Advance investment in Africa with Takano eyes on August 19, 17:20

The African continent is said to be the last frontier. In 30 years, the population is expected to grow to a huge market with nearly 2.5 billion people, and one in four people in the world will be African. It can be said that it is a treasure trove of business opportunities for Japan, but it cannot be denied that the advancement of Japanese companies is delayed compared to China.

Under these circumstances, there is a young man who was 29 years old and founded a consulting company that supports startup companies in Africa. This is President Kohei Muto (30). The place I chose was Rwanda. Twenty-five years ago, more than 800,000 people were killed in genocide, but more than 7% are expected to grow.

What is necessary to do business in Africa? We will look for hints from President Muto's words. (International Department reporter Nana Yamada)

Insight like Takano eyes

President Muto joined Morgan Stanley Securities after graduating from university. After that, while visiting Africa, which was interested as “the next market in Asia”, the desire to “solve social problems through business” became stronger.

In 2018, we will establish a consulting company based in Rwanda. The name of the company is “Double Feather Partners”. I took it from the design of the samurai family crest "Maru-no-Mana Takanoha". The two wings represent Japan and Africa growing together. “Takanome”, which is said to have sharp insights, has a desire to consult a start-up company in Africa overlooking a huge market.

-What is the social problem you want to solve in Africa?

(Mr. Muto)
The biggest thing is poverty. The problem of poverty is complicated by various phenomena such as agriculture, medical care, and logistics. I want to solve all that.

Rwanda has a GDP per capita of $ 700, about 70,000 yen, so it lives at a level of less than $ 2 a day. Japan's GDP per capita is approximately 4 million yen, so there is a difference of 60 to 70 times in terms of profitability.

I was surprised that Chinese stationery and dishes sold at 100 yen shops in Japan are sold for 300 to 500 yen in Rwanda.

It was a shock that the same goods were sold at a higher price than Japan even though there was a big wage gap in Japan and Rwanda.

Since infrastructure is not in place, it takes time to transport it from China to Kenya's port and then to Rwanda, a landlocked country. Because it is passed on to the price of, it is addicted to the negative cycle of poverty that nobody can buy.

Easy to borrow money with smartphone data

So how do you eliminate poverty through business? I was introduced to the case of a company that is currently engaged in consulting.

Rwanda startup company “YegoMoto”. This company operates a two-wheeled motorbike taxi that can be called the African version of Uber. Mr. Muto found a clue to solve poverty problems through business by managing smartphones, motorbikes, and money flow using smartphones.

Drivers who have been seeking jobs from rural areas are eager to earn daily living expenses. There was no savings and it was hard to get out of poverty. This time, the management of the business by the introduced smartphone will accumulate data on how many hours each driver works and how much money they earn.

Drivers can borrow money more easily by showing their earnings data to the bank. In the future, it is possible to increase income on the side of business, such as by owning a store while doing a motorcycle taxi, which is expected as an example for reducing poverty.

---- What are the difficulties you faced in consulting?

(Mr. Muto)
I had a hard time raising funds. The company has a self-funded and short-term bike taxi platform. Funds for future growth are necessary, but there were few companies or individuals in Rwanda who could give money even if they took risks.

I also consulted with local banks, but the banks did not lose their hard attitude that they could not lend unless cash flow was positive. I was able to get out of this dilemma by switching to work with European and Japanese operating companies instead of local banks and funds to find out if there was a place to invest.

We are currently negotiating with large Japanese companies for investment. In the case of business companies, investing in companies that are expected to grow locally will help to understand the market, and if there are synergies in the industry, it can also be used as a starting point for expanding into Africa in the future. If you understand the benefits, you will invest.

To build an African data bank

Mr. Muto feels that it is difficult for Japanese companies to do business in Africa as they are. Many Japanese companies specialize in selling automobiles and home appliances, but the business model of “going to sell goods when the market matures” cannot win over China, which sells cheaper items.

How can we reduce the growth of developing countries to Japan? Mr. Muto will invest in a local company at an early stage, such as an investment in the African version of Uber, so that when the company grows in the future, it will be possible to ensure a certain amount of profits. It is important to establish an upfront investment business model.

---- So what do Japanese companies need to make upfront investments in Africa?

(Mr. Muto)
People and information. The first is to develop the next leader who can do business in Africa.

The current management level of Japanese companies is that Asia is geographically close, has a skin feel, and is easy to take risks. Since you are a market that you have experienced when you are young, you can also command from the headquarters in Marunouchi.

Africa is different. Is it possible to make the necessary business decisions after understanding the growth potential of Africa when it is time for Africa to achieve economic development like China? At an early stage, I think we should send executive candidates to Africa and gain management experience in growth markets.

Information is also needed for decision making. If you don't have the information, you can't take risks to make a strategy. I think it would be better to make an upfront investment in collecting information.

Actually, we are trying to build a database of corporate information like the “Imperial Data Bank” in Japan. In other words, this is the African version of Imperial Data Bank. At the end of the year, we aim to create a database of 10,000 companies.

By analyzing the trends of private companies in Africa and accurately capturing and publishing risk factors and success factors that can be seen from the data, I hope that this will serve as a guideline for Japanese companies to invest in Africa in the future.

After the interview

From Mr. Muto's story, I felt strongly again that there was an era in which the common sense of business in Japan had not passed.

The Japanese government is trying to promote matching between African startups and Japanese companies in the TICAD = African Development Conference to be held in Yokohama from the end of August.

I would like to expect a database that Mr. Muto will start building in order to make an upfront investment in the huge market in Africa.

International Department reporter Nana Yamada

Joined in 2009
International department from this summer after Nagasaki station, Chiba station, economy department