TLcom’s Philippe Griffiths On Risks And Returns In African VC

After spending his childhood all through Zambia, Uganda, and Tunisia, Philippe Griffiths, now a senior affiliate at TLcom, an Africa-focused enterprise capital (VC) company managing over $150 million, realised early that experience could “transform African lives.” Pushed by that conviction, he left a consultancy job in Washington and relocated to Nairobi, the place he supplied scholarships to youthful Kenyans making an attempt to assemble tech careers.

“It’s regarding the place that tech can play to take care of fundamental market failures or gaps in authorities resourcing at a time the place there’s a dearth of capital all through all our core needs,” he acknowledged from South Africa, the place he’s on a deal-sourcing journey. 

For an hour, he spoke regarding the human side, constraints, and evolving maturity of Africa’s enterprise capital sector, and the best way his consultancy job prepared him for a occupation in enterprise capital. 

“I labored in consulting on account of I felt like there have been some enterprise fundamentals and publicity to world best practices on the most important companies and federal firms throughout the US that I was consulting with that I could apply to the types of companies, not lower than partly, that we have to assemble in Africa,” he acknowledged. 

Which have prepared him for what he thinks is the hardest part of VC: serving to founders assemble firms “match for goal” in Africa’s difficult markets. This might ideally happen after the first cheque via the early ranges of the enterprise, the place TLcom operates. 

At this stage, consumers are underwriting enterprise model hazard moderately than technological innovation, according to Griffiths, as a result of the native realities of the market—restricted data, poor infrastructure, and low spending power—sometimes dictate that early-stage companies repurpose present tech creatively. 

Griffiths moreover emphasised that early-stage funding is principally about people. TLcom appears for founders who understand their market, have proximity to the problem, and will adapt as their agency evolves.

This interview has been edited for measurement and readability.

How has the earlier yr—from October 2024 to now—been for TLcom, your company?

It’s been good. I really feel there are a number of points that we actually really feel very fortunate about. One, the worldwide fundraising setting, I do know, hasn’t sometimes been good globally—significantly in Africa. We now have been lucky to raise and shut our fund, I think about, firstly of ultimate yr.

Now we’ve got capital to deploy. We’re investing at a stage that has a complete lot of train at seed and Sequence A. Whatever the down numbers all through deal rely and amount, seed and Sequence A have remained energetic, and we’ve been able to make funding alternatives with no sense of urgency.

We’re seeing, not lower than on the excessive of the deal flow into pipeline, truly promising alternate options. We actually really feel fortunate about that. We’ve now been investing all through two funds and have been able to proceed learning about what works for us—what types of enterprise fashions are partaking—and spending time in markets that we hadn’t beforehand focused on. 

We made our first funding in Francophone West Africa, in Hub 2, a company that does payment infrastructure. We now have been able to get to know Francophone West Africa a bit further by the use of that course of. We’ve moreover made follow-on investments in a number of our portfolio companies and have had the time and home to do this. Usually, I really feel we’re feeling pretty optimistic and have had an excellent yr.

Has one thing modified about your thesis beforehand 24 months?

Our thesis has always been about backing founders who’re fixing large factors and using tech as a lever for scale. We focus on the first concepts: are you establishing a company with sturdy economics, serving an enormous or rising market?

We try to hold laser-focused on that and by no means be swayed by new traits or new topics that come up. Lastly, all alternate options boil proper right down to the fundamentals. So no, I wouldn’t say that our thesis has modified.

You talked about earlier that you just’re in South Africa for deal sourcing. I do know as an affiliate at TLcom, your place covers deal sourcing, due diligence, and even post-investment help in some circumstances. Which of these areas do you uncover primarily essentially the most tough proper right here on the continent, and why?

Enterprise capital principally is hard, and it’s exhausting all over the place. The success prices of companies all over the place are low. Founders are doing the exhausting work, so to not say that consumers are on the harder side of the enterprise, nonetheless as consumers, there are numerous sorts of risks that you just’re enterprise when you make investments, whether or not or not it’s market hazard (is the demand there, is the market or purchaser ready and capable of buy the product?), tech hazard (is that this one factor that’s on the forefront of experience and innovation?), after which every kind of enterprise model risks, whether or not or not it’s go-to-market or distribution. 

