Fellowship Spotlight: Seven Capital
As someone who has the experience of migrating from one continent to another — and the understanding and insights that come along with that experience — Ernest Kabuye, founder of Seven Capital, is clear about the importance as well as the challenges of identifying global solutions. This clarity informs his firm’s vision of investing in widespread impact across all seven continents. “We’re not here just for today,” says Kabuye. “We’re called Seven Capital because we envision after so many years of having spread to other continents, we’ll be truly encompassing what it means to be a global firm.”
A Focus on Emerging and Frontier Markets
Seven Capital is on a mission to close the gap in funding for early-stage companies with promising tech solutions that can revolutionize untapped markets. The firm’s thesis is grounded in the understanding that technology has made possible many of the ecosystems in emerging and frontier markets — particularly on the African continent — and it can also support the acceleration of these companies to operate at the same levels as mature market companies. “We’re identifying the technology-enabled businesses led by entrepreneurs targeting the issues within their regions,” says Kabuye. “We’re looking to then provide them with support to help them scale their solutions into mature markets.”
Seven Capital will be a multi-fund firm. As Kabuye explains, “We’re trying to build something that is long-lasting, something that will live on way beyond our time.” For their first fund, they’re looking to invest $15M in early-stage companies with founders from the emerging and frontier markets, with a focus on the African continent. $50k-$150k investments will be made in initial checks into pre-seed and seed stages, as well as some follow-on capital in Series A. The firm will also provide financial tools like debt financing to support the roughly 15 to 20 companies in their portfolio.
A Personal Connection to the Work
Originally from Kampala, Uganda, Kabuye became passionate about expanding global solutions soon after leaving home to begin his undergraduate studies at Northeastern University. “When I first came to the U.S.,” he reflects, “in order to communicate back home, you needed to buy these physical cards that had about five or ten dollars on them; load it onto your phone; and then you call, and you’re able to connect with people back home, despite the time difference.”
But it wasn’t a particularly efficient solution. “The moment I connect the card, three of the five dollars are already gone, then I have two dollars left,” Kabuye shares. He remembers sitting in his dorm room, confident that there had to be a better way to communicate across the ocean to his people back home. “Here I was, in two different worlds, trying to connect with the world I was previously in.”
WhatsApp launched just months later, innovating by using data and only requiring an internet connection to facilitate global communication. “That gave me the conviction I needed to get to work identifying solutions,” he says, adding that he continues to be motivated by that same conviction today. “I can help these founders grow their companies by letting them know that it’s good they’re solving a problem in their market, but asking if they recognize that it’s actually a global problem, and then help them scale to tackle it globally.”
Investing in Tech-Enabled Solutions with Real Growth Potential
While they consider themselves agnostic, Seven Capital is focusing most of their investing around six sectors in the technology space, intending to invest in a broad range of solutions that can be translatable when scaled into larger markets. The focal sectors include fintech, e-commerce, agritech, edutech, healthtech, and transportation/logistics. “We believe these pillars are prime for adoption and growth, having been forecasted to grow through 2050, especially in the emerging and frontier markets,” Kabuye says.
He points out that technology has lowered the barrier to entry to compete in mature markets, which also makes it easier to “sense check” the solutions Seven Capital is investing in. The firm is able to identify promising, scalable technologies coming out of emerging and frontier markets at a relatively low cost and then support their expansion into larger markets.
But it’s not just about identifying the businesses, says Kabuye. “We’re also making the assumption that those businesses will be tomorrow’s unicorns. By starting out in the emerging markets, building for low cost, they can be scaled up and deployed into mature markets.”
The Barrier-Bridging Power of Technology
Kabuye and his team are also focused on investing for impact. “The founders we’re investing in are able to use tech solutions to bridge the inequality that’s already prevalent in the societies they’re coming from,” he explains. He offers the example of someone with ambitions of selling their arts and crafts, and illuminates how tech-enabled solutions can mitigate many of the barriers associated with acquiring and managing a physical space. “Rather than having to set up a physical store, inventory, and warehousing,” Kabuye proposes, “they could rely on a technology-led business to have a virtual site where they can take in payments from all over the world; have a bank account that can accept multiple currencies; pay their fair share of taxes; and also be able to employ people within their local communities.”
