EP15 — Deepali Nangia & Rana Abdel Latif, Speedinvest Host: Jamie Lane Guests: Deepali Nangia (Partner, Speedinvest) & Rana Abdel Latif (Partner, Speedinvest) --- COLD OPEN Deepali: What you're seeing in front of you today are two smiling faces, but it wasn't always the case. Fundraising, they tell you, is a marathon and not a sprint. We really, really felt what that means. Deepali: Everybody says they want to be catalytic as an LP, but very few LPs are truly catalytic, because everybody waits to see who's going to jump on that bandwagon, and with what they say yes. Rana: Founders in Egypt have succeeded despite of. This really breeds strong and resilient founders that will continue to get up every single day. Rana: Whether it was myself and Deepali, or the lead investment team at QIA, the lead investment team at EIB, and the lead investment team at Mubadala, all female-led teams. --- THE FUNDRAISE BEHIND THE HEADLINES Jamie: Deepali, Rana, thank you so much for joining me on the podcast. Deepali: Thank you for having us, Jamie. Jamie: The most natural place to start is with the latest fundraising news you guys have announced. You've got QIA coming through the Fund of Funds programme, you've got European Investment Bank anchoring the Africa-dedicated fund up to €40 million as well. I think a lot of people reading the headlines would think, oh, this is fantastic, what a brilliant overnight success. The reality, I'd imagine, is very, very different. Could you walk me through, guys, maybe the last 12 to 18 months and what that actually looked like behind the scenes? Rana: I think to really get the essence of this process, we have to go a little bit further back than the 12 to 18 months. Maybe almost three years ago, when this whole journey started, we decided to stop investing opportunistically and be a lot more intentional about the region. That's when we identified a gap, but also an opportunity for us to come in and collectively raise capital from sovereigns, from DFIs, and institutional family offices in the larger MENA region. Rana: So how has the 12 to 18 months looked? It's been an uphill, downhill, uphill, downhill battle. What you're seeing in front of you today are two smiling faces, but it wasn't always the case. In fact, it was mostly not the case. Fundraising, they tell you, is a marathon and not a sprint, and we really, really felt what that means. I personally have done fundraising sporadically in the past, but never as a core focus like we have for this fund. It's taught us quite a bit. It's taught us a bit about resilience. It's created a lot of empathy for our founders who actually have to go through this a lot more frequently and a lot more regularly. And it's held us together as a team, which I think is the most important thing as we're now ready to launch this fund and start deploying in the region. Deepali: I completely agree. Rana and I still have a cry every now and then together. Between sharing rooms at SuperReturn Riyadh, getting on the phone when we get a rejection from an LP or when we get a yes from an LP. We actually got a DD with QIA. My first meeting with EIB, just to go back, because EIF has known Speedinvest as an institution for many years. They've anchored our previous funds. My first contact with EIB was actually June 2023. I went back and looked yesterday, to try and understand the sales cycle a bit better, which is really what I call an enterprise sales cycle, right, with these large DFIs and sovereigns. Deepali: I remember I spoke to them actually about an emerging manager programme, because I was setting up the fund of funds, as you know, the one that we have mostly for capacity building. I actually reached out to them because we were looking at African fund managers and I wanted to understand if EIB actually invests in smaller funds. That's how I initially got connected to them. Strangely, we started thinking about a few months later our own Africa and Middle East and emerging market strategy, to double down on it. So I had a first meeting, and then I met the head of VC, who's Matthew at the EIB, and then actually reached back out to him a few months later saying, we are thinking about our own emerging market thesis and would love to have a chat. Deepali: So it was June 2023. I did get introduced to Nora, who's our sponsor, maybe a year and a half later, so September, maybe a year later, September 2024. And then Jan 2025, they started formal due diligence on us. December 2025, we signed the LPA. Technically of course, I knew them for a while, but the actual process was about one year from the start of DD to signing. --- FROM OPPORTUNISTIC TO INTENTIONAL Jamie: Can you talk to me about where the conviction was born out of to pursue a dedicated fund for the region, and to shift tack from that more opportunistic approach that you've taken up to this point? Deepali: Speedinvest have been investing in the emerging markets since 2013. We had our first investment in Iyzico, which was a Turkish payment gateway. We had an exit to a South African business and the business continues to outperform. We did really well despite the Turkish depreciation. Then we did FairMoney and Moove in Nigeria, and FairMoney and Moove are the darlings of Africa, at least Moove has expanded beyond Africa. Then we opportunistically did other markets. We did a little bit of India, a little bit of LatAm, the Middle East, Egypt, and that's how we met Rana, and that's a story to tell as well. We had 30 portfolio companies at the end of the day in emerging markets. Some of them were doing really well, some even better than other bits of the portfolio. We decided to bring together a formal team and go slightly more deeper rather than just opportunistic. Rana: It's