Seven years ago Kenyan Heshan de Silva’s parents
gave him KSh. 10,000 (US$116) which he used as
capital to start his first business.
De Silva, who was 18 at the time, started a company
which bundled insurance cover with long distance
bus tickets. By the end of the year, the business had
made KSh. 90m (US$1.05m).
He then embarked on his next venture, that of
investing in innovative ideas. Today De Silva runs
VenCap Kenya, a venture capital firm that is invested
in 22,000 people and has created 17,000 businesses
across the world. The fund is part of The De Silva
Group.
VenCap Kenya invests an average of $10,000-$15,000
into innovative ideas and offers its investees support
in executing the ideas. So far, the businesses created
by VenCap and its investees employ about 70,000
people.
De Silva told How we made it in Africa that creating
jobs and reducing poverty is a major goal for the
group.
“When we started this we didn’t want to be the
Abraajs of this continent that do five deals a year
and they are happy. We wanted to impact people on
a large scale. The mandate of our group is to reduce
poverty from 60% to 40% in this country within five
years. We can’t do that with five deals a year.”
According to the 25-year-old entrepreneur, VenCap
has had a 70% success rate, with three of its
companies crossing the $10m valuation mark. One of
its businesses is an advertising company that offers
GPS-enabled advertising on public transport vehicles
for KSh. 150 ($1.74) and whose model has been
patented in dozens of countries worldwide.
Another successful business is The Gourmet Nomads,
which distributes more than 1,000 lunches to
businesses in Nairobi every day for KSh. 150 ($1.74)
per meal. Offering affordable services, be it in
advertising or packed lunches, De Silva says, is
important because it appeals to a wider range of
customers.
“I never take a majority stake in a business… usually
around 25%-35% and that’s it. Even if we are
financing an idea completely, we will never cross 40%
ownership,” he says, adding that “trust is everything
in our line of work”.
VenCap has invested in various sectors including
agribusiness , robotics, advertising, hospitality,
fashion, rural road construction and hardware.
“The really nice thing about it is that we are not
looking for the next big thing. We are not looking for
huge businesses. We are targeting the poorest
people in this country. These are people who make
$2 or less a day. They are not having massive dreams
of owning [a five star hotel]. So if it’s just a need in
your street, or neighbourhood… and you create a
business that can employ three or four people and
make money at the end of the month, that is gold for
us.”
A growing portfolio
De Silva enjoys being involved in a wide range of
sectors. “Because of my ADD (attention deficit
disorder), it is so handy that I am invested in so
many things. I can be talking about the robotics we
are invested in and switch to a green house then to
a road that we are building. How can you ever get
tired when you have got a clothing line in Miami and
another in Kenya? It’s a lot of fun. I love what I do.”
However, he says managing the thousands of
businesses is difficult, comparing the group’s
portfolio to a zoo. Yet more entrepreneurs are keen
on joining.
“The number of requests that we get every day is
phenomenal. Our company email is shredded.
Managing all that and sticking to our principles is
important,” says De Silva, adding that he relies on
his team of 400 who listen to pitches and ensure
that ideas presented to the company are executed.
De Silva says his group takes lesson from the success
of Toyota which employs 1m people in Japan. VenCap
has planned for 50,000 businesses a year and has
access to up to $2bn over the next five years. The
firm works in partnership with two New York-based
funds.
“There are 11m people here unemployed who are
sitting somewhere wondering what they are going to
do. Imagine if you can impact a fraction of those
people, how fast would this country grow across many
sectors?”
Instant success
The VenCap boss is motivated by the “drastic”
change in the lives of his entrepreneurs who just a
few months ago struggled to put food on their tables
but today can afford to dine at high-end restaurants,
educate their children and create jobs for other
people.
However, this instant success can have negative
effects.
“Some of the people went into drugs when they
started making money. That was something I never
wanted to create. I don’t want to make you rich so
you can go and waste your life. I want to make sure
that people are responsible,” says De Silva, adding
that the fund works closely with its entrepreneurs to
avoid such cases.
De Silva knows about spending money
irresponsibility, having experienced the same at the
age of 23.
“When I started making a decent amount of money…
I bought a house in Lavington (upmarket suburb in
Nairobi) for KSh. 170m ($1.9m). Then I bought a
house in Palm Beach Florida, and then in South
Africa and in Sri Lanka. Then it became planes. It
was ridiculous. There was no limit to how much I just
wanted to throw at stuff. It was very irresponsible. It
went full circle and I decided to live a simple life. I
don’t need anything fancy. I believe very much in
stewardship.”
University drop-out
Before his spending spree, De Silva faced even bigger
challenges. He dropped out of an American
university after a short stint, started abusing drugs
and attempted to kill himself. He eventually
managed to turn his life around and stopped using
substances.
De Silva enjoys encouraging other youth and
motivating them to aim for the stars regardless of
their past. He hopes to change the perception that
one must have a university degree to succeed in life.
“If you don’t have a degree, if you don’t have even a
high school diploma, you will succeed if you plug a
need. You don’t require a piece of paper to be
certified to do business,” he says.
“I think education enables you to open your mind to
a lot of possibilities but at the end of the day you
are very narrowed to what you have studied and you
lock out everything that is going on around you. The
counter to that is that people like me are not
narrowed to anything; we see opportunity
everywhere.”
He advises the youth not to wait “for a golden ticket”
to venture into business.
“Don’t scratch your head saying there is no
financing. With what you have, what can you do to
achieve your goal? Investors like people who have
taken that initiative.”
Passion, he adds, is a must have.
“You really have to love what you do. If I care more
about your business than you do there is a
problem.”
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