Renowned Nigerian female polo player Neku Atawodi is the founder of Malaik, an equity crowdfunding platform.
Knowledge@Wharton: What is Malaik?
Neku Atawodi: Malaik is an equity crowdfunding platform that helps SMEs (small and medium enterprises) in Africa looking for finance. We like SMEs [because they] provide a lot of jobs for Africa; it helps our unemployment problem. And we connect to investors looking to invest in African businesses.
Knowledge@Wharton: This is an online crowdfunding platform? Tell us about where you are in this process — how many companies, how many investors? Is this ready for action?
Atawodi: We’re a few months old. We are open to the public. We are raising funds for three companies; we have completely funded two of them. We’re looking for success stories. We don’t want to just put people on the platform and then leave them there. We actually want to help them — put them in touch with people who want to make investments and want to make a difference.
Knowledge@Wharton: You said two of the companies are fully funded? What level is that?
Atawodi: I-Drop Water was looking for $300,000 to enter Nigeria. They are a South African company. It’s a really cool company and has solar-hub water dispensers that sell water at 10% of the bottled water price. [Access to affordable] bottled water is a huge problem in sub-Saharan Africa. So I’m really excited they are coming in.
Our second company is ReelFruit. (Affiong Williams, CEO and founder of ReelFruit) does processed foods. She dries fruits, she packages them and she sells them. I’m really proud of her because in the last “Forbes [Africa’s] 30 Under 30” she was the only woman and she was on the cover.
Knowledge@Wharton: Who are your current investors and who do you anticipate will be your investors? What’s the profile?
Atawodi: Malaik is very keen on building a strong network of high-net-worth individuals interested in investing in Africa. When we open it to the crowd, we’ll have smaller investors. But we want the high-net-worth [investors] to be the lead. If someone wants to invest in Africa and is coming from America, you want to have a big business person in Africa also backing that company. It’s for Africa by Africa, and then everyone else can come in and take a piece of the pie.
Knowledge@Wharton: When you open to the public, what will the minimum investment be?
Knowledge@Wharton: How did this company come about? You were a champion polo player, I believe? Then you said, “Enough with the horses?”
Atawodi: No. I still play polo. I’m building a polo club in Lagos where I’ve been pushing to have polo on television. We finally signed a partnership with SuperSport, the largest sports network in Africa. I own a charity; I don’t want to call it a charity. It’s an organization called Ride to Shine and we teach African orphans to ride and play polo.
“It’s for Africa by Africa, and then everyone else can come in and take a piece of the pie.”
Knowledge@Wharton: So that was the genesis of Malaik?
Atawodi: Yes. I was working with the ministry of sports to build a riding center. We don’t accept donations so we weren’t able to change our model. I was wondering, “How do I get people to chip in without telling them to donate?” And then we thought, “Why not just split it into equity and we tell all these people, it’s going to actually make money because we will charge the sponsors. If you put in this amount, you get this much equity. You have the potential to make money or just an impact.” People really responded to that.
Knowledge@Wharton: You are a serial entrepreneur. What are some of the lessons that you’ve learned from starting other businesses that you’re bringing to this new venture?
Atawodi: One of the biggest lessons I learned was that the first bits of money you get is from friends and family. Friends and family will support you if you have a clear business plan. My initial angel was [my] daddy and I’ve met a lot of people that don’t have that. To be honest, he asked me for a business plan. But [later], I didn’t have to hit my parents for more money. I got investors to do that and showed them how much money they’d be able to make. So that’s what I’ve learned: There’s other ways to finance beyond daddy and mommy.
“We’re making it safer to invest in Africa.”
Knowledge@Wharton: As you envision growing Malaik, one of the challenges will be making sure that the companies coming to you are investment ready and at a stage where they can take a meaningful investment. If the typical amount you’re giving is $250,000, that could be completely overwhelming for an early-stage entrepreneur. What’s the process that you will use to vet to these companies?
Atawodi: We’ve got a very cool four-step due diligence process. I see a lot of companies in this space do a two-step but, it being Africa, we added two extra steps. We have a business analyst. We’ve got an in-house financial analyst. Then we send the proposal to our partners who are required to do an in-house due diligence. Then we make the entrepreneur the offer. But it lists on a platform; PwC does an audit. It could get to a stage that you make that offer and then PwC finds something out. Not many people investing little chunks like $1,000-$2,000 have the resources to get a four-step due diligence process or even one of the big four do an audit for you. We’re making it safer to invest in Africa.
Knowledge@Wharton: What has been the response that you’re getting as you’re starting to spread the word?
Atawodi: It’s crazy. The response has been overwhelming. It makes it completely worth it when you see how much people respond to something that just popped into your head.
Knowledge@Wharton: Where do you expect to be in a year?
Atawodi: We are aiming to be in all countries in Africa. We want to enter the Middle East. We want to enter America. My business plan is completely changing but I hope that Malaik will continue to grow to be a global investment platform.
The word Malaik is very cool. How do you say angel in Arabic? It’s mal’ak. How do you say angel in my language Hausa? It’s mala’ikan. How do you say angel in Swahili? It’s malaika. The name connects Africa and the fact that we’ve been able to enter so many countries with that name is really cool. Our logo is a seed growing — a new plant and then an angel.