really about creating more intentionality and building a locally embedded strategy, if you may. Because we understood that in the regions where we invest, in the countries that we invest, copycat business models don't always work, but adapted business models is what succeeds. While we had a lot of success with our portfolio companies, like Deepali mentioned, Moove out of Nigeria, FairMoney out of Nigeria, Khazna in Egypt, Abhi from Pakistan now in the UAE, we were doing that remotely. We felt like doubling down with boots on the ground, with the right team on the ground, with the right partners and capital allocators on the ground, could really help us to continue to access quality deal flow and continue to support founders that are building for the region. Jamie: I love what you mentioned there around this sort of pattern recognition that you can do across certain emerging markets. Like, as opposed to looking to the west, seeing what's worked, and LatAm, and maybe that can be applied in a revenue financing perspective, or like Wayflyer in Ireland, and maybe something similar they're doing with Flow48 in the UAE and South Africa as well. Deepali: I just want to add to what you're saying here, Jamie, because we sit as a Europe, Middle East and Africa FinTech team. We have a deal flow call every week where the whole team is together and we are discussing business models in Europe as well as business models in other parts of the world. So cross-leveraging the learnings is hugely important. Exactly like you say, the revenue-based financing model, we've done it in Europe and done it in other parts of the world. We did re:cap in Germany, after which we did a similar business in Brazil, and then ultimately we passed on Numida in Kenya because we didn't think that model would work in Kenya. I personally grew up in India, so I look at those markets. Of course Africa is very different, it's 50 markets versus one market, but there are a lot of learnings we can leverage from other emerging markets that are maybe 15 or 20 years ahead of Africa. Rana: Just to add a minor point, and not to toot our horn, but if you look at how our team is built, we're quite a diversified team. We come from different parts of the world. While we might be looking at a deal in Nigeria and we don't have anyone that is from Nigeria on our team yet, we are a team that understands that local nuances really do matter, and they matter more than people expect. It's not just about looking at global models that were successful elsewhere and trying to replicate them, but really looking for the best founder adapting a global idea into the local nuance and the local reality. It really takes a team that has a wide view of the world to be able to identify that small nuance. --- LEVERAGING SPEEDINVEST'S GLOBAL PLATFORM Jamie: Being part of Speedinvest, which is this broader, much larger vehicle, is that helpful as an edge or a point of differentiation, with regard to even the number of deals that you've seen? Reading before, 298 active deals across 40 countries and multiple different industries. Is that something that's persuasive when you're pitching to sovereigns regionally, that you can point to that track record? Rana: From a fundraising perspective, absolutely. Sovereigns today don't just want to hear that you're going to take their capital and invest it elsewhere, or even take their capital and invest it in their home countries. That's simply not enough anymore. You have to be able to demonstrate as a fund manager how you can contribute to that positive FDI of those countries that you're raising from. Having such a large-scale global portfolio such as ours at Speedinvest helps to position us as a unique fund manager that is not only going to be investing in business models and attracting companies into the region, but also helping our European portfolios scale into those regions, and with that bring external capital and FDI. That's a very important point that I've seen the development of over the past few years. The narrative for capital allocators, especially the sovereigns, has shifted quite dramatically from simply reinvest into our countries, to what can you do for us to help deploy more capital from outside our countries. Deepali: Obviously there's a whole capacity building component, right, in nascent markets. Speedinvest started as a €10 million fund. We've done a lot in the ecosystem, not just for ourselves, but continue to do for smaller managers and female founders. All of that expertise we can actually take across to these nascent markets. I think it's very helpful when we tell that story to LPs, when we also tell the story of really bridging Europe with other parts of the world. Speedinvest corporate, we have massive LPs at Speedinvest, that we use, and also entrepreneurs in the European portfolio that we use as advisors into Africa and the Middle East. That cross-leveraging really helps tell the story, and definitely very, very helpful being part of the Speedinvest brand. --- INSIDE THE QIA DEAL Jamie: Let's continue to pull on that thread as much as I can, then maybe in relation to QIA specifically. I covered the QIA Fund of Funds expansion at Web Summit quite extensively. Suddenly a massive programme, they've upgraded it to $3 billion, somewhere about 12 fund managers announced. Externally looking in, you'd say, OK, yes, Qatar's startup ecosystem is quite nascent. Rana, you touched on that there, it's no longer just sufficient to go, yes, we're going to invest in the domestic side of things in whichever country the sovereign is positioned in. Obviously in Qatar that wouldn't necessarily make sense, given deal pipeline there. Is there an expectation that you're going to be investing in Qatari