Eliot Pence - Tofino Capital, Frontier Markets, Emerging Technologies (Frontier Markets Podcast #15)

Hello, and thank you for joining me on the Frontier Markets podcast. I'm your host, Krishan Kupjand, and my guest today is Elliot Pence. Three quick facts about Elliot. Elliot's the founder of a fund called Tofino Capital that invests in Frontier Markets. Two, Elliot was previously the head of international and rural industries, a company I deeply admire that is building the next generation of defense technologies in America. And three, he spent a lot of time engaging in market expansion and international market exposures elsewhere as well. So Elliot, I think I've shared a bit of a summary of some of the high-level things you've worked on. I'd love to hear the story from yourself in terms of the timeline, the lessons you learned from these experiences, and how it leads to you engaging in the thesis that you are with Tofino Capital today. Sure. Well, great to chat, Krish. Yeah, so I grew up in Canada to a South African mother and American father in a place called Victoria, BC, which is kind of a beautiful British outpost on the west coast on Vancouver Island. Did my undergrad there, and then started working on the continent in Africa in 2004 as part of a Canadian government sponsored program with a group called the African Virtual University. So this was sort of the precursor to Coursera, a MOOC, I think we call it, a massive open online course. So that was really my first exposure to what kind of was going on in frontier markets and how technology could play a role there. I then did my graduate work here in the States at Yale and then moved down to DC, worked for a consulting firm that was helping U.S. multinationals invest on the continent called the Whitaker Group, was there for a few years and then worked for another consulting firm called the Clardy Associates, started their Africa practice, worked with companies like Walmart and Cargill and Archer Daniel Midland, Google, so got kind of wide exposure to multinational interest in emerging and frontier markets. Left that in 2018 to go to Andrewle, which was a client of McClarty's, was there for four years, started their international focus and then last year left Andrewle and joined a company called Cambium and started fundraising for Tofino Capital and we stood that up with my co-founder sort of mid to late last year. So that's me. Fantastic. Would you be able to walk us through the way in which market expansion happens for these multinational firms and how they think about it? Yeah, sometimes it happens, well, I guess the top line answer is it happens a bunch of different ways and sometimes the firm is like fundamentally focused on growth markets like China and India and other times they're not and we were primarily working with those that didn't really have a sense of what was happening internationally. So in many ways, it was sort of their first look at different regulatory environments that were outside of, call it North America and Europe. And so I think they would do so cautiously, folks that were moving into Africa would either do it organically or inorganically sort of acquiring companies, testing the waters for a few years, transferring some staff so that they could get some embedded knowledge about operating environment and then allocating more capital off balance sheet to expand once they've kind of got a thesis about where they're going. At other times, it was a board member that grew up in a country, international place and said we really ought to be kind of in this market that's growing at 78%. Why aren't we there? And other times, it was sort of an enterprising regional lead that had a friend in South Africa or Turkey or what have you. So I'm not sure if there's a sort of specific way that multinationals expand. But towards the end of the 90s, there was a real push from at least US multinationals expanding into places like Latin America and South Asia. And that's really where McLarty got its start. Mac McLarty was President Clinton's first chief of staff. He then went to become his sort of special ambassador to Latin America and so had a ton of connectivity on the continent. They linked up with Henry Kissinger. It was Kissinger McLarty for about a decade. So obviously, Henry Kissinger brings sort of whole another weight in global politics and strategy. So I joined 2013 to help build out the Africa practice. And in that time, what have you learned about the main levers for success in effective market expansion into these front-toon emerging markets? Yeah. No, it's a great question. And this is a bad answer. But I think that the main thing that I've learned is you've got to be humble. These are markets that don't operate the same way that the West does. It's, in many ways, sort of 30, 40 years behind. So the regulatory environment looks different. The context looks different. The capacities are different. The technologies may not have been as diffuse in these markets. It's not to say that they're sort of not interesting commercially. They certainly are. It's just to say that if you come into it with a specific model or mindset of how things are going to happen, you're probably going to fail. So you really have to be open to thinking about reorganizing your business in these markets and being humble about the business model that you've built in the West and its applicability to the market that you're expanding into. OK. Final question on market expansion. Would you be able to share a case study or story of, one, a successful market expansion and two, perhaps a failed one that kind of illustrates a lack of humidity or certain struggles that may be embedded in this? Yeah. Well, almost all successful market expansions are preceded by failed market expansions. It's hard to pick out one, but we worked with Walmart in Africa. They acquired a company called Massmart. I wouldn't call that a failure because it certainly wasn't. But it didn't