Reflect Ventures 2023 Update

Welcome to the Sixteenth issue of Reflecting on Venturing, Reflect Ventures 2023 Update.

If you are interested in investing in emerging markets companies with small to medium ticket sizes and an accredited investor (usually net worth excluding primary residence of over USD 1MM or annual income for each of the last two years of over USD 200K) then please email [email protected].

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Read On Beehiiv: Reflect Ventures General Update

Reflect Ventures 2023 Update

Thanks

We would like to thank all of our investors who have trusted us over the last three years to find and vet promising early ventures in markets across the globe. Your investments have supported exceptional founders whose companies operate in dozens of countries on five continents. We believe the best is yet to come in emerging markets investing, and we appreciate your continuing interest and participation.

TLDR

Reflect Ventures Introduction

• Reflect Ventures has been investing in Supply Chain, Distribution, Logistics, Transport, Circular Economy, and Fintech Rails in emerging markets since 2021.
• Reflect Ventures believes that the increasing penetration of smartphones in emerging markets is creating an opportunity for new entrants to disrupt these enormous and fundamental industries.? We invest in the companies that are doing this.
• Reflect Ventures has been organizing syndicates for the past three years and is preparing to launch its first fund.

Management Team

• Michel Friedman (Managing Partner): 15 years in export management, cross-border M&A, CFO experience, 25 years in Emerging Markets.
• Dan Deac (Managing Partner): 20+ years startup experience, former Executive Director of Business Intelligence at The Washington Post Company.
• Jor Law (Managing Partner): Co-founder at IVC Fund, investment banking experience at major firms.
• Buddy Ye (Partner): Founder & Chairman of Shanghai WCTI Fund, 20+ years in SCM, eCommerce, tech founder, and investor in emerging markets.

Portfolio Snapshot

Reflect Ventures has 21 active investments in Latin America, Africa, the Middle East, South Asia, South East Asia, and the Caucasus. We made nine investments in 2023. See map below.?

2023 Has Been Tough for Venture Capital

• The number and size of venture capital investments has dropped globally and even more sharply in emerging markets. Many venture capital firms have exited the industry or paused operations.
• Reflect Ventures remained active, making several investments on three continents in 2023.
• We are being more conservative and only investing in ventures when there is a sufficient runway and solid economics, particularly a clear path to profitability.

Reflect Ventures Updates

• Reflect Ventures made nine investments in 2023. We invested in Africa, South East Asia, and the Caucasus.

• Our Managing Partner Michel Friedman moved to Dubai, UAE in mid-2023 to tap into the resources of one of the largest financial and business centers in the Middle East.

Plans for 2024

• We will continue to organize syndicates that will invest in parallel with the fund where allocation sizes and investment timelines allow it.

Contact Information:

For meetings with Michel Friedman, Dan Deac, or Jor Law please email Naima Awan, our Executive Admin, at [email protected].

Reflect Ventures Introduction

Reflect Ventures has been investing in Logistics, Supply Chain, Distribution, Circular Economy, Transport and Fintech Rails in emerging markets since 2021.? As smartphones penetrate these markets, there is a once in a generation opportunity to invest in the companies that are taking advantage of improved connectivity to disrupt large and economically fundamental industries. Reflect Ventures is seizing that opportunity.

Emerging markets are overlooked compared to developed markets, so deals are comparatively cheap. Our target industries are not in the middle of a hype cycle like NFTs or Metaverse were and as AI is now, so there are more opportunities to invest in good companies with solid business models at reasonable valuations.

Reflect Ventures has been organizing syndicates for the last three years. We are now launching our first fund. We will continue to organize deal by deal syndicates for our members to co-invest with the fund where allocation sizes and investment timelines allow it.

As always, we greatly appreciate any introductions to potential investors either for our syndicates or our fund.

Management Team

Portfolio Snapshot

Portfolio Highlights

• Chari (Morocco) secured a $1.5 million investment from Verod-Kepple Africa Ventures in July.? Verod-Kepple is a well-known African investor with strong connections in Japan, which should help Chari raise its Series B.
• Chari also launched phygital stores to better support retailers.

• 1Trolley (Egypt) has moved its main focus of operations to the UAE and Kingdom of Saudi Arabia and is now focused on white label delivery and loyalty solutions for large brands.
• Jatri (Bangladesh) has expanded into fintech and launched the Jatri Card, in partnership with DMoney.? Commuters in Dhaka can now pay for local bus transport by swiping a Jatri Card. Cashless transit payments are a major innovation in Bangladesh, and a major opportunity for Jatri. Read more in Transforming how Bangladeshis pay for public transportation

• Dastgyr (Pakistan) has launched a Logistics as a Service (LaaS) offering. This is a strategic move that keeps them at the forefront of Pakistan's logistics industry. The company has also ventured into new exciting verticals, expanding their focus from neighborhood store supply chain to now three more verticals in agriculture goods, construction materials and industrial chemicals

• Moova (Argentina) raised a $5 million venture round led by Toyota Tsusho Corporation.? This is a testament to their exceptional growth and the valuable solutions they bring to the Latin American market.
• Pollen (Singapore) has been selected to join ByteDance’s Lark for Startups program.? Read here Aabout Pollen’s sustainable B2B liquidation marketplace
• The Fifth Lagos Transport Fest was held in December and featured Reflect Ventures investees T40 (Nigeria), Gigmile (Ghana and Nigeria), and Renda (Nigeria).Appload received a grant from USAID’s Feed The Future Market Systems and Partnerships program to increase the efficiency of agricultural outputs logistics in Mozambique.