startups, or is it more that Doha is a base for deploying into the wider region? What are the strings attached, without breaching confidentiality clauses? Rana: I think what's important to highlight here is what each fund manager is bringing to the table. If you look at the different fund managers that were a part of either this cohort of the Fund of Funds programme or previous cohorts, you'll find that we're quite diversified in terms of stage, sectors, and investment style. What Speedinvest has demonstrated in the past, and is definitely planning to continue to do so in Doha, is its ability to attract its global founders, whether from the European portfolio or from our EM portfolio, into certain countries to set up space there and use it as a launchpad. The market in Doha, I wouldn't call it necessarily nascent, but it is an emerging market, and we are seeing a quality pipeline and quality deal flow coming out of Doha. But what's more important to really help invigorate this ecosystem is to make sure that there's healthy competition. That means that companies coming out of neighbouring markets are also able to expand and launchpad out of Doha, and build their businesses and have business development and commercial agreements with local companies, and grow and scale in Qatar. But that's not an expectation so to say, it's part of our value proposition as Speedinvest overall. Deepali: Jamie, we've done this time and time again. We started in Austria, we expanded into DACH with Munich and Berlin. We land and expand. We did the same in Paris. We recruit locally, set up a local office, and tap into local deal flow and local LPs. It's something we naturally do as part of our evolution. So it's just natural that we would like to contribute to the local ecosystem and do everything possible, like we do in Europe. --- MUBADALA AS EARLY ANCHOR Jamie: Talk to me about Mubadala then, and how that's come about. Rana: Mubadala was actually one of the very early conversations that we had. They're co-investors with us across our European portfolio, but more importantly Moove as well. It was a natural first step for us as we started to test the waters for this fund and see the appetite. Mubadala is not only a global investor, but is a large advocate in the local UAE ecosystem and in the GCC as a whole. We were lucky enough to be able to have very early conversations with the team and be part of their UAE Alternatives Fund programme. They actually came in much earlier than the other investors with a hard commitment, way before we were able to lock in the larger commitments from QIA and EIB. I just did want to give them a shout out there, because they took a chance on us. They saw the value that we brought as a team. They saw the portfolio that we brought, not only in the UAE but outside of the UAE as well. They really worked with us to help anchor, or even pre-anchor this fund, until we were then able to lock in additional pockets of capital. Deepali: To be honest, this goes back to being catalytic, right? Everybody says they want to be catalytic as an LP, but very few LPs are truly catalytic, because everybody waits to see who's going to jump on that bandwagon before they say yes. There's another one on the African side, I obviously can't mention, but they actually took the first punt on us, and to be honest, they were truly catalytic for the process. --- BOOTS ON THE GROUND Jamie: This idea of boots on the ground, so what does that look like practically speaking, as far as this fund is concerned? Rana: We've invested across the region, 30 plus portfolio companies, and we've done it almost remotely many times. Many of us would travel for months at a time, spending, really spending time understanding the local markets, understanding the ecosystem, building relationships, and making investment decisions following that. But like we said in the beginning, this fund is a lot more intentional than an opportunistic approach to the region. With that, we understand we do need to have boots on the ground. We do need to have anchors in the region. Our fund is domiciled in ADGM, and with that, the UAE becomes an important aspect of the fund. We are also looking to set up our office in Qatar. That comes with our commitment to continue to attract our regional and our global founders to the region and helping them to expand. Of course, they wouldn't be able to do that if we aren't already there, and we already have a setup there and key partners on the ground to support them as well. Deepali: For Africa, Rana as Egyptian, so she was like the first boots on the ground. She's from North Africa. We have Álvaro on our team who's going to relocate to Nairobi at first close. He spends a lot of time in Africa already. We are looking to add someone on the team. We've actually been talking to this person for many months now, and at first close they're locally based in Africa. We definitely will have Kenya as an office, and then we'll have other outposts in Africa as well. Jamie: Can you help me understand, so it's a MENA Africa fund, am I correct? I just want to make sure that I'm characterising this correctly. Deepali: I think the strategy is an emerging market strategy. So it's Middle East, obviously SSA, North Africa, Turkey, Pakistan, Bangladesh. That's the strategy. Now the reason we have a two-fund structure is because of LPs and the different mandates, to be able to accommodate everybody. So it's as simple as that, but it's a broader strategy. We're trying to coin a new acronym for the region, because you have MINT, which is Middle East, Pakistan, Turkey, SSA which is Sub-Saharan Africa, and then we're trying to find a way to make it like a combination of MENA, MENAPT, and find a new acronym for it. If our