies to go to Africa? There have been many successful cases of Chinese companies going global in the last five to ten years — never mind SHEIN and Temu, Transsion has been extremely impressive. What kind of company is suited to going?

Jerry: I’d strongly suggest people consider Africa. The reasons we’ve been giving for ten years still hold: the demographic dividend, fast-rising internet penetration, urbanization rates — those are the most important advantages of investing in Africa. On my last business trip to Ethiopia I traveled with an investor from one of China’s largest funds of funds, and something he said stayed with me: after all these years investing, he only likes two directions, tomorrow’s technology and tomorrow’s market. Tomorrow’s technology is certainly in China; tomorrow’s market is not necessarily in China. Tomorrow’s technology is something you can’t touch or see; but tomorrow’s market being in Africa is something you can see. Of course low per capita GDP, low incomes and poor infrastructure are also objectively real, and whether it suits you is another matter.

Raymond: A quantitative question: a Chinese person earns 100 and ends up spending roughly 30 to 50, saving the rest. Look at the same metric in Africa — how much does the average person spend?

Jerry: I think they’d spend more than 100. They need to spend ahead of income to solve a lot of problems, and much of the time it’s a cultural matter.

Raymond: The Chinese 100 has kept getting bigger — 100 becomes 1,000, 1,000 becomes 10,000 — but the share that gets spent hasn’t visibly increased. My parents’ pensions are quite decent now and they’re still very frugal. East Asians in general have a culture of material thrift, which is why China, however hard it tries, struggles to become a market commensurate with its national strength and scale. Whereas a hugely populous country like Nigeria, if it’s willing to spend 120% of itself, is roughly a market of four times its own population.

Jerry: Yes, and I hadn’t considered it from that angle. Coming back to one point, the commentator Fu Peng raised an idea I find very interesting: China’s ageing is already fairly severe, so there aren’t enough workhorses left to service all this debt; Africa and Southeast Asia have this many young people and this many future workhorses, so doing business locally that requires future repayment — lending — is actually the best business there is. I’m fairly sympathetic to that view.

Raymond: With inflation, as long as the population is young enough, borrowing from the future makes sense. The average age in Africa is 20; China is already 35 — Africans have 15 more years than Chinese people to keep working and paying creditors back. I went to Saudi Arabia last month and it left a deep impression: I’ve never seen so many children, the streets are full of children and you don’t see old people. In Hong Kong, Beijing and Shanghai you no longer see that many children. Countries with lots of young people should actually run larger deficits, borrow more at the national level and do more investment and construction; it’s certainly better for economic development.

9. After Paystack made money: young people going back to Africa to start companies

Raymond: What successful or interesting cases have you been involved in over the years?

Jerry: My other partner previously did cross-border M&A in Africa. A lot of people think Africa is backward, but Africa hasn’t been doing investment banking for less time than China; South African finance used to be more developed. He came across many local African companies acquiring Australian supermarkets — the so-called underdeveloped country reverse-acquiring companies in developed countries, which happens quite often, executed very professionally. When I was in Africa in 2016 and 2017, that was exactly when African internet VC was getting going: those two years saw decent African startups entering YC in the US, a milestone-type event, and two years later one of them, Paystack, was acquired by Stripe, on which YC reportedly made a good multiple. That indirectly proved you can make money investing in Africa, and early-stage VC money afterward started flowing in at one, two, geometric multiples. Before AI came along, roughly 10 to 20 African companies were admitted to YC each year, a higher admission rate than Chinese companies — Europeans and Americans do like coming to Africa to look at investments. We’ve also met a lot of founders of European and American unicorns and Series B, C and D companies participating in investments into equivalent African projects, possibly positioning for their own companies’ futures — when they enter a new market, the more common route is M&A and acquisition, unlike Chinese companies, which go into a new market and build everything themselves. I hope in future Chinese companies going to Africa can also consider entering new markets through acquisition and investment, rather than redoing everything from scratch.

Raymond: I’ll tell you this with full confidence: because the Chinese person’s church is the office, Chinese people will not do acquisitions. Chinese people simply love redoing everything themselves. I’ve been thinking lately that Chinese companies really do have it miserable and exhausting. Look at Chinese ADRs: Pinduoduo fell, because JD’s national-subsidy push hit Pinduoduo’s subsidies; JD looks around and asks why it fell too — because JD went into food delivery; and why did Meituan fall? Because JD and Alibaba both started doing food delivery to attack Meituan. Chinese companies particularly dislike M&A; most of them just like starting over themselves. It’s a very distinctive and remarkable feature of Chinese corporate culture.

