Episode 4 The Silicon Savannah – A story curated by Change Com
Episode 5 Risk VS Reward - A story curated by Change Com
Africa is emerging as one of the most dynamic frontiers for venture capital, with a growing startup ecosystem, increasing investor interest, and a wealth of untapped opportunities. While the potential is high, navigating the investment landscape requires a deep understanding of local markets, strategic risk management, and strong partnerships on the ground.
In this episode of Why Invest in Africa, we explore the dynamics of risk and reward in early-stage investing.
For this Q&A, we sat down with Trond Riiber Knudsen, Founder & CEO of TRK Group AS, and Marie Nilsen, Partner at Antler East Africa.
Trond, a veteran investor with deep ties to Africa, shares his insights on what makes the continent an attractive investment destination, the different models for mitigating risk, and how global investors can find success by building strong local partnerships. With over two decades of experience at McKinsey & Company, where he was a Senior Partner, Trond played a key role in expanding McKinsey’s reach across Africa, working closely with governments, investors, and entrepreneurs to shape business and innovation landscapes. Since founding TRK Group AS, an Oslo-based investment and advisory firm, he has remained actively engaged in African markets, leveraging his expertise and network to support early-stage startups and impact-driven ventures. His investments span disruptive technologies, digital transformation, and sustainable development, positioning him as a key advocate for Africa’s economic future.
Marie offers a perspective on finding and supporting the right talent, the role of ecosystems in fostering innovation, and why long-term commitment is essential for unlocking Africa’s economic potential. As Partner at Antler East Africa, Marie plays a pivotal role in identifying and nurturing early-stage startups across the continent. She brings hands-on experience as a former startup founder, having successfully built and exited a paper recycling company in Ethiopia. Prior to joining Antler, she was an Associate Principal at McKinsey & Company. Her deep understanding of the African entrepreneurial landscape, combined with her investment expertise, enables her to bridge the gap between innovative startups and the capital they need to scale.
Together, they shed light on the evolving investment landscape in Africa and the untapped opportunities that make the continent one of the most exciting spaces for venture capital today.
IA: As a successful investor in the startup ecosystem, what is your motivation for investing in Africa?
Trond: My main motivation for engaging in Africa has been, my connection, with the continent. I was lucky enough to be born in Addis Ababa in Ethiopia, and that gave me for the rest of my life a strong connection to the continent.
Helping build McKinsey there, also gave me exposure to Africa, lots of new friendships, and great people in my network.
I decided to do two things. One was to work with Norwegian tech and tech entrepreneurs to create the next generation of green sustainable business out of Norway and then to engage in Africa more directly, on different fronts to try to help out, leveraging some capital, some network, people on the ground to start companies, invest in companies, and try to create jobs, on the on the African continent. So that was my way into it.
IA: Choosing to invest in startups on the African continent, how do you analyze risk vs reward?
Trond: Africa, of course, has so many opportunities, but there are also challenges, that, having a strong local network, not being a distant investor into the continent, having passion for the continent, resilience in the way you deal with these challenges because you want something to happen so dearly, I think is really important.
There are a few different models for analyzing risk and reward. One model is to have a very strong social impact dimension in why you start something and then start a company with talent on the ground in Africa to do something that might not even be there today. So the risk is high. The reward can be terrific.
Another way we are working on the risk-reward dimension is to establish an investment community, an investment platform, locally where you get good visibility to the companies and the talent before you invest, and you create a portfolio. So both getting to know the entrepreneurs, being able to decipher quality, understand the concept and the competitiveness of the concept. And this whole notion of a portfolio also plays into risk reward.
And, we have established two platforms in Africa. One is the global talent incubator, where we take talent in and create companies, called Antler. So we have started that in Nairobi with the help of Norad, Norfund, and the World Bank, IFC, and a number of Norwegian families helping us in investing in the first round in Nairobi. And that concept is now growing also in Africa, and we are expanding to Lagos. But it’s very important that we reduce risk by being super close to this talent, selecting talent, not investing in all their ideas, only a few, and creating a portfolio.
Same with Katapult, which is our social climate impact accelerator, where we started in Oslo in 2017 and we got a number of high quality African companies to come to Oslo and build in our accelerator. And then after the pandemic, when things started to be remote, we basically decided to move Katapult to Africa. So, again, with the support of Norad, we basically established ourselves in Kigali. But that’s a platform.
