Most startup investors chase mythical unicorns, ignoring the real, fast-growing elephants. What do I mean by fast-growing? 50%-100% year over year, with an occasional 3x or 5x or 9x growth spurt to kick that off:
Above are four such companies, all fledglings, all now part of Africa Eats‘ portfolio. Four companies that earn over $1 million per year, which solve real problems, and with that are growing rather quickly, but which don’t fit the typical venture capital thesis and thus will never be unicorns.
Above are four more from Africa Eats, each a year or two away from breaking past that $1 million-in-a-year milestone that separates small companies from small-but-soon-medium-sized companies.
Personally, enjoy seeing growth like this based on real customers paying real money for real products. Especially given that all these companies were profitable prior to the pandemic, and most have made it through so far without dropping into the red.
Are all my investments like this? Of course not. Below left is a company whose farmers lost a season due to a huge, regional flood. Below right is a company whose sales dropped when the pandemic struck.
Sometimes, like below left, even an elephant hits a plateau of growth, and sometimes, below right, that plateau can last for half a decade. But in both these cases, the expectation is that the right amount of capital at the right time will get them back on a steep upward trajectory.
The takeaway from all of this should be that there is a massive, untapped opportunity investing in these types of companies. Real companies selling real products, growing at a pace that more than doubles every 18-24 months.