Dear Community,

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2022 was a rollercoaster year for venture capital and startups globally, and Africa wasn’t left out. As Consonance Investment forges ahead in our mission to foster Africa's prosperity, we would like to update you on our achievements in 2022, introduce our Fund II – the Anfani Fund, and outline our plans for the year.

Regardless of what was going on in the ecosystem, we remained true to our values of intellectual integrity and independent thinking and stuck with our thesis of Trust, Collaboration and Innovation Infrastructure when we deployed capital in 2022.

For us, this looked like companies that enabled transparent economic activity whilst adding value to both sides of a transaction; and organising market activities across varying sectors to extract value that is often lost in the value chain. On the back of our thinking, we went on to invest $1.15 million in 7 startups (two of which we led) across financial services, healthcare, enterprise software, logistics and mobility. This brings our overall portfolio count to 43 (including exited/inactive companies). 

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Whilst we advance into being a truly pan-African fund, we understand the limitations of our capacity in the varying markets we invest in and often favour the regions where we can add the most value, both strategically and operationally. In 2022, our investments skewed towards Nigeria where we made 4 investments, followed up with an investment each in Ghana, Kenya and Uganda. In total, Consonance has portfolio presence in 6 African countries including Cote D’Ivoire and Ethiopia. 

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Highlights

Our portfolio continued to make strides - raising funds, growing their teams and increasing their reach.

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Fundraising

- Insurtech Lami raised a $3.7M seed extension led by Harlem Capital

- Lifestores Healthcare raised $3M to expand its pharmaceutical marketplace across Nigeria

- Pezesha raised $11M backed by Women’s World Banking

- Nigeria’s OnePort 365 raised $5M to digitise freight management in Africa

- Ivorian e-commerce startup ANKA raised a $6.2M pre-Series A

- BetaStore raised $2.5M to Cameroon with plans to expand to 100 cities in Nigeria, Ivory Coast and Senegal

- Norebase raised $1M to scale incorporations in Africa and beyond

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Growth & Partnerships

- AFEX and NG Clearing Limited signed an agreement to develop the infrastructure for commodities’ futures contracts in Nigeria.

- EMTech officially became a technical partner to the Digital Dollar Project.

- Intelligra partnered with MTN on smartphone financing

- TalentX announced their latest initiative Grid!

- Norebase and Built joined the second cohort of Google for Startups Black Founders Fund for Africa

- SeamlessHR partnered with Special Olympics to launch Codeable

- AFEX expands into Kenya to boost food security

- Curacel launched a new interface, Grow, that allows digital businesses like those in retail, fintech, e-commerce and logistics to add insurance to their core products

- In 2022, Curacel also grew its transaction volume by 600 percent and increased its revenue by 500 percent

- MDaaS has expanded its reach to 10 out of 36 states in Nigeria, with a total of 15 diagnostic centres and 2 affiliate partners across these states. 

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Exits

- Digital Realty concluded the acquisition of Medallion’s data center business

- We also exited our position in Nigeria based student accommodation platform, Student Accomod8, to a leading Nigeria based asset manager.

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Overall, our portfolio companies have created over 100,000 direct and indirect jobs in their communities, boasting a combined revenue of over $350 million. We have supported our portfolio across Talent, Business Strategy, Regulation, Institutionalisation and Funding; and we look forward to continuing in this stride in 2023.

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‍Lowlights

Looking back on the progress made in 2022, we must also acknowledge the challenges we faced. One of our portfolio companies struggled and eventually had to shut down after operating for a year. Unfortunately, Kune, which represented 0.9% of our committed capital, was unable to raise its next round to sustain operating costs, even though it had sold more than 5000 meals and had 6,000 unique customers. Kune handled most of its operations in house and building the necessary central kitchen and satellite hubs required for the necessary geographical spread proved to be quite challenging.

In Africa, tech driven companies with physical products can provide valuable solutions and fill infrastructure gaps, such as e-commerce platforms for food or agricultural products, or innovative last mile delivery solutions. While scaling up such ventures may be challenging, VCs can achieve high ROI and contribute to critical infrastructure development by investing in these companies, which can also create strong moats through exclusive use of complementary assets, proprietary tech, and operational efficiency. However, these companies still struggle to raise funds since substantial financing in Africa is allocated to fintech and copy-and-paste models from developed economies.

