Sangu Delle Wants You to Invest in African Companies — and Get Rich
WHY YOU SHOULD CARE
Because that economic sweet spot could make you rich and spur growth.
When Sangu Delle was a kid, his family moved to a new neighborhood in Accra, Ghana’s capital. Their new haunts were still under development, and no shops or roadside stands had popped up yet. Workers toiled away in the heat, constructing new roads and buildings. Young Delle saw an opportunity. Before school he’d fill up plastic bags with water and pop them in the fridge. When he got home he’d take the chilled water outside and sell it — a childhood lemonade stand, Ghanaian style.
Delle’s inner hustler hasn’t gone away, and today he’s an investor who wants to change the way people think about economic growth in Africa. The 29-year-old heads up Accra-based Golden Palm Investments, a fund backing early-stage companies in sectors such as health, finance and agriculture. Its goal? Create world-class, competitive African companies to build local industry and labor forces. There’s an economic sweet spot in Africa, says the TED and Soros Fellow, one overlooked by those pinning hopes on microfinance or international trade as poverty solutions. Delle would know. The triple Harvard threat, armed with a B.A. and completing a joint J.D.–MBA, honed his skill at Goldman Sachs, Morgan Stanley and San Francisco–based venture firm Valiant Capital. Oh, and in his spare time, he runs CleanACWA, a nonprofit that provides clean water to 60,000 to 120,000 people in Ghana. A lot of people talk about socially conscious investing, but “there are very few people who can do it the way he does it,” says Lake Wang, a former colleague, classmate and fellow investor. “He’s the kind of guy who is not afraid of failing.”
Delle’s thinking goes like this: Why invest 200 bucks on 500 different banana sellers when you could invest $100,000 on one visionary banana seller who wants to create multiple banana products at scale? There’s an obsession with this idea that all poor people are entrepreneurs, says Delle. It’s like the 2016 version of the Happy African meme, which romanticizes poverty and paints Africans as monolithic beings with little variance in or capacity for complex emotions. In reality, he argues, not everyone is born with an enterprising spirit or the know-how to grow small pools of money into magnified success. “It has nothing to do with Africa. I wouldn’t give money to half my friends at Harvard,” he says. With microfinance, money can only go so far. That’s why he’s invested in companies like Andela, which aims to pump out 100,000 high-class African coders in a decade who can then, in theory, go on to start their own internationally competitive tech companies.
He takes the notion a step further too, advocating for investment over aid — he wants do-gooders to shift their mind-sets and their dollars from nonprofits to money-and-job-generating investments, whether that’s his fund or investing directly in African companies. It’s the same sell, he says, with a different destination. He has a point. Real per capita income today is lower than it was in the 1970s, despite $1 trillion in African development-related aid over the last 60 years, says Delle in his TED Talk above. It’s something international donors are loath to point out. Instead of reinventing the aid wheel, though, he wants to shift the cash to the private sector.
Despite Delle’s ingrained business savvy, he didn’t grow up in a household of wheelers and dealers. His father, a doctor and human rights activist, made the family home a refuge for Sierra Leonean and Liberian refugees fleeing conflict, once housing a famous journalist who was beaten and forced into hiding after he penned a critique of then-Liberian president and warlord Charles Taylor. His father hoped his son would grow up to be a doctor too and fight for the rights of the poor. Delle played the part of social activist: He wrote scathing critiques of the World Bank, calling out the “oil-military nexus” in Africa and working for the Government Accountability Project. At Harvard, he led a sit-in at the president’s office to protest low wages for campus workers. One day, back in Ghana, he asked some community members what sorts of poverty reduction programs they wanted. Their answer? “Jobs, please.” Delle made a quick pivot. That’s when, “intellectually and philosophically, there was that merge,” he says.
Today there are just a handful of African investors creating African investment firms to invest in African companies. They’re woven into an unofficial network across the continent’s large urban hubs like Lagos, Johannesburg, Nairobi and Accra, often even putting money into the same deals. It’s a small farm, in other words. And many still, understandably, shy away — the continent may offer big returns in the future, but it’s a long time frame to wait. “In Africa you have a lot of entrepreneurs with great ideas, but the infrastructure, culture and regulations are all very different and a lot of times ambiguous,” says Wang. That can create a huge trust and communication gap for American investors. It’s high-risk with often imperfect information; getting the data to make informed business decisions can be a herculean effort, says Delle. So investing in African startups means taking a hyper hands-on approach. It also means showing up — for meetings, calls and schmoozing over beers — and leveraging those personal networks.
But for those with moxie, an entrepreneurial spirit and a hefty dose of capital? They’re seeing dollar signs — and hope they’ll trickle down to everyone else.