kind of achieve the expectations that I think Walmart had or had assumed the continent was going to give them. They tried to expand up into Nigeria and did and kind of had some back and forth with regulators and misinterpreted some of the commercial potential. But they've since kind of recalibrated and are kind of leveraging their know-how in a much better way, working with the knowledge that they acquired Flipkart in India. So presumably, there's some knowledge of operating knowledge that they've kind of embedded into their African operations, working with local operators across the continent, not just Massmart, which is kind of primarily a SATIC-based entity, and dedicating staff that had real power and kind of real influence back home in Arkansas. And so, I'm not sure I'd call it a failure. I think it was sort of not what they had wanted, but they certainly kind of come back and renewed their interest on the continent in a different way. I mean, how to do it well again, like, it's a hard question because most companies that have done it well have failed first, learned, and then integrated lessons from that. I don't know if there's been kind of a one and done play for at least Africa that I know of. I appreciate that. It reminds me very much of one of Jeff Bezos' shareholder letters. He talks about expectations management in particular. He talks about how long does the average person think it takes to learn how to do a headstand, and you think maybe two weeks, maybe six weeks, no, it's like six months if you're at the median, and most people are at the average or median, and most people quit at the two-month period because they're like, "Well, screw this. It's just a headstand. Why is this taking so long? Why is something wrong with me?" But I appreciate that you shared that, oh, no, it's even for exceptionally operationally competent firms like Walmart. It takes multiple iterations to go there, and if one has the calibration you use that word or patience, you can eventually unlock these new paths, which I think is fantastic. Yeah, absolutely. Moving on, could you share the thesis behind Tofino Capital? Yeah, sure. My co-founder and I, Aubrey Ruby, had been watching and really operating in frontier markets for two decades, and we saw kind of a number of trends, but two in particular that were exciting, and we felt like we're kind of almost laws of physics, so demographic growth on the continent, and then digital infrastructure. You'd see, if you looked at kind of Latin America or South Asia, you would see two trends where startups started to take off the smartphone penetration rate and then the cost of data. Once those things were diffuse enough within the population, you saw like New Bank or Grab or GoTo or whatever pick up around 2011, 2012, and we kind of felt like something similar was happening in Africa and other frontier markets, where data was starting to come down, Africa still got higher data rates than most of the world, and certainly smartphone penetration rates, but so those two things were major kind of influences. The other thing that we saw was just the complete lack of risk financing, so venture capital. India, Brazil, China all had per capita venture capital rates of sort of 20, 30, 40, 50 dollars per person, and in the markets that we were looking at like Egypt, Nigeria, or Bangladesh, it was sort of less than two or three dollars, and so we just kind of felt like the entry price here was inevitably going to be much more attractive than other saturated markets, and then there's other things, there's stagnant growth in internet businesses in the West. There's some interesting things happening in health and energy and manufacturing that was sort of decentralizing operations like off-grid energy, solar power. During COVID, there was a conversation about what does MRI and A mean for places that have pretty dramatic health challenges, obviously Africa sits there, and then manufacturing, you've got interesting things happening, and kind of biomanufacturing, additive manufacturing, kind of more localized context rich sorts of industrial development. Those were the sort of main themes that we were looking at. Fantastic. In terms of over that kind of your 20-year plus experience of looking at these markets, as you've developed your taste and your thesis when it comes to the types of companies that are illustrative of either A, what Tafino finds interesting, or B, what you kind of Percy find interesting within these markets, would you be able to share one or two of those companies and maybe the stories behind them? Yeah, for sure. I think the headline point here is that most of the companies we're investing in, we're investing in from a kind of people-specific or people-centric lens, and so we're looking at the sectors obviously, I mean that matters, but I would say a lot of what drives our investment is because of people. I think this is where a lot of venture funds go wrong is that they think that the way to invest in new markets is the way they invest in the markets that they've been investing, which is sectors or trends or et cetera, and then you kind of just kind of find the team. In Africa, the business is going to change multiple times, and the people that are able to pivot constantly are really kind of critical. That having been said, I think there are interesting macro trends, like the ones that we were talking about earlier. One company that we invested in a few months ago called Cutstruck is a Nigerian construction marketplace, so it's basically organizing all of the needs that a general contractor might have for a specific build. This is an industry that's kind of dominated by one or two players and then thousands of smaller players, and that's largely because the one or two players kind of manage the information landscape because it's non-transparent, so like the price of cement or the price of rebar or what have you. The trend that they're really focused on is this kind of