- Tell us a about DOB Equity, its roots and what its purpose is in East Africa?
DOB is backed by a Dutch family that has its roots in entrepreneurship in the Netherlands. They were very successful in retail and actually started the first chain of supermarkets there. The company grew further in retail in the Netherlands and abroad. From the late nineties the family started pursuing social activities globally with a mission to combine entrepreneurship with impact, the foundation for what DOB is doing now. Over the years we have focused our strategy on investing equity in scalable and innovative companies that have the potential to impact the lives of low and middle income communities in East Africa.
- What criteria should companies have in order to receive your funding?
The key to all investments we do is the company’s management team. We invest in people. Anyone can have a great idea but in the end it’s all about execution. Other criteria are proof of market; innovation and a scalable and financially viable business model. All companies we invest in must have impact either through its product or service or by offering a market to producers. We can invest across most sectors but have an interest in retail and distribution, logistics, agri-business, education and renewable energy.
- What has been your most strategic/profitable deal in East Africa to date and why?
One of our most successful investments has been in M-KOPA Solar, headquartered in Nairobi, Kenya, a company that has grown into one of the world’s leading pay-as-you-go energy providers to off-grid households. As one of M-KOPA’s first investors, in July 2010 DOB Equity’s rational was to test the world’s first solar leasing product using mobile money and embedded GSM technology. I remember meeting the founding team in early 2010 and being impressed by what was only an idea then. We invested later in the year and have been extremely proud to be part of this company’s journey ever since. This is an example of a management team that has been able to execute on an innovative and scalable business plan, build a company that people are proud to work for, build a brand that people want to be associated with and have a tremendous impact with over 500,000 solar home systems financed and continuous product development. DOB Equity did a successful (partial)exit of M-KOPA in 2015, proving that sustainable impact and solid financial returns can go hand-in-hand.
- What challenges have you faced in making deals in Africa?
One of the challenges DOB faced when it was initially based in the Netherlands was not being on the ground; I would be in the region every six weeks. However, we now have two offices in East Africa, in Nairobi and Dar es Salaam and being closer to our partners allows us to add more value and pro-actively manage the portfolio. Obviously, pre-investment being on the ground makes business development and due diligence much more effective.
- What advice do you give local firms so they can meet international standards in attaining funds from PE firms such as yourself?
The advice I would give to companies would be to try to focus on best practices across the organization; making sure governance structures are in place; proper financial accounting is implemented from the on-set and management has skin in the game. Alignment between all shareholders is crucial for a private equity player.
- Where do you see East Africa’s economy in the next 5-10 years?
I am a strong believer that every inefficiency holds an opportunity to make money and further socio-economic development. With private sector developments happening in East Africa, new business models being rolled out, together with the entrepreneurs who are determined to fight for their dreams make it a very exciting time to be in the region as an investor and as part of the business environment.
Two areas I think we will see develop over the next 5-10 years are in local value addition and agriculture. With GDP growth, urbanization and a growing and young population there is room for building new brands specifically marketed to the middle and low income consumers. Companies that focus on efficiencies throughout the supply chain;decreasing waste by working closer with suppliers and seeing them as partners;making use of technology to support its operations and focusing on manufacturing quality products. Many industries have been dominated by three or four companies that have been governed by the same people for decades. I look forward to the next generation of East African entrepreneurs who see an opportunity to deliver a better product at a more affordable price, making these accessible to many.
In terms of development in the rural areas, and one which I hope will gain traction and funding, is the shift from small-scale to commercial farming. Many development programs focus on building smallholder farmers. But in my opinion, and similar to micro-finance not being the solution to development, small-scale farming is not the solution to building stronger rural economies. Not everyone is an entrepreneur and you need certain character traits to be able to build a farming business. By pooling land together and identifying the best suited manager or entrepreneur to operate the farm will lead to better use of capital, technology, knowledge, use of mechanical equipment, access to inputs and finance, be it in crop farming or livestock.
- Which market do you see most attractive and why in East Africa Region?
We expect to see demand grow for better logistics as international companies come into the region and as local companies grow and look for higher quality services. Another area of interest is in local manufacturing and specifically products substituting imports.
- What opportunities do you see in oil and gas boom in East Africa and how is DOB taking advantage of these opportunities?
DOB does not invest in the oil and gas sector; however we could look at the industrial sector linked to oil and gas such as transportation or logistics.
- What advice do you have for the governments in improving the investment climate in East Africa?
Improving the business environmentfor investors and companies. Making it simple and quick to apply for permits and licenses. Investing in infrastructure.
About Saskia van der Mast
Saskia van der Mast is an Investment Manager at DOB Equity and joined the team over a decade ago. Saskia is currently based in Nairobi, Kenya. She brings a wealth of experience in impact investment and has played a leading role in building DOB’s strategy and portfolio of innovative, scalable and impactful companies. She amongst others has been responsible for sourcing and completing investments including M-KOPA, Bridge International Academies and Countryside Dairy.
Saskia serves on the Board of the East Africa Private Equity & Venture Capital Association (EAVCA) and is a board member of various portfolio companies.
Saskia holds an M.Sc. in International Economics and Business from the University of Groningen, The Netherlands, with semesters studying at La Trobe University in Melbourne, Australia and Stellenbosch University, South Africa after having spent most of her youth in London, UK.
8194 LA Veessen
1st Floor, ABC Place
Entrance next to Restaurant Seven
Waiyaki Way, Westlands, Nairobi
1st Floor, Kilwa House
369 Toure Drive, Oysterbay
Dar es Salaam