• Appload received a grant from USAID’s Feed The Future Market Systems and Partnerships program to increase the efficiency of agricultural outputs logistics in Mozambique.
• Foodpanda for Business partnered with Oware as a third party logistics provider (3PL) to enhance its distribution capability.?

2023 has been tough for Venture Capital

2023 has been tough for Venture Capital, especially in emerging markets.? Investment in emerging markets has dropped dramatically since 2022.? Investment in African startups was down 36% from 2022, investment in Latin American startups was down 60% from 2022 and a whopping 82% from 2021’s high water mark, and in Pakistan (where we invested heavily in 2022), investment was down 77% due to political instability and economic headwinds.

Funds raised by VC firms dropped 60% in 2023 from 2022.? For funds, this is a problem with impact in future years.? For syndicate organizers, it hits immediately.? Syndicate sizes drop and it becomes harder to complete investments.

As you might expect, with funding scarce many startups have had to shut down.

We continue to see and invest in amazing companies, but we were much more selective in 2023.? In 2022 we were sometimes pitched by fast growing companies that were raising extension rounds at higher valuations every three to six months and had only a three-month runway.? In 2023, those companies no longer exist.? They either raised enough money for a reasonable runway, found a way to become cash flow neutral, or died.? Last year and probably in 2024, cash and runway are king.? We are happy to extend a company’s runway from 11 months to 13, but not from 4 months to 6.

Reflect Ventures continued to invest, unlike many of our peers.? The number of active US VC investors dropped 38% from Q1-3 2022 to Q1-3 2023.? Most of the new investors who entered the hot market of 2021 are gone.

Reflect Ventures Updates

We Made Nine Investments in 2023

• Maad: Digitizing wholesale distribution in Senegal and Ivory Coast.?
• Pollen: Private B2B liquidation marketplace that reduces global business waste by connecting sellers of short life and obsolete inventory with global buyers.
• Renda: Order fulfillment solution for enterprise and medium-sized businesses in Nigeria.
• Appload: Online trucking marketplace based in Mozambique that connects shippers and carriers throughout the South African Development Community.
• Cargon : Online freight forwarder that orchestrates the flow of goods from Central Asia across the Caspian through Azerbaijan, Georgia, and Turkey to Europe or the Mediterranean..
• Tappi: End to end social commerce stack to help small businesses in Africa drive foot traffic, connect with new customers, and grow by building lasting relationships with their customers.
• Sendme: Farm and fishery to HoReCa company that uses social commerce and artificial intelligence to meet the animal protein demands of Nigerian households and businesses at excellent prices.
• GoCement: Indonesia's tech enabled construction material procurement platform for faster, smarter, and more convenient building material procurement.?
• Gigmile: Mobility FinTech platform that helps platform companies onboard gig workers and finances vehicles for gig workers in Ghana and Nigeria.

Assure Shut Down

In November of 2022, the day before the US Thanksgiving holiday weekend began, Assure, our SPV as a Service provider, announced that it was insolvent and would shut down before the end of the year. Assure was managing 22 of our SPVs.? With just 35 days left in the year, including Thanksgiving and Christmas, we had to rush to arrange a new administration and make sure we could deliver 2022 K-1s on time in 2023.

We transitioned to self-managing our SPVs.? We hired Junto Law as our law firm and Formidium as our fund administrator.? Amazingly, we got K-1s out on time and without hiccups.

We had paid Assure for 10 years of service in advance.? There was no chance of meaningful recovery from Assure and attempting to collect new management fees from our investors seemed unreasonable.? Therefore, Reflect Ventures has absorbed the cost of managing these entities going forward.??

Team Changes

Move to UAE

Our General Partner Michel Friedman, moved to Dubai in mid-2023.? Dubai is the financial and business center for the arc of countries from Indonesia in the east? through Central and South Asia to the Middle East and then south to the southern tip of Africa.? UAE has a heavy concentration of potential Limited Partners including high net worth individuals and family offices from the region. It is also a good jumping-off point to access the funds available in Saudi Arabia. If you are based in Dubai and would like to meet Michel in person over a cup of coffee, please email Naima at [email protected] to schedule a meeting.

New Hires

This year has also brought changes to our team. We welcomed two new members to our Marketing and Investment teams.?

Plans for 2024

More Investments

Reflect Ventures is continuing to organize syndicates investing in more of the same kinds of companies across emerging markets.

Regards,?

Team Reflect Ventures