Cyril Collon and Tidjane Dème are the general partners in charge of African investment at Partech, an investment platform specializing in the digital and tech sectors. Partech has just closed a fund raising of $140m, which was supported by a number of multinationals. The duo detail their vision and objectives for Leaders League.
Leaders League. You closed your fund above the set objective at $140m. You two seem to have the Midas touch.
Tidjane Dème. Establishing Partech Africa has been a real entrepreneurial adventure for Cyril and me. We complement one another and this is a quality we also look for when deciding which companies to pair investors with. Our skillsets are different and so we are lucky to have had the chance to work together on this challenging project. What’s more, a team with just one manager is quite dependent on him or her being in good form and not getting sick, when this isn’t the case it can cause periods of instability in the life of a company. Speaking specifically about Africa, where we aim to explore investment opportunities in a dozen or so countries, it would be physically very challenging for just one person to carry the load.
Cyril Collon. I Identified Tidjane three years ago as the perfect person to help steer our private equity investments on the continent and I agree, we really need two people for this mission. Our aim is to cover the entire continent, even if the level of innovation varies from one region to the next.
A year ago, you told us that Africa’s moment had arrived. Has that proven to be the case?
C.C. It is striking just how dynamic the investment landscape is in Africa is at the moment. The reality is that all our growth predictions have been exceeded. In concrete terms, the continent is two steps ahead of our market research.
Perhaps you haven’t raised enough money then?
T.D. It’s true that the market has gone better than we dared hope. Many have underestimated the ability of Africans to adopt new technological innovations. The predictions made in this regard just a few years ago are already out of date.
Between the closing of the first funding round and the final closing, the interest from multinationals has not increased significantly though. How can you explain this discrepancy?
C.C. Well, I would disagree. After all, L’Oréal has joined us! Our capacity to create links with large corporations is one of the key services we can offer the African companies in our portfolio. The idea is to develop commercial synergies between them over the long term, to envisage M&A opportunities. The base of limited partners we have is very strong. During our fundraising we have crossed paths with the majority of local and international players engaged in investing in Africa today.
T.D. Above all, what Partech Africa wants to do is to engage with the major groups in each sector, such as Orange in telecoms, L’Oréal in distribution and Bertelsmann in the media.
You have already secured deals with TradeDepot in Nigeria and Yoco in South Africa. Are these two operations an indication of the type of companies that will make up your investment portfolio in Africa?
C.C. Yes. These two interventions represent what we hope to achieve, in terms of strategy and location. A third deal has recently been concluded but this remains confidential for the time being. In the case of Yoco, we closely followed their progress from the beginning, when their card payment devices only had a hundred or so users and they were trying to provide cost effective solutions allowing stores to accept card payments. Every quarter we checked in on them to evaluate their progress, which allowed us to identify the best moment to do a deal. The roundtable for Yoco was one of the most competitive in Africa last year, attracting growth investors and LBO funds, which normally don’t consider VC prospects. Yoco’s payment model is very visible on the international scene and is a direct competitor of companies such as iZettle. Yoco wants to become the market leader in Africa.