In Africa, what you’re underwriting at an early stage is the enterprise model hazard. As an investor, you see a complete lot of experience that wouldn’t be labeled globally as cutting-edge being repurposed in ingenious strategies—each to fulfill the needs of a low-cost shopper or price-sensitive shopper or in some other case. 

Nonetheless for me, the post-investing technique of serving to generate price throughout the portfolio that we’ve invested in is the place the issue lies. And significantly, it’s throughout the part of establishing a enterprise that’s match for goal for Africa. The enterprise model for me is central to that. What are the teachings which you’ll help founders navigate by the use of to protect margins, proceed to develop, and assemble a healthful enterprise in a market the place it’s not always absolutely clear how to do this?

The realities of purchaser markets being constrained by low disposable earnings and fragmented markets—which means that you just would possibly must consolidate your purchaser base or run distribution your self, whereas in numerous markets you could be succesful to outsource that—after which, in spite of everything, restricted entry to digital devices signifies that you just’re working at events with restricted data along with you develop. These are only some of the market realities that make establishing a enterprise troublesome, and, as an investor, supporting companies in that course of is tough.

From the operational side of working with ALX in Nairobi, what points have you ever ever learnt that you just’ve been able to use at a number of of your portfolio companies?

The fundamental questions on what it appears want to assemble a enterprise in a market the place you don’t always have good entry to shopper data—what people want and have to be constructed into your product development cycle so that you just’re getting speedy options out of your early purchasers and tweaking your approach and product accordingly. These are fundamentals all over the place, nonetheless it’s even harder in Africa, and, on this case, my experience with ALX—to check the problem you’re fixing and assemble a solution by the use of desk evaluation. You do actually wish to have an in depth and stuck touchpoint with the patron.

At ALX, we’ve got been establishing administration bootcamps, six-month programmes centered in course of youthful adults making an attempt to upskill significantly in tech. We now have been doing that with faculty college students who’ve been daring and hungry to be taught, nonetheless didn’t sometimes have the facility to pay full worth. We wanted to subsidise prices to make sure that the programme is accessible for school youngsters whereas moreover meeting our fiduciary obligations as a company. 

These are the types of points that we’ve got been contemplating by the use of. Nonetheless in the long run, it speaks to the reply to the sooner question, which is needing to get ingenious on the enterprise model to make sure to’re establishing one factor that works in your purchaser.

How do you steadiness investing in high-risk startups with the need for follow-on capital?

You need readability on what risks you’re underwriting. Are you investing in an space the place the market is small nonetheless rising, and in addition you’re taking a guess on the growth of a future market? Is it on tech, enterprise model, or crew? Ideally, you’re not taking up too lots of these risks on the same time. There’s readability and promise in certain parts of the enterprise, if not all of them.

On the end of the day, too, though, we’re investing in people. After we take into accounts an early-stage funding, the idea is that no matter how promising the enterprise model is, we’re anticipating it to evolve. Most worthwhile companies pivot a variety of events from founding to exit. Can we uncover the types of founders which have demonstrated the experience, proximity to the problem they’re fixing, and—importantly—a functionality or willingness to work with a board to shore up administration gaps or be taught alongside one of the best ways? 

After which lastly, I really feel will probably be guaranteeing that we’re working with teams which have similar-scale ambitions as us. We have to work with people who want to assemble generational choices on the size that’s sensible to be backed by enterprise.

With reference to follow-on investments, we’re seeking companies which will articulate and execute a clear aggressive profit. As a result of the ecosystem has developed, we’ve seen founders get very, glorious at with the power to articulate the size and depth of the problem they’re tackling. Nonetheless I really feel as our ecosystem matures, it’s important to moreover articulate: how does your approach give your group a price or price profit on the market?