listeners have any help on that, we'd be more than welcoming to suggestions. Rana: It's as good as anything else. Can we call it a growth market fund, a growth market strategy rather, because these are where the future growth is going to come from, in our view, in the world. --- THE SERIES A/B CAPITAL GAP Jamie: Let's get into the nuts and bolts for a second as well then, because founders who are listening will be interested to know. What does a typical investment from this fund look like? What stage are you writing cheques at, what size, what kind of ownership are you targeting? Rana: We've identified we're targeting quite a large region, and so there needs to be a little bit of flexibility with how we tailor our portfolio construction, depending on the markets that we're investing in. We see a massive opportunity across both the Middle East and Africa to fill in the gap of early growth. You have a lot of investors that are doing very, very early pre-seed investments and supporting the founders from day zero, and you have some investors that are now coming in and doing that Series C onwards, or that real pre-IPO growth capital. But very few are able to support, and are able to underwrite (I use that word with intention) to underwrite deals that are at the Series A, Series B, and that need that early growth capital to help scale their businesses into critical mass. As a general strategy, that's what we're targeting. Of course, we're going to be a little bit more flexible if we find an opportunity that is slightly earlier stage but has the strong credentials of the founders, the market, and so on. That's something we would look to entertain. But as a core strategy, we are early growth and we want to continue to plug in that gap. Deepali: One thing you have to know is that Africa is not an easy market, Jamie, you know this. So you have to be optimistic. That's how we discuss this with EIB, where EIB completely understand. At the end of the day, you want to make a return, you want to be supportive to your founders, you have to be patient, you have to be able to bridge when you need to bridge. These markets do take longer. The mandate, I could do a seed deal if I think it's highly interesting in the market. But most of them, when we see extension Series A, that's where we find the biggest gap. We can do a pre-seed cheque if we want to do a pre-seed cheque. You have to be optimistic in these markets. Maybe next time around we also have a debt component to the fund, I don't know. It makes a lot of sense to me. If a company's doing really well and they need credit, because a lot of these emerging market companies are credit-led, why would I not be able to do debt as well? You need to be optimistic and really think like that, and that's how we've constructed it with our LPs. Jamie: Everyone else is doing debt these days, so why not? I'm going to establish my own money debt fund at this point. Deepali: It's interesting that emerging market debt has done well. If you look over the last few years, private credit, as you know, in the western world will be hit more, because the decimation of SaaS is going to hit those ones more. SaaS has not been prevalent in emerging markets, those models. So I do think that's still an opportunity. And opportunistic capital, if you talk about the NICE facility a bit, it's callable equity. You always need to innovate on the capital stack, and so we are constantly looking at those things as well for our founders, to see how we can have an impact there. --- THE NICE FACILITY AND CAPITAL STACK INNOVATION Jamie: Let's maybe touch on that then, the NICE funding with STV. How did that come about? Deepali: It was actually somebody on our team, Barry, who also works with us. He spoke to STV. He and I sit on the board of MoPhones together, and MoPhones was raising equity. To be honest, we had discussed callable equity structure at the Oxford programme, which is run by EIB and Boost Africa. We had discussed those last autumn. When this came about, made a lot of sense, because we are thinking about flexible capital in markets where growth capital is hard to get. What the NICE facility does is it's essentially, the founder has flexibility to invest or spend it as they choose, and you don't have the same stress as you would with debt, and you can also buy it back. I do think that those structures, you will see more innovation on the capital stack in Africa. We are looking, Jamie, just so you know, right now at securitisation as well. Once we get there, we will write about it. You'll see more and more of this. It's exciting because you need different forms of capital, because not necessarily one thing is right for this market. Rana: The way we think about it is, how can we expand the founder's toolkit? Because as we know, equity isn't always the answer, and like you said Deepali, debt isn't always available in these markets. So how can we expand and provide our founders with not just capital, but also flexible capital? --- FINTECH, SMES AND AI-NATIVE INCUMBENTS Jamie: Is there any particular sector that you're prioritising? Obviously FinTech has long been, I suppose, Speedinvest's bread and butter. As far as the deals that may be made in the Middle East, off the top of my head, it's Maalexi, obviously earned wage access with Abhi, payments, lending, insurance. What do you think the biggest gaps and opportunities are right now? I'm obviously conscious, Rana, of your own background as well with Nclude, which is exclusively FinTech focused. Rana: Simplistically, we still see that the region has a highly under-leveraged, under-serviced SME group and consumer group. We still believe that we're in a region, or at least in the GCC, where we have a very avant-garde