TLcom’s Philippe Griffiths on dangers and returns in African VC

After spending his childhood throughout Zambia, Uganda, and Tunisia, Philippe Griffiths, now a senior affiliate at TLcom, an Africa-focused enterprise capital (VC) agency managing over $150 million, realised early that expertise may “remodel African lives.” Pushed by that conviction, he left a consultancy job in Washington and relocated to Nairobi, the place he provided scholarships to younger Kenyans trying to construct tech careers.

“It’s in regards to the position that tech can play to deal with basic market failures or gaps in authorities resourcing at a time the place there’s a dearth of capital throughout all our core wants,” he stated from South Africa, the place he’s on a deal-sourcing journey. 

For an hour, he spoke in regards to the human facet, constraints, and evolving maturity of Africa’s enterprise capital sector, and the way his consultancy job ready him for a profession in enterprise capital. 

“I labored in consulting as a result of I felt like there have been some enterprise fundamentals and publicity to world greatest practices on the largest firms and federal companies within the US that I used to be consulting with that I may apply to the forms of firms, not less than partly, that we need to construct in Africa,” he stated. 

That have ready him for what he thinks is the toughest a part of VC: serving to founders construct companies “match for objective” in Africa’s complicated markets. This could ideally occur after the primary cheque through the early levels of the enterprise, the place TLcom operates. 

At this stage, buyers are underwriting enterprise mannequin danger reasonably than technological innovation, in line with Griffiths, because the native realities of the market—restricted knowledge, poor infrastructure, and low spending energy—typically dictate that early-stage firms repurpose current tech creatively. 

Griffiths additionally emphasised that early-stage funding is basically about individuals. TLcom seems for founders who perceive their market, have proximity to the issue, and may adapt as their firm evolves.

This interview has been edited for size and readability.

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

It’s been good. I feel there are a few issues that we really feel very lucky about. One, the worldwide fundraising setting, I do know, hasn’t typically been nice globally—particularly in Africa. We have been fortunate to lift and shut our fund, I consider, firstly of final yr.

Now we have capital to deploy. We’re investing at a stage that has a whole lot of exercise at seed and Sequence A. Regardless of the down numbers throughout deal depend and quantity, seed and Sequence A have remained energetic, and we’ve been in a position to make funding selections with no sense of urgency.

We’re seeing, not less than on the high of the deal circulate pipeline, actually promising alternatives. We really feel lucky about that. We’ve now been investing throughout two funds and have been in a position to proceed studying about what works for us—what forms of enterprise fashions are engaging—and spending time in markets that we hadn’t beforehand targeted on. 

We made our first funding in Francophone West Africa, in Hub 2, an organization that does fee infrastructure. We have been in a position to get to know Francophone West Africa a bit extra by way of that course of. We’ve additionally made follow-on investments in a few our portfolio firms and have had the time and house to try this. Typically, I feel we’re feeling fairly optimistic and have had a superb yr.

Has something modified about your thesis previously 24 months?

Our thesis has at all times been about backing founders who’re fixing giant points and utilizing tech as a lever for scale. We concentrate on the primary ideas: are you constructing an organization with sturdy economics, serving a big or rising market?

We attempt to keep laser-focused on that and never be swayed by new traits or new subjects that come up. Finally, all alternatives boil right down to the basics. So no, I wouldn’t say that our thesis has modified.

You talked about earlier that you’re in South Africa for deal sourcing. I do know as an affiliate at TLcom, your position covers deal sourcing, due diligence, and even post-investment assist in some circumstances. Which of those areas do you discover essentially the most difficult right here on the continent, and why?

Enterprise capital basically is tough, and it’s exhausting in every single place. The success charges of firms in every single place are low. Founders are doing the exhausting work, so to not say that buyers are on the tougher facet of the enterprise, however as buyers, there are various kinds of dangers that you simply’re enterprise once you make investments, whether or not it’s market danger (is the demand there, is the market or buyer prepared and able to purchase the product?), tech danger (is that this one thing that’s on the forefront of expertise and innovation?), after which all kinds of enterprise mannequin dangers, whether or not it’s go-to-market or distribution. 

In Africa, what you’re underwriting at an early stage is the enterprise mannequin danger. As an investor, you see a whole lot of expertise that wouldn’t be labeled globally as cutting-edge being repurposed in inventive methods—both to satisfy the wants of a low-cost shopper or price-sensitive shopper or in any other case. 

However for me, the post-investing means of serving to generate worth within the portfolio that we’ve invested in is the place the problem lies. And particularly, it’s across the a part of constructing a enterprise that’s match for objective for Africa. The enterprise mannequin for me is central to that. What are the teachings which you can assist founders navigate by way of to guard margins, proceed to develop, and construct a wholesome enterprise in a market the place it’s not at all times fully clear how to try this?

The realities of shopper markets being constrained by low disposable earnings and fragmented markets—that means that you simply might need to consolidate your buyer base or run distribution your self, whereas in different markets you may be capable to outsource that—after which, after all, restricted entry to digital instruments signifies that you’re working at occasions with restricted knowledge in addition to you develop. These are only a few of the market realities that make constructing a enterprise troublesome, and, as an investor, supporting firms in that course of is difficult.