macro, Africa needs 100 billion per year to fill the infra gap. What got us really interested in this company was a study by Yale Prof that looked at urbanization trends in Africa and estimated that per every 2.6 people that move into cities, of which there will be several hundred million over the next decade, so this is a near-term trend. For every 2.6 people, a single building is built. You can imagine the macro tailwinds for an industry where you've got 500 million people moving into urban areas and call it 30 cities over the next 10 years and 200 million buildings being built. Usually this is a play for Chinese or Turkish construction firms, but they've kind of been pulling back. Obviously Turkey had that disaster, but China is BRI and also they've kind of been pulling back from large construction, and they're really focused on large construction. A lot of these buildings would be kind of smaller household dwellings and small business dwellings, and so there's an opportunity there for kind of SME contractors that we really liked. Another company that we really liked, and I guess this also kind of reveals a bit more about our thesis, is that we do think that frontier markets are where you can get the greatest return for your dollar, but that doesn't necessarily mean that they have to be from those countries. So Atmo is a weather prediction service started by I think a Canadian and a French guy that are now based in Berkeley, and their basic thesis is that we have done weather prediction the same way for the last 60 years, it's called the classical method, and that's really not offered us a lot. I mean, I can't think of a profession where you can go on TV and say there's a 50% chance of something happening, and people coming back and being like, great, that was super informative. So obviously weather and weather disasters play a major part in frontier markets, lack of infrastructure, lack of planning, but five of Africa's top 30 deadliest weather disasters has happened in the last 18 months, and so this is a trend that is continuing. And so what these guys have done is they've built essentially a platform that integrates local data and historical data from the markets into their prediction system, and that's able to give you longer term what they call medium range weather prediction forecasts. And that allows governments, it allows militaries, it allows companies to plan better with more time. Most of the way countries get their weather data is from, you know, they've got local kind of base stations where they're getting some information, but they're also just licensing it from NOAA from the US, and sometimes that can be an exorbitant cost. So they're really bringing the cost curve down for understanding weather systems. They're looking at some work in East Africa now. They've got some US contracts as well. So that's, I think, a super interesting and exciting company that we just invested in a couple of months ago. Fantastic. A few follow-ups on that. So one is I previously worked at this think tank called the Charter City Institute that's very much dedicated towards this trend of urbanization that you cite and the potential unlocking of A, new consumer bundles, but B, new forms of productivity as people agglomerate away from, you know, fairly sparsely located villages, and you move to these urban centers where, say, you have an industrial zone, manufacturing zone, mining, et cetera, mapping those opportunities is an incredibly interesting thing there. One thing that I wanted to ask about later on, but I think now is a good time to ask instead, is you mentioned the Turkish contractors and you mentioned Belt and Road. It strikes me that the US equivalent for kind of participating in these markets is not as pronounced despite the size of USAID or despite the IMF, et cetera. What are your thoughts on how the US and how Western nations, say the G7, can kind of more effectively participate within these markets? There is this quote that comes to mind, which is every single time the British go to Africa, they give the people a lecture, every single time China goes to Africa, they build a hospital, and it strikes you that, you know, building goodwill through enhancing productivity and through kind of, you know, having the skills transfer programs matters a lot, but I'm just curious. What are your thoughts on that landscape? Yeah. There is a Chinese entrepreneur named Helen Hai that talks about how Americans are very cautious when they explore new regions, and it's totally inconsistent with kind of the American psyche, and I think she's totally right. I mean, the country was founded on this sort of frontier mentality, and I think at least as it concerns business and frontier, we've been unusually cautious. I think one of the things that the US really has as a competitive advantage against countries like China, because I don't think the US can really compete on a kind of just, you know, allocated dollars or, you know, they're not going to start building bridges and stadiums and palaces and stuff like that, but where it really does have a competitive advantage is in its capital markets. That's usually how the US expresses its power is the ability to invest, to leverage its pension funds, its institutional investors. And I think the challenge is in a lot of the markets that we're investing in, those capital markets are super thin. They are overcapitalized in some level, as in they don't necessarily, the companies that are listed don't necessarily need to be listed, they're sort of forced to list. And if you're a growing company that's 10 to 20, 30 million revenue, you're going to list in New York or London. And so I think as the US starts to reconsider its role from a kind of international expansion and basis, they should really focus on how can we build capital markets so that we can influence corporate expansion through our pension investors, our institutional investors. Because really, we have spent a ton