The firm is looking specifically at five social impact pillars: inclusive workforce development; sustainable infrastructure investments; accessible education initiatives; microenterprise empowerment; and community health and well-being. By investing in solutions that address these pillars, Seven Capital’s impact reach will be broad and comprehensive.
Robust and Ongoing Support
“Something we try to get founders to understand when we engage with them is that we’re not the type of VC firm that would give you capital and then discard you. We’re available on day one, whether you need an intro or want us to come into your business and advise on things like go-to-market or focusing on a particular product.” After their initial investments and 12- to 36-month exit timeline, this support continues. “It’s not just the capital we provide,” he adds, “but also the network that comes with our firm—the partnerships we’re making with other VC firms and other institutions to help these entities grow. That way, there’s a pipeline for them to know they’re not just going to be incubated at this stage, but we have a timeline for growth.”
The Benefits of Cultural Context and Relevant Experience
“We’re fortunate enough that our team is made of people who have been born and raised in these emerging and frontier markets,” Kabuye shares. “We’re deeply intimate and familiar with the ecosystems in the overall region we’re working in.” Complementing their familiarity with the markets they’re working in is the exposure and experience the Seven Capital team has gained from stepping outside of their homeplaces for some time.
“Even though we were born and raised on the African continent,” Kabuye says, “we were able to get the opportunity to venture out to obtain an education, try to start one or two things, get ‘regular jobs’ in the developed and mature market industry to have an idea of what’s out there.” He explains that this dual experience has armed his team with the ability to share insights about how to close the gaps between the world they originated from and the markets they’re seeking to break into. “There are entities in the emerging and frontier markets that are looking for funding from the bigger VC and PE funds, but they have a gap between where they are and where they need to be. Our team can provide that direction. We’re able to navigate the world as it happens.”
In addition to the advantage of understanding their markets from the inside out, the Seven Capital team also has experience starting and operating companies themselves. “They’ve started entities in this market and gone through challenges to get to the next raise,” says Kabuye. “They have the perspective of having tried and they understand what the obstacles are.” After earning multiple degrees from universities in the U.S.—including a bachelors, masters, and PhD in mechanical engineering as well as an MBA—Kabuye himself returned to the Continent and worked on multiple social impact initiatives. “This makes our team the most effective at helping others navigate those waters. We consider ourselves a compass that never stops. Even in the dark or when it’s raining, we’re always pointing in the true direction.”
The Value-Add of Participating in the VC Include Fellowship
The VC Include Fellowship felt like an obvious choice for Kabuye. “I wanted a fellowship that understood the Seven Capital message and what it is we’re trying to do,” he says, “and that was willing to support us from day one.” The intentionality he saw going into our program is what drew him to apply.
Kabuye elevates a sense of validation that he’s experienced by participating in the VCI Fellowship. “It’s validating what my experiences have been and are going to be when interacting with LPs,” he shares, pointing to the positive impact of having alumni from past cohorts return to share insights with current cohort participants. “They walk you through what their process has been and you get the chance to meet with them 1-on-1 to get the validation that what you’re feeling and what you’ve experienced is not wrong. But this is what you can do about it to make it better; this is what I did to make it better.”
He lifts up the idea that you can’t be what you can’t see as a way to underscore the effect of having alumni to compare notes with. “Seeing the alumni, seeing what they’ve done and a representation of who I am in the alumni was the validation I needed to silence those small voices in my head telling me I can’t do this by looking at people who have literally been where you are and then gone on to do these great things.”
Kabuye also names the growth of his network as an asset that’s come out of being a part of our fellowship. “Through VC Include, I’ve been able to get access to GPs of other funds who might potentially become an LP,” he says. “I’m also looking forward to the future introductions that will come from this network, and to return a few years down the road to share my story as one of the first people in the fellowship working globally.”
We’re confident that a bright future is in store for Seven Capital, and we look forward to witnessing Ernest’s growth and hearing what insights he has to share along the way.