From the operational facet of working with ALX in Nairobi, what issues have you ever learnt that you simply’ve been in a position to apply at a few of your portfolio firms?

The elemental questions on what it seems wish to construct a enterprise in a market the place you don’t at all times have nice entry to shopper knowledge—what individuals need and must be constructed into your product growth cycle so that you simply’re getting speedy suggestions out of your early clients and tweaking your technique and product accordingly. These are fundamentals in every single place, however it’s even tougher in Africa, and, on this case, my expertise with ALX—to study the issue you’re fixing and construct an answer by way of desk analysis. You do really want to have an in depth and fixed touchpoint with the shopper.

At ALX, we have been constructing management bootcamps, six-month programmes focused in direction of younger adults trying to upskill particularly in tech. We have been doing that with college students who have been bold and hungry to be taught, however didn’t typically have the power to pay full value. We needed to subsidise charges to ensure that the programme is accessible for college kids whereas additionally assembly our fiduciary obligations as an organization. 

These are the forms of issues that we have been considering by way of. However in the end, it speaks to the reply to the earlier query, which is needing to get inventive on the enterprise mannequin to be sure to’re constructing one thing that works on your buyer.

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

You want readability on what dangers you’re underwriting. Are you investing in an area the place the market is small however rising, and also you’re taking a guess on the expansion of a future market? Is it on tech, enterprise mannequin, or crew? Ideally, you’re not taking over too a lot of these dangers on the similar time. There’s readability and promise in sure elements of the enterprise, if not all of them.

On the finish of the day, too, although, we’re investing in individuals. After we take into consideration an early-stage funding, the belief is that regardless of how promising the enterprise mannequin is, we’re anticipating it to evolve. Most profitable firms pivot a number of occasions from founding to exit. Can we discover the forms of founders which have demonstrated the expertise, proximity to the issue they’re fixing, and—importantly—a capability or willingness to work with a board to shore up management gaps or be taught alongside the best way? 

After which lastly, I feel it will be ensuring that we’re working with groups which have similar-scale ambitions as us. We need to work with individuals who wish to construct generational options on the scale that is smart to be backed by enterprise.

With regards to follow-on investments, we’re in search of firms that may articulate and execute a transparent aggressive benefit. Because the ecosystem has developed, we’ve seen founders get very, excellent at with the ability to articulate the dimensions and depth of the issue they’re tackling. However I feel as our ecosystem matures, it’s essential to additionally articulate: how does your technique give your organization a value or worth benefit out there?

That’s to say, are you organising your provide chain or enterprise in such a means that you simply’re structurally undercutting competitors in a means that provides you a value benefit? Are you offering a services or products at a perceived worth means larger than what else is accessible—a ten× enchancment available on the market? After which how will you flip that articulated benefit and place into money circulate?

These are the first questions we’re asking, actually, throughout rounds. That aggressive benefit, I feel, is the distinction between firms that see long-term success and concepts that fail to come back to fruition.

What are your expectations for founders when it comes to milestones post-investment?

I’d first begin by saying once you’re evaluating the funding, you’re efficiency and issues on one degree, after which once you make investments, it’s a partnership. As long-term companions to firms in our portfolio, the query is extra round: what can we do as a crew and as a board?

We have a tendency to sit down on the board of most firms we put money into, and so it’s much less of a “what can they do?” and extra of a “what can we do?” I don’t need to be too prescriptive as a result of it’s very totally different throughout levels, however typically talking, the questions we’re in search of at pre-seed are round this piece of an articulated aggressive benefit. Do you have got the crew or the networks, or the expertise to deal with an previous drawback in a brand new means?

That’s early-stage—or pre-seed—and in some circumstances seed as nicely. However I’d say we’re extra in search of: you had this promising concept and positioning that you simply’ve articulated—do you have got early proof factors to validate its success? Not at scale, however early clients displaying pleasure for the product, coming again, repeat clients, paying extra, and many others.

After which Sequence A and past—the Sequence A is type of the place we focus—it’s: you’ve finished a few of what I’ve simply described, and also you’re wanting basically to lift cash to gas development of your core merchandise and doubtlessly discover adjoining merchandise to diversify revenues. Nevertheless it’s not funding to pilot a brand new enterprise mannequin or reply new questions as a lot as it’s beginning to put development capital behind proof factors which have already been validated.

What sectors, in your opinion—and it’s your private opinion—do you assume are essentially the most compelling alternatives, and why do you assume that’s?

Should you simply take a look at the market over the past couple of years, even when you take the final H1 of 2025, the three sectors which have seen essentially the most exercise from a quantity or deal-count perspective have been fintech, local weather, and AI—broadly outlined.

As buyers, we’re backing concepts out there and founders. There’s a whole lot of exercise in these areas. There was an enormous wave of enormous offers, unicorns, and exits in fintech over the past decade—undoubtedly extra so than another sector—and it’s partly due to a few of the structural benefits of fintech that I don’t understand will go anyplace.