regulator that is open to innovation and listens. Initially looking at the market, we were looking at ways to service and to better service those SMEs and consumers, in a more traditional sense, leverage those consumers and SMEs. In the past year and a half or two years, things have shifted dramatically, with really AI at the core of all businesses, becoming, rolling out, and AI-native fintechs and FinTech founders popping up and setting up businesses. We still see an opportunity in how to service those SMEs and consumers, but we're trying to come up with what are the different advantageous entry points to those businesses that are beyond the traditional forms of financing and the traditional forms of lending. Rana: Lots to unpack there. It's interesting because a few years ago we used to refer to banks as the incumbents. What we're seeing more recently is that fintechs are becoming the incumbents, with this new wave of AI-native fintechs. So how can AI-first companies improve efficiency, improve costs, and improve internal processes? How can they rebuild traditional businesses like credit underwriting, collections, fraud detection, even compliance, all that backend support layer across the board, not just for banks and fintechs, but across the board? How can that be redefined today? Deepali: Completely agree. It's 80% of Africa is long tail, and 80% of most emerging markets is long tail. Everybody tries to focus on the 20% and therefore you run into thin bullets. You cannot really build a business of scale. So it really is the long tail and really building out the boring bits and the plumbing of the long tail, which makes the credit decisioning or credit underwriting, or increases financial inclusion, whether it's through e-invoicing, KYC. All of those tools need to be built. Very excited about that. That's where you also see the embedded finance models come out, where you're adding another revenue stream to a logistics business, to an agriculture business, to a mobility business. We are quite excited about those models. Africa is really underserved in credit, so is the Middle East, so is Pakistan, Bangladesh. And then the payment rails, obviously, are all very interesting. Everybody's building in payment rails, cross-border rails. --- AI-NATIVE STARTUPS VS FINTECH INCUMBENTS Jamie: Who is better positioned then? Is it the new AI-native startups rethinking things from scratch, and they don't have that technical debt? Or is the ability for what you described as this FinTech incumbent, is there a possibility to do both things? Or are they just at a disadvantage as far as where they're positioned, their relative inflexibility? Deepali: AI needs, obviously for Africa, and to be honest, I come to AI in Europe as well, and all the rest of the world, I think AI in Africa, Africa is struggling with other issues around having electricity. I think there are bigger problems also to be solved for. But I met, for example, the founder of Utiva. He is building, just so you know, to re-skill in Nigeria, AI for youth. So I think there's a talent, there's a data, there's a compute, there's an electricity issue that needs to be solved for. Not to say that you won't see AI-native businesses, but even if you look at FinTech AI, Jamie, in the rest of the world, there are many things to be thought through, including delegated authority and liability. What happens if a transaction is done, who is ultimately liable? We are not there yet. It'll come, probably first on the B2B side, with low-hanging fruit and routine transactions when it comes to AI enablement. Then of course the issues around data, and how it can be cleaned up and used. So on the FinTech side, you will see maybe more AI-enabled initially than you would see AI-native, is my view. But I also think FinTech is different from a regulatory perspective, and there are lots of things to take care of. Not to say that health is not different, but FinTech obviously has money involved, so obviously harder in many ways. Incumbent fintechs have distribution. AI-enabled startups, they still need distribution, and distribution is king. Rana: Fully, fully agree. Couldn't agree more. I think rather than asking ourselves, is this a winner-takes-all dynamic, but rather, what does the value chain pyramid look like, and where do each of these sit? It's more of a layering, and who will capture a larger portion of that value layer. Like Deepali said, the incumbents, they have the distribution, they have the regulatory moat, they have the proprietary data, and data is still an advantage. Where the AI natives come in is they're better underwriting, better cost efficiency, building infrastructure and making it a lot more seamless. I see a world where there's consolidation, I see a world where the incumbents will become more AI-native. But we are also looking at an investment strategy that could revolve around the picks and shovels, right? Not to sound too cliché, but we have to remember, are we investing in the mines or are we investing in the picks and shovels? There's a world where we can do both. From a portfolio construction standpoint, it would be healthy to do. --- HOW THE PORTFOLIO IS ADAPTING TO AI Jamie: Just in terms of I suppose existing portfolio, are you finding that your companies are adapting well to this new reality? Are they ready adopters of the tech and they're rethinking how they're building? Rana: 100%. We are looking at, many of our companies are obviously reconfiguring the engineering teams. That's where it starts. They're also looking at using the data for better underwriting, using partnerships for collections. They are more and more thinking about it and actually implementing it. Deepali: We have a logistics business also in