That’s to say, are you organising your present chain or enterprise in such a way that you just’re structurally undercutting opponents in a implies that supplies you a price profit? Are you providing a companies or merchandise at a perceived price means bigger than what else is accessible—a ten× enchancment out there in the marketplace? After which how will you flip that articulated profit and place into cash flow into?

These are the primary questions we’re asking, truly, all through rounds. That aggressive profit, I really feel, is the excellence between companies that see long-term success and ideas that fail to come back again to fruition.

What are your expectations for founders in relation to milestones post-investment?

I’d first start by saying when you’re evaluating the funding, you’re effectivity and points on one diploma, after which when you make investments, it’s a partnership. As long-term companions to companies in our portfolio, the question is further spherical: what can we do as a crew and as a board?

We generally tend to sit down down on the board of most companies we put cash into, and so it’s a lot much less of a “what can they do?” and additional of a “what can we do?” I don’t should be too prescriptive on account of it’s very completely totally different all through ranges, nonetheless sometimes speaking, the questions we’re seeking at pre-seed are spherical this piece of an articulated aggressive profit. Do you’ve got the crew or the networks, or the experience to take care of an earlier downside in a model new means?

That’s early-stage—or pre-seed—and in some circumstances seed as properly. Nonetheless I’d say we’re further seeking: you had this promising idea and positioning that you just’ve articulated—do you’ve got early proof components to validate its success? Not at scale, nonetheless early purchasers displaying pleasure for the product, coming once more, repeat purchasers, paying further, and lots of others.

After which Sequence A and previous—the Sequence A is kind of the place we focus—it’s: you’ve completed a number of of what I’ve merely described, and in addition you’re wanting principally to raise money to gasoline growth of your core merchandise and doubtlessly uncover adjoining merchandise to diversify revenues. Nonetheless it’s not funding to pilot a model new enterprise model or reply new questions as quite a bit because it’s starting to place growth capital behind proof components which have already been validated.

What sectors, in your opinion—and it’s your personal opinion—do you assume are primarily essentially the most compelling alternate options, and why do you assume that’s?

Must you merely check out the market over the previous couple of years, even if you take the ultimate H1 of 2025, the three sectors which have seen primarily essentially the most train from a amount or deal-count perspective have been fintech, native climate, and AI—broadly outlined.

As consumers, we’re backing ideas on the market and founders. There’s a complete lot of train in these areas. There was an infinite wave of huge provides, unicorns, and exits in fintech over the previous decade—undoubtedly further so than one other sector—and it’s partly due to a couple of the structural advantages of fintech that I don’t perceive will go anyplace.

Fintech stays to be establishing the missing rails in Africa—on which many various enterprise fashions are constructed—whether or not or not it’s funds, lending, wallets, or neobanking. The very nature of fintech means it turns into the monetisation engine for companies that could be doing points in edtech, logistics, healthtech, and others, the place that’s their degree of interaction with the patron.

I really feel fintech is true right here to stay for a while and lends itself in the direction of scale as a consequence of these causes. And two, it encompasses further than merely, say, payment infrastructure or lending-as-a-service fashions, on account of it’s what variety of startups generate earnings—be it on transaction prices or in some other case.

AI is an attention-grabbing story for me. When you check out the place that AI is having fun with in world experience, you’re starting to see that trickle proper right down to totally different rising markets, whether or not or not Southeast Asia or Latin America. You’re seeing a ton of every shopper and enterprise AI choices in these markets.

Whereas AI made up roughly one-fifth of deal amount in H1 2025, I’d posit that we’re kind of behind the curve in inserting consideration and belongings in the direction of what place Africa can play throughout the AI story of tomorrow.

There’s no function why we’ll’t play a primary place in what’s a model new home. My prediction is that throughout the subsequent 10 years, we’ll see far more founders establishing on this home. As consumers, I really feel it’s our job to start sifting by manner of some of the train and forming theses on the home. We’re at TLcom starting to do this—nonetheless it’s a bit too early to share presently.

You utilize in a variety of markets. How do you think about market dimension, regulatory hazard, and the equivalent prime quality all through completely totally different nations?