of time trying to convince Americans and investing in places like Africa or Egypt or whatever in Pakistan, Indonesia is not risky. And it's just not true. I mean, it is risky and people should be aware of those risks. What we have done little time doing is giving people that have already kind of come to terms with that risk a vehicle to take risk. And we just don't have that. And that's what capital markets provide. Yeah. Do you have any thoughts on what the potential shape of such a vehicle may be? I know there's been a lot of talk on stuff like blended finance. I know there's a lot of potential in terms of lower cost securitization through tokenization, et cetera. There are ideas that are floated in white papers by the IMF and their kind of ilk. And it strikes me that the manifestation of that in the marketplace, though, is not as pronounced as one would hope for it to be. What are your thoughts on how one may navigate that idea, Maze, if that was ace? Well, it starts with building the capital markets in the countries in which the US wants to invest. And that's really a conversation with whatever version of the SEC exists in the countries and saying, look, here's what we think would transform local or international investment into your local companies. I think another thing that was floated several years ago was the ability to invest sub-nationally. So we have municipal bonds in the US. We can invest in a city. We can invest in a project, et cetera. Those get rated, people, sell side by side folks can discuss what makes sense and where they want to allocate risk. There's no such thing in most markets across Africa, partially because the ratings agencies don't see enough flow going into those places. And so if it's not rated, people aren't going to invest. What you see is just national bonds and those kind of ebb and flow and whatnot. But if you could make vehicles that give you specific exposure to specific trends, I think that would open up a lot more risk financing for folks in front of your markets. Incredible. You're totally right. There isn't any kind of specific vehicle, apart from maybe investing in a publicly listed retail thing that can allow you to say, oh, I want exposure to Lagos States or I want exposure to kind of administrative apparatus. One of the striking things in terms of internal capital market developments is in China, because they had so many different types of special economic zones, they all had varying effectiveness, growth rates, et cetera. Many of them were structured on these triple P contracts where the private developers were given essentially the capacity to tax within that region. And the more lax those were, the more growth they were able to incubate because they had ownership over the future growth as well. One can imagine, what if there's a way for public investors to kind of get exposure to that or pageant, et cetera. Very interesting stuff. In terms of the companies that you described before, what does the kind of growth dynamics look like for these frontier markets, companies in contrast to their developed market peers? Because I feel like you have good exposure to that side. So what do the economics look like, what does the constraints look like? Yeah, I think the thing that you have to understand first is you're just dealing with a very different operating environment. So most consumers are offline right now on the continent, the sort of bottom billion. Yeah, they have smartphones and yeah, they might have data coming to those smartphones. But if you're building a business that is exclusively online, because that's how you built it everywhere else, you're going to fail. And I think the core challenge for a lot of companies is to say, how do we kind of start offline but over time shepherd people online. And getting that mix of like offline, offline business model is not intuitive, it's not easy especially for a high growth tech company that's looking to expand. So there's a ton of product iterations, there's a lot of like unique cohort management, there's assessments of consumer behavior, there's a ton of pivoting. So I think the front end of these expansion efforts often look pretty slow. But once you've got the model locked in, you've got kind of the agent network, you've got the regulators where you want them, it can look like hockey stick. But you really have to get through those first few years of volatility and doubt and so forth. Because you're kind of both teaching the market, learning the market yourself, and growing the market. Usually, you want to just be doing and then finally you're selling into the market. You really just want to be doing one of those things, selling into the market. When you have to do four of them, that's kind of sand in the gears. So again, it takes longer than you would expect, I guess. Interesting. Zooming out of it, what do you think are some underrated themes or even problems that haven't really been solved within some of the sub markets that you've been looking at that, again, just people aren't paying as much attention to as say certain types of fintech-based these are more popular? Yeah. Well, I mean, I guess from my time at Andrewle, just realizing the cost curve of functional defense and security, that's going down very quickly. And I think to the favor of militaries that have limited budgets, so you've seen a ton of emerging market multinationals looking at Ukraine and looking at, before that, Nagorno-Karabakh wars and saying, "Well, drones are fairly easy. You can build a drone for $500, $600 that could be effective." So I think defense tech and security tech is an interesting theme. It's hard in these markets because it's such a government conversation and it's so kind of mysterious and cloak and dagger, but I do think that there is some truly transformational companies that are coming out of Turkey, India, certainly Israel, obviously, in defense tech. But it's a theme that I don't think a lot of people think