Kenya. They're trying to figure out how to use AI for better data mapping that could sit on top of Google Maps. So lots of AI being used as much as they can in Africa. It's also not that easy. They might have to partner with other companies to do it on the internal side. --- HOW SPEEDINVEST USES AI INTERNALLY Jamie: Because this is something that a lot of firms are grappling with and very few talk about openly. How does Speedinvest actually use AI in its own operations? Like sourcing, due diligence, portfolio monitoring. I saw a really good piece from Union Square Ventures last week about these agents that they've developed for specific tasks. Are you guys doing anything similar? Harmonic for deal sourcing? Tell me all about it. Deepali: Honestly, for sourcing, just so you know, we had built an in-house scraper many years ago before there was any AI, that would look at something on LinkedIn and say, this founder has gone into stealth mode, or this operator has left Google. So we always had that. We are using AI more and more. You might have seen in the news as well, of course, internally, whether it's Claude or Granola or Perplexity. These are common tools that everybody's using, I don't think it's unique to us, but we are very much using them on a daily basis. Over time, to be honest, I think, to be able to use all the data that we have, and the institutional knowledge we have, years and years of data. If any AI can sit on top of it and tell us that, you know, you did this deal seven years ago in logistics in Brazil, and it didn't work out for A, B, C reason, and now you're looking at this deal in Germany, and this is my feedback. That is of course the holy grail. Deepali: I don't know if you came across, of course you know, Bodi. I think I tested Bodi, I think one of the first few people to actually test it, which is now grown quite rapidly. I'm at a company called Capsa maybe two weeks ago, based out of the UK, essentially building this for multi-asset managers, for BlackRock and bigger companies, Oakley or KKR, because they're multi-strategy funds. They have a lot of assets under management, they have a lot of data. Can something sit on top of that, actually sit in the IC with me and listen to all Rana and me talking, and Oliver talking, and be like, oh my God, I'm learning how these guys think. That is obviously the holy grail, but I think we will get to that faster than we think. I think it's coming very fast, so you have to be thinking about this already, and working on it already as a fund, which is what we tell our founders. Jamie: 100%. I spent the entire weekend trying to set up Claude Cowork as best I could. I took some sort of stab at it. I don't know whether I made myself more efficient or more inefficient, but at the very least, it's now set up in some sort of capacity. It was jarring to see how it thinks I best work. I had to do some soul searching after reading back, but anyway, introspection isn't supposed to be done, as Marc Andreessen would say, so I'll stop doing that. Deepali: We have partners internally, build tools with Claude that populate our Excel data and stuff. So we do have that. I remember the first time I learned about ChatGPT, from my son, maybe whenever it came out two, three years ago. He was like, do you know this thing? I was so excited about it. --- AI AND THE ECONOMICS OF RUNNING A VC FIRM Jamie: How does AI change the economics of running a VC firm then? Because obviously this week Speedinvest has announced as well that I think 10% of the workforce is being cut. Like we've seen in some places this happening in public markets as well, with the likes of Atlassian or Square. The contention maybe is that, AI is being used as cover for maybe over-hiring and exuberance during 22, 23. I'm not alleging that's the case here, but I'm just curious about how AI changes the game as far as that's concerned. Deepali: We are obviously slightly different, Jamie. We are an internal platform team and a fully regulated firm. So we have everything in-house, whether it's legal, whether it's finance, whether it's reporting, whether it's ESG. So you can see they're all data-heavy and repetitive tasks, which you can see you can get efficiencies in, right? Not every VC firm is like us. It depends on the size. You might meet two GPs who have outsourced all of it, and for them it's probably more relevant on the sourcing side. But my general thesis is that you will see a flatter structure in organisations going forward, because just naturally you will be doing a lot of that work yourself, because it's at the click of a button. These efficiencies will definitely come, and just like any other industry, in order to be more competitive, it's also going to come from the top, from the LPs. They'll be like, you need to make yourself a leaner, more efficient organisation, because management fees will ultimately get squeezed, because everybody will need to be more efficient. --- PRICING RISK IN EMERGING MARKETS Jamie: Obviously investing in emerging markets requires you to factor in a fundamentally different risk equation, currency events, geopolitics, unfortunately, as we're seeing right now with the Iran situation and regional instability. How do you price that into your deployment strategy? Is it business as usual, or are you actively adjusting? It's funny in many respects that there's a Brazilian irony in that Egypt, which historically has maybe been perceived as high risk with currency devaluation and inflation, right now, relative to what's happening elsewhere in the region, looks like a bastion of stability. Does it alter how you think about where you deploy at the moment? Rana: It doesn't alter how we think about where we want to deploy, because we believe in the