Fintech remains to be constructing the lacking rails in Africa—on which many different enterprise fashions are constructed—whether or not it’s funds, lending, wallets, or neobanking. The very nature of fintech means it turns into the monetisation engine for firms that may be doing issues in edtech, logistics, healthtech, and others, the place that’s their level of interplay with the shopper.

I feel fintech is right here to remain for some time and lends itself towards scale due to these causes. And two, it encompasses extra than simply, say, fee infrastructure or lending-as-a-service fashions, as a result of it’s what number of startups generate income—be it on transaction charges or in any other case.

AI is an attention-grabbing story for me. While you take a look at the position that AI is enjoying in world expertise, you’re beginning to see that trickle right down to different rising markets, whether or not Southeast Asia or Latin America. You’re seeing a ton of each shopper and enterprise AI options in these markets.

Whereas AI made up roughly one-fifth of deal quantity in H1 2025, I’d posit that we’re type of behind the curve in placing consideration and assets towards what position Africa can play within the AI story of tomorrow.

There’s no purpose why we will’t play a number one position in what’s a brand new house. My prediction is that within the subsequent 10 years, we’ll see much more founders constructing on this house. As buyers, I feel it’s our job to begin sifting by way of a few of the exercise and forming theses on the house. We’re at TLcom beginning to try this—however it’s a bit too early to share presently.

You use in a number of markets. How do you consider market dimension, regulatory danger, and the identical high quality throughout totally different nations?

It’s humorous. I’m certain a whole lot of buyers you interview type of say “it relies upon”, and I apologise prematurely. A whole lot of my solutions are “it relies upon”. However we don’t have a particular playbook that’s linked to markets. Now we have discovered, proper, from our time. We’ve spent a whole lot of time in Kenya and Nigeria over the past decade, and more and more in our second fund, we’ve spent extra time attending to know Egypt and have had ample experiences in South Africa as nicely.

I don’t have a TLcom-unique playbook to share exterior of the first-principles considering that I discussed that we strategy totally different markets with. We’ve undoubtedly adopted regulation and the way it’s developed in locations like Nigeria and Egypt, and we attempt to make not less than a few journeys a yr to every of the large 4 markets, in addition to others. We’re very optimistic about each the large 4 and different markets. However I wouldn’t say we now have a playbook that would supply a really wealthy reply to that query. 

The primary-principles considering for us is: we’re a $150 million fund. We’re in search of giant outcomes, and in doing so, we now have a bias in direction of giant markets. Whether or not that’s a rustic like Nigeria or Egypt or a area like West Africa, we’re asking ourselves a ton of questions on the dimensions of markets. Clearly, the regulator—the maturity of a regulatory setting—performs both kind of of a job within the alternative, relying on how regulated the house is.

However typically, we’re in search of scale, and we’ve been capable of finding that in very totally different locations throughout the continent. We’re additionally bearing in mind issues like exits—what can exits appear like?—and we’re precedent throughout what exits have appeared like previously. South Africa, for instance, has outcomes that are usually smaller however has a extremely liquid and native M&A market. 

TLcom emphasises long-term assist on your portfolio firms. Might you give an instance of the place you’ve helped a startup operationally—perhaps with market entry, hiring, or partnerships?

I don’t need to share any proprietary info on issues like market entry that may really feel delicate, however one core space for us the place we like so as to add speedy worth is fundraising.  I feel all buyers do that, however as an in depth associate, we do a whole lot of work on capital forecasting for the longer term.

It’s not sufficient to say, “You’ll want to increase this a lot for this spherical.” It’s: how can you articulate what the North Star seems like from an exit and scale perspective, after which sequence what the money wants appear like throughout two or three rounds?  We arrange conversations with each world and native buyers to begin serious about elevating Sequence A, Sequence B, and C+.

Finally, the query in Africa is about exits. It’s one factor to develop firms, however how do you crystallise returns for each the founders and buyers? One large initiative we’ve been taking over over the past 12 months helps firms set up the forms of relationships and readability of imaginative and prescient that get them to exit—whether or not that’s IPO, being bought by a strategic investor, or in any other case.

As a part of that, one factor you might need seen is that we work with the London Inventory Change to get our portfolio firms in entrance of them—to get a really clear sense of what the standards can be for an African firm to record. We’re attempting to make clear that path and bridge the hole by connecting the appropriate financiers to our portfolio firms to begin on that course of.

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

It’s not sufficient so that you can say, “We’re constructing the Instacart of Kenya.” No. What’s your particular benefit, and why is that related to your current market? Or it’s not sufficient to say, “We’re elevating a $10 million Sequence A as a result of EdTechs sometimes increase a $10 million Sequence A.” It’s extra: what’s the $10 million going towards, and the way does that contribute to the broader North Star?

There are implications in an setting the place there’s much less available capital for founders. There are implications for when and the way a founder goes again to market. Should you’re doing capital planning nicely and also you’re forecasting the wants throughout rounds, there’s lots that positively impacts your skill to take care of runway and forecast your wants.

You’re not elevating rounds in an pressing method at a time when money circulate points shock you—and everyone knows founders who’ve to lift a bridge as a result of issues have gone poorly. A few of this capital forecasting self-discipline helps stop these issues.