“I never dreamt of being an entrepreneur”, says Anu Shah, head of EFI Hub, a startup incubator trying to raise funds for social impact tech startups. The new fund of $5 million will be reached by end of the year. This is Anu’s story in her words, of going from entrepreneur to investor and how her journey has shaped the mission of EFI Hub and its subsidiary, EFI Capital.
In 2016 while I was deal sourcing in Rwanda, I met CEO of a Craft Brewery, run and operated by a woman. During our conversations, I learnt that she had faced many odds in her life – forced marriage, domestic abuse, and gender discrimination. But through her brewery, she intended to build a livelihood for herself and empower other women in the community – a business that truly spoke to me.
Professionally, I had to turn down the deal, but my interest was still piqued. I decided to consult the CEO pro bono. I assisted the business in closing a crowdfunding drive that raised $ 110,000. The capital was used to build the bottling line and hire 50 women. This success was the most fulfilling of my life; it meant jobs for women without means, jobs for women like me. This experience and all of the past experiences of overcoming challenges at work only remained isolated incidents until I came to Harvard in the spring of 2017. I found my inspiration, support and mentors on Harvard Campus who motivated me to create something which will generate impact on a larger scale.
Through their guidance and funding from my classmate at HBS – Lavan Gopaul, and support from other Harvard Alumni (who have joined as advisors) the idea of replicating the Rwandan success globally, came to form. And I founded ‘EFI Hub’ a startup incubator with the goal of empowering startups in emerging and frontier markets of Asia and Africa. I scored moderate success with EFI Hub.
EFI Hub was launched exactly one year when I was at Cambridge. We took startups from East Africa and India under our wing. We successfully raised funds for two startups in East Africa. For one we raised $50,000 and for another we raised about half a million in equity. We are now expanding our presence to South East Asia, starting with Singapore and Indonesia.
Africa is a very challenging geography and I felt that I was too early in that market and I lacked the right skills to achieve the scale as an entrepreneur. It was around this time that I was talking to an old friend who was CEO for one of the Rocket Internet Ventures and he mentioned that Rocket Internet was looking for a Co-Founder / CEO for one of their startups in Singapore. And I looked no further to build my skill sets. Rocket Internet is definitely the university you need to graduate from to build your entrepreneurial skill sets with low economic risk. And voila! Ushift happened.
Being an entrepreneur is tough. Entrepreneurship tests you on several levels – personally and professionally. You require a nerve and heart of steel and an immense capability to absorb and internalize everything, making sure you don’t pour any insecurity, frustrations on any of the team members around you. One has to take toughest decision by keeping all emotions at bay.
Why I decided to become an investor
I have a prior background in M&A and Private Equity. So I understand the dynamics involved in the investment decision making and being an entrepreneur now I also understand the challenges involved in fund raising. See traditionally, it takes a long time to raise funds. It is even more time consuming when you are raising funds through an accelerator and/or intermediaries. The objective of EFI Hub is to empower entrepreneurs and accelerate their growth trajectory. At EFI Hub we work closely with the entrepreneurs on regular basis to resolve their business issues. We have already spent a significant amount of time in getting to the founders, their team, their business, their competition. So when there is a call for capital we are in a better position to make a faster and a more informed decision on investment. This in turn accelerates the process for the founders. All in all, it’s a win-win situation for entrepreneurs and our limited partners (for there’s less time involved in due diligence and the risk attached with this investment is lower).
The new fund we are raising
EFI Capital will be the investment arm and subsidiary of EFI Hub. We are closing our first fund for $5 million. Our investment strategy is simple, we are a ‘Founders Fund’ focused on empowering the entrepreneurs. We believe in giving full space to the entrepreneurs, with minimal meddling from our side (but full support on operational aspects of the business) and perks such as early liquidation or dilution options. You see, many entrepreneurs are forced to manage on penury because most VCs don’t give them this option. It’s a lot of added pressure on their personal lives and we want a more stress free environment for them.
The fund will focused on emerging markets of India and Southeast Asia. It will be largely sector agnostic but with a preference for tech, education and health care segment. Within tech, E-Commerce, Fintech and Insuretech will be our prime focus. Our average ticket size will be in the range of $50,000 to $500,000.
We are currently in touch with few HNIs, entrepreneurs and VCs in UK and Indonesia. We have secured $1.3 million already and will be working on aggregating the remaining $3.7 million by the end of this year.