Recently, hybrid models have gained ground across African markets, with founders and investors alike leaning into a mix of online and offline operations and customer acquisition. This trend has been particularly helpful in addressing the lack of infrastructure in Africa. While losing a portfolio company is never easy, we have used this experience to further develop our thesis for our next fund going forward. For digital-led companies with physical products, we believe co-investing with a larger fund that shares similar convictions and has deep pockets is critical for success.

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‍Our Vision for Fund II (Anfani) - Broad Based Wealth Creation

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Our growth and lessons from Fund I have further cemented the ideals behind our thesis for our next phase.

The foundations of a lot of African value chains are still broken; and more often than not in the funding boom, we saw ideas/startups spring up based on serendipity as opposed to solving actual problems and needs. The ecosystem was often seen fumbling around ideas that seemed attractive to Silicon Valley and external investors, whilst neglecting the fundamentals of African markets and the forces of unit economics. 

We believe a thesis-driven approach is best suited for Africa, as it enables our firm to cultivate both systems thinking and a data-driven culture. Drawing inspiration from Wayne Gretzky, our thesis-driven approach ensures that we concentrate on where the puck will end up, rather than pursuing opportunities that’s already popular which allows us to exercise price discipline.

With the ongoing market corrections, we believe that it is now time to build and invest in the larger portion of the African population, which in turn creates a larger market for goods and services. A study by the International Monetary Fund found that for every 1% increase in the income share of the bottom 40% of the population, GDP growth increased by 0.38%, while a 1% increase in the income share of the top 60% resulted in a 0.08% increase in GDP growth. From a Total Addressable Market (TAM) perspective, companies that focus on broad-based wealth creation offer a large market with room for scalability, growth, and profitability.

Anfani investments will target companies utilising technology to generate new income opportunities or cater to traditionally underserved markets, focusing on areas such as digital payment systems, credit infrastructure, financial education, creative economy, online marketplaces, scalable retail, food and agriculture, logistics, manufacturing supply chains, access to quality healthcare, financial market infrastructures, digitization of regulations and compliance delivery, digitization of the informal economy, and our favourite, City-as-a-Service.

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The New Face of Consonance

We understand that trust is the cornerstone of progress and that is why we have refreshed our identity to better express our core values and mission. We are aware that success is not only achieved through investments, which is why we believe that Innovation, Collaboration and Systems Thinking are essential elements to drive National Prosperity.

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The Consonance logo is an important part of the brand, conveying a brand promise and identity that resonates with its name. Designed to resemble a Mobius strip, which in itself is a perfect mathematical reflection of seamless synergy, the Logo represents the core ideal of the Consonance brand; our inter-relationship with our clients and our never ending desire to create Impactful & Sustainable Enterprises in Africa.

Our new identity showcases our dedication to stay in alignment with the needs of our entrepreneurs and investors. 

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Final Words

In conclusion, our experiences navigating market highs and lows have imparted invaluable lessons in discerning the subtleties between the lines. We're also thrilled to see some of our portfolio companies not only surviving, but thriving and becoming long-lasting businesses that will contribute to Africa's economic growth for years to come. We stand resolute in our pursuit of investment value, continuously reevaluating our approach in response to market conditions and seeking that which is rare and valuable. The Anfani Fund's emphasis on broad-based wealth creation in Africa epitomises our dedication to effecting lasting change on the continent and generating exceptional returns for our limited partners.

As part of our rebrand, we're committing to community building and engagement like never before. We believe that by fostering a strong community of entrepreneurs, investors, and other stakeholders, we can work together to create a brighter future for Africa's startup ecosystem. That's why we're inviting everyone to sign up for our newsletter, where we'll share insights, opportunities, and news from our portfolio companies and the wider startup community.

2023 is gearing up to be a definitive year for the African innovation ecosystem. We hope to see more entrepreneurs with innovative ideas and the drive to make them a reality. With our renewed focus on community building and engagement, we're excited to play our part in supporting the growth of this vibrant ecosystem.

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