markets that we invest in and the fundamentals around the markets that we invest in. But on your point on risk, I think a very interesting part of my professional journey was being an investor based out of Egypt, whether it was on the private equity side initially, and then on the venture capital side. Working in a country like Egypt, in an economy like Egypt, really taught me how to underwrite risk, and underwrite risk in the region. The way that we look at how we manage risk at Speedinvest is simply, we look at it at a fund level and not on a deal-by-deal basis. Because we understand deeply the markets that we look at, we understand how to structure around the risks, and how to price the risk more importantly. That fundamental belief and fundamental approach does not change on a market-by-market basis, but obviously the details and the nuances of each of those aspects do change when you're looking at different markets. Deepali: Just as a fund, we do the most basic things. If we are investing in a market where the currencies are more volatile than normal, you need to make sure that the companies are really growing very fast, because they need to compensate not just for normal growth, but they need to compensate for the fact that the currencies are being devalued. That growth rate needs to be reflective, and therefore also very much the multiple they will get. So the price becomes even more important. You need to be able to make sure you're being very disciplined about entry valuation. Many times we've turned down deals because we do not want to overpay, or we don't think it makes sense to overpay. If you look at Moove, Moove started in Nigeria, and to be honest, it expanded into other markets. It's our job as investors to help them actually reduce the dependence on a volatile currency, because there's no other way you're going to really hedge your risk. It's not like they're using hedging. The only way is to enable diversification of revenue, be disciplined about pricing, be disciplined about ownership. And also avoid markets, we don't have to do a cheque in that market. We can wait, because we are multi-stage. This goes back to your lost deal question. The benefit of being able to deploy multi-stage is you're not always worried that I'm going to lose this deal. Fine, I might have to pay a little bit more next time, or a little bit less, you don't know. --- LESSONS FROM EGYPT Jamie: Obviously that time when you were investing in the FinTech side of things in Egypt was maybe the most tumultuous time as far as many of these things we're discussing. What's your biggest lesson or takeaway from that time? I'd imagine there's many, give me as many as you want. Rana: Jamie, I've been an investor since 2006, and I'm sure that not only implies what age bracket I'm in, but also that I've been through multiple cycles. Whether in the region, whether Egypt only, or whether global. One thing that I've learned, or the most important thing that I've learned, is that cycles shift and cycles change, and we don't know when, or how, or what the trigger will be, but cycles do shift. As investors, we have to take a cautious approach, but we also have to double down when others are holding back. We can do that because we have a deep understanding of the markets, we have a deep understanding of the local economies that we're investing in and how to price around that. Rana: For Egypt specifically, if there's one piece of advice I can give to any investor, it's to always price in your devaluation across your entire investment period. Egypt has had multiple devaluations occur. We have what you call a step devaluation, where the currency is held for multiple years and then it's released. But if you extrapolate the devaluations that have happened from 2010 up to 2026, you'll find that on average, our currency devalues at 8 to 10% per annum. That isn't so bad if you're able to calculate that and factor that in. If you do the work and you price in the risks, it can be a very, very exciting investment country to have. Jamie: What you described there is that sort of long arc which you've borne witness to, you've obviously seen founders navigate and come through that. Is there any shared characteristics or traits of founders who do manage to emerge through those difficult periods relatively unscathed? Rana: Founders are at essence a little bit insane, right? Because these are people that are leaving their steady jobs, putting it all at risk. It's not something that me or you or Deepali have ever thought of doing, building something equally. It really takes this fire and this little bit of seeing the world in a different way to continue to push through. I think founders in Egypt have succeeded in spite of. Right, where we're seeing a lot of different countries in the region, founders can be successful because of the support that they found, or because of the capital availability, or because of flexible regulators. I think founders in Egypt have succeeded despite of, and that's a very, very important characteristic or differentiation to make. This really breeds strong and resilient founders that will continue to get up every single day and think about, how can I build differently, how can I build better, and how can I make my business survive one more day until I get to that point where I'm above water. --- THE TECH BRO RENAISSANCE AND WOMEN IN VC Jamie: One of the final things I want to touch on, we mentioned it before I started recording. It has been a pretty active discussion as far as, not necessarily in the MENA-specific ecosystem, but I think maybe in a broader European context recently. It stemmed from Freya Pratty at Sifted wrote a piece about essentially the tech bro renaissance in many