about and one that I'm particularly interested and excited about, Ditto Space in these places with the cost of sending something to space going down exponentially. I think there's a lot of interesting opportunity to revisit how services, some services are provided on the continent and in frontier markets. Fantastic. One anecdote that I will share with you, which is related to those two themes right at the intersection, is a friend of mine is building a company that, and I may have shared this with you before, it essentially has these balloons that go into space and that have applied machine learning to the visual model of what's going on as it looks down below. And as a result, you just have incredibly high fidelity capacity to track what's coming in and out of an area. And if you're looking at certain areas in, say, for example, Nigeria, massive landmass, certain pockets of these various states have certain problems when it comes to terrorism, etc., the ability to have this one macro map of the ins and outs of certain areas from a security perspective is transformative. And so they actually sell, in this case, to middle-sized governments in Europe, but they were also going to contract with a few countries in Africa. And I think that's an example of, as you mentioned, that lowering cost curve or defense. As a more macro observation, I would say, I think of Kagame and Rwanda, where there's this acknowledgement after such a brutally chaotic, non-Leviathanesque kind of genocide that took place there, they realized, okay, security is number one to having a foundation to build up a civilization and a society and an economy. Without that, you are nothing. The cost is too high. You just have chaos. You don't have the capacity to do things. Mozambique is a good example where they had struggles with liquefied natural gas and the kind of rebels that kind of came up. And so this is a very exciting theme, I think, a morally very important one as well, despite some other people may seeing it differently. Yeah, I agree. So the follow-up there is, what do you think an overrated theme is within these markets? Well, I think any kind of copy and paste model from Silicon Valley into these markets, it's just hard to do. I think Last Mile is super hard. Unit economics on Last Mile are difficult. Managing staff that size is difficult. Obviously, a lot of the, part of the crypto craze, I think, has kind of fallen by the wayside. I think there's still promise in things like stablecoins, and you'll certainly hear that in venture communities across frontier markets. But like NFTs and stuff like that, I don't think they hold a ton of immediate promise maybe in the future. And then any businesses that's fully online and kind of doesn't recognize the fact that offline is kind of how you get folks online. Very interesting. You mentioned Silicon Valley. What are your thoughts on strengthening the relationship between Silicon -- so for example, you mentioned before, strengthening the relationship metaphorically with New York in some sense and frontier markets because you're thinking about the financing, right? Then there's the development and maybe structural adjustment side, which comes from DC, more policy side. Then there's the vanguard of technology, which is Silicon Valley, and its interactions with frontier markets. What are your thoughts on that interplay of these different cultures perhaps trying to interact with these markets, and what does it mean to strengthen that in the longer term? Yeah, I mean, the reality is they each have very different but very specific interests. So New York obviously has an interest in expanding capital markets and looking at trying to find out essentially alpha and arbitrage across capital markets. The Valley has a specific interest in user growth, and a continent like that, Africa offers some interesting, attractive user growth potential as does LATAM. And then in DC, it's much more -- for frontier markets, it's a little bit -- it's more diluted the interest. I think we're entering a kind of era of great power politics, and frontier markets may not be getting the kind of attention that somebody who invests in them might want to see. I also tend to think that some of the institutions in DC, like the World Bank or IMF are frequently fighting the last battle, so they're approaching the opportunities with tools that might have been relevant 20 years ago. And this happens with the military, I think it happens with those institutions. But I think that they think that they're being innovative, you know, and when you're sitting in downtown DC and looking at regression models and data that might have been provided six years ago, you're by definition not connected to what's happening. So we'll see what the new president and World Bank, Ajay Banga, has to do about that. But those sort of ways of being are pretty persistent. Interesting. How do you approach fund construction and setting up nodes for deal flow across these frontier markets? Yeah, so we have a very specific fund, like portfolio approach here. So we're kind of early in, early out, and then very late in, and then late out, sort of a barbells approach. So what do we mean by that? We really think the opportunity is, can we source the deal, can we source the opportunity, can we get a good valuation, and can we get the right people around the table to get us out, not at series C or series D, but at series A. So one example of that is we just made the first investment in a Somaliland company, a healthy RP. That's a huge company, comparatively speaking, with a very limited valuation. They were being courted by the largest multinationals in Somalia, the Hubsheel and the other Telco. And maybe we exit to them in the next year or two here. So that's kind of one example on that side, and then on the late in, late out, what we're really talking about there is, how do we get into companies like a Flutter Wave or a Chipper or a Andela that are series D