Jerry: So as a hopeful wish, I hope that day comes; it would be a great opportunity for early-stage investors like us. Separately, African founders have grown steadily more mature these past couple of years. Compared with my incubator days in 2016 and 2017, we’re seeing something very similar to the early Chinese internet: Africans who studied or worked in Europe, the US, even China are going back to start companies in their own countries, bringing back advanced technology, business models and management practices from Google and Facebook. And plenty of middle and senior managers from African unicorns and listed tech companies are leaving to start their own — just like China’s second- and third-generation founders coming out of the first-generation internet companies. We’ve even met Africans who worked at TikTok leaving to start companies, people who worked at Huawei leaving to start companies, and African students who studied at Tencent, or graduated from Peking University and Tsinghua, going home to found companies. One founder we invested in is a South African who graduated from Peking University’s Yenching Academy, doing something like last-mile community group buying. Experientially, that’s something we find very gratifying.

10. Going to Africa for the first time: pick one point each from east, south, west and north

Raymond: Africa is enormous — too many countries, too many cities. If a Chinese entrepreneur wanted to experience it firsthand, which few countries would let them see the whole from a part?

Jerry: Pick one point each from east, south, west and north. In the east, first choice is Kenya: good climate, good environment, friendly visas, direct flights from Guangzhou, and next month there’ll be direct flights from Beijing to Nairobi too. There’s no malaria or similar disease, and outside of work you can go on safari in the natural scenery nearby — work and rest balanced, the easiest option for a first trip to Africa. Also in the east you could look at Ethiopia: Africa’s transport hub, with very fast urban construction in recent years and lots of industrial parks — whether it’s a good place to operate is another matter. In the south, go to South Africa: a BRICS member, the highest per capita GDP among Africa’s large countries at $6,000, producer of Elon Musk, and home to the investment world’s most famous name, Naspers, which invested in Tencent. Good wine, climate, natural resources and agriculture, and medical research used to be fairly advanced. In the west, go to the most cut-throat English-speaking countries, Ghana and Nigeria — if you get the chance, you must go to Nigeria, Africa’s most populous country, called Africa’s Indonesia or Africa’s India; experience what the country with Africa’s largest population and highest GDP is actually like. In North Africa, go to Egypt: Africa’s second most populous country with over 100 million people, and also the most populous country in the entire Middle East, generally functioning as the Middle East’s back garden and base. If you’re positioning for the Middle East or care more about the North African market, go look at Egypt; visas are easy, and you can see the pyramids while you’re there. If you want somewhere with more opportunity, look at Francophone Africa — Senegal, Cameroon, Côte d’Ivoire, Morocco — high GDP growth, unified culture and institutions, good stability, not large markets but growing very well, with less intense competition. And if you have an adventurous streak and want genuinely unique opportunities, you can go to places like Somalia and Sudan that have been through a period of chaos and are now trying to enter steady development; there’s enormous opportunity, you just have to balance the safety factors yourself.

Raymond: The core version is Kenya, Ethiopia, South Africa, Ghana, Nigeria and Egypt; the advanced version is Côte d’Ivoire, Senegal, and Sudan and Somalia. How much time do you spend in Africa in a year now?

Jerry: I go a great deal: looking at deals, bringing people over, attending events. At the same time, a lot of African entrepreneurs and founders come to China, and we host them, connect them to Chinese resources, and tour internet and tech companies. Incidentally, travel costs in Africa are extremely high: a while ago a friend and I arranged to meet somewhere else in Africa, he flying from West Africa to East Africa and me flying from China to East Africa — my ticket was cheaper than his, and the flight time was shorter.

Raymond: Same as South America; Mexico to Argentina is also an enormous distance. So beyond investing, your business also covers Chinese companies wanting to scout Africa and African companies wanting to come to China.

Jerry: Right. One thing that’s different about us: when ordinary Chinese people go to Africa on a study trip, they generally engage with the local Chinese chamber of commerce, Chinese-invested enterprises, or a Chinese agent. We mainly deal with locals; when we arrive we contact local lawyers, accountants and young entrepreneurs directly. Most traditional companies still use their own people and do it themselves, but this cohort of young people I’ve encountered, including students who studied in China and went back, is a group worth engaging and worth mining. This talent is Africa’s most valuable asset.

Raymond: The network you’ve built over all these years is extremely valuable. There are certainly going to be many Chinese companies and African companies that benefit from Jerry’s African web.

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