The third way I’m involved in building companies in Africa is that you have strong companies present in Africa that decide to build new companies. And that’s what we did with Opera software, a Norwegian AS, listed on Nasdaq, huge in Africa. So we have 30,000,000 monthly users in Africa. We are very large in Nigeria. And we decided to launch a bank, a digital bank on top of our platform in Nigeria called Opay. And Opay has become the highest valued unicorn in Africa at $3,000,000,000. But it’s the third model where you basically leverage the strength you have in your African operation, and you find ways to launch new companies. So those are three different models that we are deploying.
IA: Where does one start if one wants to consider investing in the African startup ecosystem?
Trond: If you want to invest into the African ecosystem, you need to trust the people locally that you will work with. It’s super important. Rather than invest from Europe just directly into a startup in Africa, you need trusted local partners. And, so in my case, there were a couple of different avenues. So one avenue was that I had a local network. I had been doing work in Africa, and some of my friends wanted to become entrepreneurs. So then I connected to them and supported their ambition.
The second model is that you engage with an investment community and investment platform locally. And you, find a way, like, many Norwegian families have engaged with Antler as their talent incubator in Africa to support companies coming out of Antler.
Trusting the local team, having a lot of exposure to the local team, and then being exposed to the talent and the quality of these companies creates trust. And it’s why it looks like we also now can launch the second fund and a bigger fund for Antler going to Lagos. So, I think the takeaway for me is that the trust that you need to have and build with the local team is super important. You need to have people on the ground who are 100 % committed to Africa that will basically stay there and live there. Africa is a long-term game where you need partners with huge passion and a kind of deep knowledge about the continent and what they want to build.
IA: How do you find the best investment opportunities and also how to handle the risk or perceived risk of investing in Africa?
Marie: No matter where you invest, there’s risk in Africa, there’s risk in Norway, there’s risk everywhere. I think that as a fund, one has a more balanced approach to it. So we have 25 portfolio companies, which means that some go well, some do not go so well. And I think that a balanced approach is important, which is harder if you invest alone, relative to investing in a fund.
How to find the best entrepreneurs? At Antler, we look for people rather than startups. And then we’re part of the journey from the very beginning of those entrepreneurs’ journey. We find them anywhere from large corporations, and dare them to take the leap of faith into entrepreneurship. And then once we have those people available, creating an ecosystem for them to really thrive and dare to take the risk. So our job is really to de-risk and make capital available, make an ecosystem available, and hopefully make more founders thrive.
IA: And how does one avoid pitfalls? And how does one navigate?
Trond: One of the key elements then is to make certain that you have a very professional team, locally, that you know, that you trust, that can engage with you, bring you into discussions, so that, you do the required analysis, do the diligence that you need to do to try to take away the risks that you can take away.
One way to also address this risk, is that you make certain that anything you invest into is sufficiently adjusted to the specific requirements and circumstances of African countries. Very seldom do we see a copy of a western idea just directly implemented. In some cases, as you know, you can actually be earlier in Africa, like with M-Pesa, with mobile payment in Kenya and basically ahead of the rest of the world. Sometimes you can just leapfrog.
That can be a good thing. You should just know whether this opportunity is there in that category. In other cases, you need to tailor a lot. Like, when we launched, OPay with Opera, that became the most valued unicorn in Africa last round at $3,000,000,000 with the world class VCs investing, which is phenomenal. We basically relied on some analysis, from McKinsey, among others, that said that Nigeria was underbanked from a consumer point of view, and that there was an opportunity.
And with our strong platform, and user base in Nigeria, we thought we could launch a bank from scratch. And, the interesting thing is that this is really tailored to the local circumstances. It’s a hybrid mix of digital and physical, not something you find anywhere else, which is also why it seems to scale in a very good way into a number of African countries and even in Asia. So it’s tailor-made. So these are a few, I think, things to consider on the, kind of risk side of investing, into Africa.
IA: What role do you see in the support of developing solutions in the startup system, having to help mitigate the challenges? How do investors secure impact through their investment?
Trond: Thoughtful impact investing into the continent is part of the solution. We do know that, the primary part of that is the job being done locally. And that’s why building talent locally is so important. That’s what we like with Antler, where we see some of the most skilled, African youth who might be educated abroad, have experience from global employment, coming back to Africa to build companies and basically scale their capability in terms of how you build and run companies. Very important, the talent part of that. It is hard to get the talent, unless you have some of the capital. It hangs a bit together.
