Catalytic collaborations

When working in new markets or cross-culturally, building trust is vital for successful collaboration and overall success, including the way contracts are negotiated and drafted, says Peter Fry, director of Nairobi-based impact investor Kua Ventures.

“How you position your agreements is critical to set the tone of the type of relationship you want, and I think for any venture capital, private equity, development finance institution, etc, it’s a critical component,” emphasised Fry, who is speaking at a sector roundtable on 12 September, co-hosted by Ashitiva Advocates LLP, Pinsent Masons and the Nairobi International Financial Centre. “If you want to succeed as an investor, make sure you’re collaborating with entrepreneurs and founders. You’re not trying to be us versus them.”

Kua Ventures was established in 2020 to help support small and growing local businesses that are creating positive change in Kenya, by providing capital, coaching and community.

“Our parent organisation has been working around the world since 1985, and here in Kenya we’ve got 17 small businesses in our portfolio so far, with more to be added very soon,” Fry said. “We pinpoint growth-stage SMEs that have a good number of customers and decent traction but are lacking financing to get to the next level. Here in Kenya, there are a lot of businesses at that level, so we have a lot of high-quality businesses in our pipeline.”

Kua Ventures focuses on smaller investments for smaller businesses, across many sectors and with a large emphasis on “traditional businesses” such as agriculture and manufacturing, not just tech-enabled companies. Their portfolio includes early childhood book publisher Twiga Soma Africa, recycled fashion manufacturer Jeilo Leather Collections, and the Pathology Network.

“We’re trying to grow successful companies and provide quality jobs for hard-working men and women,” explained Fry, who has worked on several continents. “We’re not coming in writing million-dollar cheques. We’re trying to be more catalytic in where we choose to support and invest, to be able to help businesses get the traction they need to attract larger investments.”

Along with their “three Cs” (capital, coaching, community) model, talking with Fry it’s clear another C is also vital for Kua Ventures: collaboration. The quality of their relationships with portfolio companies, and advisors such as Ashitiva, is crucial.

“We try to help entrepreneurs get access to other founders and CEOs to counsel them in the growth of their business,” noted Fry, “as well as provide workshops where the likes of Ashitiva or PWC can come in, pooling small businesses together so they can get access to very high quality advisors to help their business navigate the ever-changing landscape.”

Fry says Ashitiva are extremely helpful as legal advisors, offering critical insights into nuances of the Kenyan market, and providing a bespoke service that understands Kua Ventures’ ethos of partnering with small businesses to help grow the overall pie. Self-protection and securing the best investment return is not the sole, or primary, concern.

“Ashitiva have been so good at helping us meet our needs, align with our values, and set the positive tone for every relationship we begin with businesses, while protecting us as well,” Fry highlighted.

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