respects, and I think all of us have maybe experienced this to a certain extent. I know you've been posting a small bit about it. I suppose if I had to summarise briefly, it's maybe this idea that the culture has swung back, and diversity commitments are being quietly shelved, and podcasts go on without interviewing a woman, that kind of thing. As two women who are managing a fund, raising capital, deploying in these markets, what's your honest read on where things stand? Has it gotten better, worse, or is it more complicated? Deepali: I love this question, Jamie, but I would probably need a few hours to talk about it, to be honest. Internally, we of course have these discussions. Taking a step back, I do think the tech bro renaissance is back. I can feel it in the market, I can hear it when I talk to many, many female GPs in Europe. I don't know what that is. I think some of it is obviously stemming from the US, and this whole reversal of the backlash against DEI that has happened. I feel like Europe has caught wind. I also think maybe some of it has to do with AI, and valuations moving the way they are. I can go on, to be honest, I cannot fundamentally point to one thing, but that is the feeling. Deepali: At Speedinvest obviously, we have always had a very strong commitment to gender. You might know or might not know, I was brought on to lead gender at the firm, and still very much a part of that discussion. It's not just optics, but for us, we pledged to invest 30% of what we invest into companies that had at least one female founder. I think we're at 25% now, which is hugely much higher than market standard in Europe. We will continue to do this in Africa. In the Middle East and Africa, we are a 2X fund. What I will say is that allyship is key at this time, and I think I'm very lucky to have this. A culture always starts at the top, and we run, and I have Oliver, who has set the tone for the organisation even through hard times. We've had Maria Helen, who was one of the first general partners of any venture capital fund in Europe. We have each other, we have Rana, and we have Andrea. Male or female allies, it's very important to have that within the firm, junior and senior. Things are shifting, I can't say that it's not, but we have to continue to support each other as women. Rana: Maybe just to end this on a bit of a positive note, whether it was myself and Deepali, or the lead investment team at QIA, the lead investment team at EIB, and the lead investment team at Mubadala, all female-led teams. That made the process extremely rigorous, there were, but it was also very helpful to have these female-led teams that continuously support each other and are intentionally making strides with female-led GPs. To that point, I would definitely shout out to Nora at EIB. She's been hugely supportive as our sponsor. Deepali: Jamie, you might remember, this is why we started the Micro GP programme to invest 50% into female and diverse GPs, which we will continue with. We invest via and you continue with the Africa fund, right? So really putting your money where your mouth is, is what we need to do. Also have women outside the office who can support us, whether it's, I'm very close to Ella Zing, I'm very close to Eileen Burbidge. These women, I reach out to them all the time for conversations when I'm not talking to Rana. Rana and I had a chat last night as well. So yeah, it's really being supportive to each other. Jamie: That's a breath of fresh air too, especially on the LP side of things. Can I ask, does that 30% commitment, does that change how you operate in terms of your sourcing and your evaluation criteria? I think sometimes you can, I think some firms maybe have this implicit bias which they don't even realise as far as sourcing and qualification is concerned. How do you actively combat that? Deepali: We have many female partners, right? So having women on the website also helps. What we did a few years ago was we also started an online form where women could just reach out to us directly, because as you know, women don't tend to have those networks. To be honest, not just me personally, but even Oliver, I know replies to every cold inbound. I'm not just saying this because oftentimes he sends it to us and he'd be like, can you please get back to this person, so it's not lost. So sourcing. Of course we run our accelerators, as you know, with SoftBank. We've done with ABL and we've done all of these things over the years, but we also want to make sure we get back to every person who actually reaches out to us, whether it's pointing them, giving them feedback as to why this isn't right, or pointing them in the right direction. At the end of the day, we want to invest in the best female founders and the best founder. I don't think that's one thing you are going to ever compromise on. That is just something I want to say, that we are actively looking for women, and because of the brands we've built, obviously women do reach out to us before they reach out to other funds. Jamie: Yeah. There's never an issue with men reaching out unsolicited, it's something we're unfortunately Exactly. Deepali: We're going to say that we'll get this done, and Rana and I are super excited. Despite the ups and downs, one thing I can say is that if there's a team that is raising a fund, there couldn't be a better team, and there couldn't be better LPs who are actually full force behind us, whether it's with introductions or whether it's with just making sure they're giving us that moral support through ups and downs. So very, very excited to get this done. Jamie: Well congratulations guys. It was a pleasure to have you on. Deepali: Cheers, guys. Thank you. Rana: Thank you. Thanks, Jamie. Take care.