Then I think in Africa, because the population is so young. So in Nigeria, the average age of the population is seventeen, eighteen. In Italy, it’s 48. It’s very different. That means that you have very specific challenges in Africa. I think one of them is to create good employment. And that is what we did with paper recycling in Addis Ababa. We created 4,800 well paying jobs.
An Ethiopian Norwegian called me from the university in Munich and said that he had seen that I was active in Addis Ababa. His dream was to come back to Ethiopia. And, I said, you can go and work with our team in Addis Ababa. And, eventually, he became an entrepreneur in Addis Ababa, and launched TaskMoby, which is a jobs portal, the most successful job portal in Addis Ababa, enabling a lot of people to basically get good jobs. So, the job creation part is very close to my heart. My role is to facilitate talent and capital kind of into the African continent and then in that, you know, catalytic way, try to make things happen.
IA: What do you believe the value of early-stage and angel investments is, and the potential economic and societal benefits?
Trond: We see a phenomenal local impact coming out of seed investing, early stage investing into Africa. And we see that whole kind of category investment growing significantly. A couple of things we see. One, of course, is that you come quite far with somewhat smaller investment than you would do in the Western world.
So, the number of jobs you can create per dollar invested, like with TaskMoby, and so forth, is an order of 10 to 50. So that gives you hope. It’s also connected, I think, to the fact that the business models you’re supporting are typically a little bit less capital intensive. They’re a little bit more reliant on creating jobs. It’s a bit more manual work in many cases, which is totally okay, and is more tailored to local situations.
And in many cases, also both just broadening access, and broadening access for high quality education, broadening access for health care. In so many cases, you can come quite far with scaling things that already work and taking on some other initial risk. So your capital really can have a phenomenal impact. And we’ve seen that, in Lærdal Medical, I’m on the board and quite active in Africa. We have supported a number of initiatives in education and in healthcare.
That seems to create phenomenal impact, including on the healthcare side, focusing on saving mothers and newborn children’s lives, in Tanzania, Ethiopia, and across the continent.
Marie: So, Antler is really a day zero investor, which means that we’re trying to build a support network around entrepreneurs, even pre- formation of team and ideas. And it’s really to make sure that we provide that capital, which is really, really hard to raise on the continent. What we do is we find entrepreneurs with ten years of work experience that they can build on and truly build businesses that can transform the local environment that we live in. We think that it’s important to also build local innovation from within, instead of just being a taker of whatever technology is being created around the world.
I think you see a lot of capital available in Africa at the latest stages( Series A) but not sufficient at the earlier stages, where Antler and angels operate. We’re truly trying to fill that pipeline and create solid companies that can then grow.
IA: What are your thoughts around some key opportunities going forward?
Trond: In terms of opportunities in Africa, we should believe that Africa is now the continent that’s gonna see the fastest growth. And, it is actually growing very fast.
When you look at a country like Ethiopia, it’s delivering 8% real growth rates. So point number one is to perhaps just familiarize yourself a bit with the fact that growth is happening. And just from a demographic point of view with all the young people, Africa is the continent that basically adds population the next ten to twenty years while the rest of the world is starting to shrink. You just have to pay attention to Africa. It’s an interesting fact, for example, that there are more babies in Nigeria than in the European Union. So from a market point of view, if you’re selling baby diapers, you cannot ignore Africa.
And that’s a situation across many categories now as basically the continent is growing and maturing in terms of economic activity. You see so many opportunities, but you need to tailor to the local environment and you have to be cognisant of the fact that Africa is not one integrated continent from an economic point of view. So, country selection, super important. Making certain that you enter the right countries in the right kind of sequence. So having that local capability will help you a lot.
Marie: I think the big shift for us actually as we think about Antler going forward is, we don’t only believe in investing in technology. We do believe a lot in tech- enabled businesses as well, which I think has quite high job potential as well, and it widens the mandate a little bit of our fund.
So I think, that’s new for us going forward to not only invest in software-type companies that, yes, they can drive societies forward, but there’s so much more that can be done if you think about a wider innovation lens. One example is Kafresh, one of the portfolio companies, which is not really tech, but they’ve developed a formula that can extend shelf life for agricultural produce. Pretty novel, but it’s not really software. So we believe there’s way more potential in broader innovation on the African continent.