It’s humorous. I’m sure a complete lot of consumers you interview kind of say “it depends upon”, and I apologise prematurely. A complete lot of my options are “it depends upon”. Nonetheless we don’t have a selected playbook that’s linked to markets. Now we’ve got found, correct, from our time. We’ve spent a complete lot of time in Kenya and Nigeria over the previous decade, and increasingly in our second fund, we’ve spent further time attending to know Egypt and have had ample experiences in South Africa as properly.

I don’t have a TLcom-unique playbook to share exterior of the first-principles contemplating that I mentioned that we technique completely totally different markets with. We’ve undoubtedly adopted regulation and the best way it’s developed in places like Nigeria and Egypt, and we try to make not lower than a number of journeys a yr to each of the massive 4 markets, along with others. We’re very optimistic about every the massive 4 and totally different markets. Nonetheless I wouldn’t say we now have a playbook that will provide a very rich reply to that question. 

The first-principles contemplating for us is: we’re a $150 million fund. We’re seeking large outcomes, and in doing so, we now have a bias in course of large markets. Whether or not or not that’s a country like Nigeria or Egypt or a space like West Africa, we’re asking ourselves a ton of questions on the size of markets. Clearly, the regulator—the maturity of a regulatory setting—performs each type of of a job throughout the various, counting on how regulated the home is.

Nonetheless sometimes, we’re seeking scale, and we’ve been able to find that in very completely totally different places all through the continent. We’re moreover taking into account points like exits—what can exits appear as if?—and we’re precedent all through what exits have appeared like beforehand. South Africa, as an example, has outcomes which are often smaller nonetheless has a extraordinarily liquid and native M&A market. 

TLcom emphasises long-term help in your portfolio companies. Would possibly you give an occasion of the place you’ve helped a startup operationally—maybe with market entry, hiring, or partnerships?

I don’t must share any proprietary data on points like market entry which will actually really feel delicate, nonetheless one core area for us the place we like in order so as to add speedy price is fundraising.  I really feel all consumers try this, nonetheless as an in depth affiliate, we do a complete lot of labor on capital forecasting for the long term.

It’s not ample to say, “You’ll wish to enhance this quite a bit for this spherical.” It’s: how will you articulate what the North Star looks like from an exit and scale perspective, after which sequence what the cash needs appear as if all through two or three rounds?  We organize conversations with every world and native consumers to start severe about elevating Sequence A, Sequence B, and C+.

Lastly, the question in Africa is about exits. It’s one issue to develop companies, nonetheless how do you crystallise returns for every the founders and consumers? One massive initiative we’ve been taking up over the previous 12 months helps companies arrange the types of relationships and readability of imaginative and prescient that get them to exit—whether or not or not that’s IPO, being purchased by a strategic investor, or in some other case.

As part of that, one issue you would possibly want seen is that we work with the London Stock Change to get our portfolio companies in entrance of them—to get a very clear sense of what the requirements may be for an African agency to document. We’re making an attempt to clarify that path and bridge the opening by connecting the suitable financiers to our portfolio companies to start on that course of.

What are a number of of the belongings you’ve seen amongst founders you assume are like pink flags, and the best way do you’re employed with them to take care of these?

It’s not ample to be able to say, “We’re establishing the Instacart of Kenya.” No. What’s your specific profit, and why is that associated to your present market? Or it’s not ample to say, “We’re elevating a $10 million Sequence A on account of EdTechs generally enhance a $10 million Sequence A.” It’s further: what’s the $10 million going in the direction of, and the best way does that contribute to the broader North Star?

There are implications in an setting the place there’s a lot much less out there capital for founders. There are implications for when and the best way a founder goes once more to market. Must you’re doing capital planning properly and in addition you’re forecasting the needs all through rounds, there’s heaps that positively impacts your talent to deal with runway and forecast your needs.

You’re not elevating rounds in an urgent methodology at a time when cash flow into factors shock you—and everybody is aware of founders who’ve to raise a bridge on account of points have gone poorly. Just a few of this capital forecasting self-discipline helps cease these points.