Efayomi Carr is a principal at Flourish, a venture firm investing in entrepreneurs whose innovations help people achieve financial health and prosperity. Efayomi in this interview with Modestus Anaesoronye, shares his experience in entrepreneurship, social impact and finance, as well as his role at Flourish with focus on Nigeria and African startups.
As a venture capitalist investing in start-ups, what are your criteria for picking start-ups for funding?
We take a thesis-driven approach to our investments. Each year, we develop a strategy based on what trends we see in the market and where we see opportunities growing. When evaluating individual companies, we look at the team, addressable market, the product, and existing traction.
We back entrepreneurs who have high integrity and some track record of building and scaling businesses or products. We also support companies who are targeting a large, addressable market opportunity. The bigger the market size, the greater the likelihood of growth and the more attractive exit opportunities the company will have. We also look for great products and services with a competitive edge that are long lasting. We look for a solution to a real, burning problem that hasn’t been solved before by other companies in the marketplace.
With your experience in the system particularly at Flourish, what is your view of the Nigerian start-up ecosystem?
The Nigerian start up ecosystem is growing first and foremost. It is a leading hub for enterpreneurship on the continent because of some factors, such as a growing number of engaging international investors, a huge population with access to technology, and a growing number of start-up support organizations active in the ecosystem.
What are the challenges and risks associated with funding entrepreneurs/start-ups and what are the measures you adopt to avoid business failure?
Venture capital is by nature a risky asset class. We acknowledge that most startups fail and the path to exit is often long and challenging. Any returns may take several years to materialize. Most start-ups take five to seven years to generate any investment return, if any at all. It may also take many years before you will know if a start-up investment will generate any return.
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To mitigate this, we have a data-driven approach to what sectors we invest in and which entrepreneurs we choose to back. We also support our portfolio companies throughout their journey. We provide resources, advice, and networks that can help them whether the inevitable storms they will feel over the course of their journey. Given the stage at which we invest and the challenges of operating in Africa, we recognize that some of our companies will inevitably fail. However, by leveraging our experience to provide sound advice and by building a balanced and diverse portfolio, we are able to mitigate some of this risk exposure and better support our companies.
Considering the economic situation in Nigeria and other African markets, what are your fears about investing in start-ups?
We acknowledge that some startups will fail; however, even if they fail, we hope the entrepreneurs we back, will push the ecosystem forward by tackling a challenge and delivering a product that has not been done before. While we worry about companies failing, we are energized that even these companies provide valuable lessons and learnings.
Aside from funding, what other roles do you play to ensure the growth and success of start-ups operating under your investment?
At Flourish, we generally take a board seat after investment. This means that we play a formal role in providing counsel and support to companies throughout their journey. We also provide a host of resources to help them tackle the day-to-day challenges like recruitment, marketing, financial planning, and product development. Finally, because we have a global portfolio and footprint, we expose our start-ups to networks that help provide them with global best practices. This is integral in ensuring that we are building world-class companies with top teams.
Career profile:
Before Flourish, Efayomi was Head of Strategic Finance for Lori, a tech startup building cost-saving market infrastructure for the trucking industry in Africa. Three months after joining Lori, Efayomi was appointed Interim CFO, managing a team of 15 finance professionals across several geographies and overseeing the core financial functions. He also guided the company financially through the COVID-19 economic crisis, raising emergency capital, renegotiating significant debt, and finalizing key partnership agreements.
Prior to working with Lori, Efayomi covered Africa with venture investor Quona Capital and was an associate at Boston Consulting Group. He also worked at Jumia, where he was Head of Marketplace, growing that business from launch to roughly one-quarter of the platform’s revenue. Later, Efayomi spent six months seconded to the government of Sierra Leone, as the most senior government official leading data management in the effort to combat the 2015 Ebola outbreak.
Efayomi started his career cofounding Transparent Nigeria, a digital journalism and data sharing platform. He is a graduate of the University of Pennsylvania with an MBA from Harvard Business School. He is based in Nairobi, where he is training for his next marathon.