plus have plans to IPO, and we get kind of a bump on the IPO. We bring a slightly differentiated kind of capital, so we're obviously not going to get in because we have a quantum of capital that exceeds others, but we do know regulators. We do understand the political dynamics of large companies in these markets, and so we could be valuable. So that's the thesis, we'll see if it plays out. Could you share more on the value-add component of the fund? I know you guys previously ran a expert network type thing, I think. So in 2014, we started an expert network called the Africa Expert Network. That failed, but we pivoted into a PR company called Insider PR. And really, it was through the PR company that we got the idea to start investing. We saw these phenomenal entrepreneurs that just weren't getting noticed, and we kind of realized that that is itself value. And when you're at a PR company and when you're working for these customers, you get a very good sense of how they operate and how they handle stress and challenges. And so it gave us this sort of free diligence, like subsidized diligence platform. And we still get deals out of Insider PR, so that has 10 people. We had expanded it into Latin America and Middle East. We've since pulled back from those markets and focused exclusively on Africa. But the value-add there is we understand media, we understand PR, and we also understand kind of how regulators think about media and PR. So that's the value-add. Fantastic. Could you share more on the Somali ERP company in terms of what is the backstory behind how it's founded? Where does that fit within the kind of healthcare system of the country? Yeah, for sure. I mean, the founding story is fascinating. So it's this Somaliland kid. It's a founding team of three. So just as kind of background, Somaliland, it's the top end of what was Somalia. It's been functionally independent for the better part of 40 years now. Tech system reasonably well governed, obviously has had this challenge of being attached to Somalia and so hasn't been able to get kind of financing, has been sort of bolted on to all the challenges that Somalia has had. But there's also a fairly sizable diaspora. So it makes what you would think is a low-income country kind of look more like a middle-income country because of the diaspora. In fact, one of the largest companies across Africa and maybe the most interesting, successful company, a company called Dahabshil, got its start in the region kind of providing remittance flows. And so he was on a kind of vacation back home, I think I'm remembering this correctly, had a incident where he needed to go into the clinic. The clinic had records going back 30, 40 years so that the ERP system was all written in books. And so what he essentially did was to say, "Look, let me take a picture of each of those input logs and I'll just digitize it and give it to you on your phone so that you don't have to like flip pages to find out when my last visit was to this clinic or to see kind of what the condition of my parents was and to assess my current condition based on that." So it was kind of that idea of how do you set up a back-end ERP system so they're now operating in 30 different clinics and hospitals. They also do medical tourism so they facilitate surgery to India, they've got kind of a service that provides kind of end-to-end for that if you've got a deeper challenge or a surgery need. So it's a very interesting platform that you would never really hear about because that entrepreneur was just going about his business digitizing and transforming the healthcare system in Somaliland. Brilliant. All right. Cool. Final two questions, one is what other strategies do you think may work for funds that you mentioned for example the barbell strategy that you guys approach. What are some other strategies that may kind of work with a fund that has a different type of scale or a different type of mandate that maybe doesn't exist right now in the market but you think someone else of the right type should approach? Yeah. Well, I'll maybe start by saying what I think is the most challenging fund structure which is these kind of series A, series B growth funds right now. Part of the reason why and I didn't kind of mention this when I was talking about our barbell strategy is we do that partially because it gets us better valuations but also because it avoids this currency challenge. So when you're very young startup, you're not being valued on P&L or EBITDA or whatever, you're just being valued on traction. Likewise, when you're a much bigger company, you've kind of figured out your unit economics so you also don't need to necessarily worry as much about currency. When you're in the middle, you're really trying to figure that out and you're trying to tell a narrative if you're the company that you're going to figure out your unit economics or your unit economics are great or don't worry about currency because we've got this hedge or that hedge or what have you. But it's not a clear story. So I think the biggest challenge with investors is understanding the currency risk and how to get around the currency risk. Most of the successful businesses over the last 150 years on the continent have been either kind of USD backed or commodity backed plays. And so currency risk has rarely been an issue. But this new breed of company that is doing kind of consumer plays are going to need to figure out how do we deal with that problem, you see it with Jumia now. Jumia in some ways has been a great company and in other ways has been a disaster from a public perspective. And I think a lot of that comes down to managing unit economics and making sure you're not paying more per dollar to get the new consumer in. So fun strategies, I think there's look, it's dramatically under invested frontier markets are by definition dramatically under invested. I think just being a fun period is a good thing, even if you're in that middle space. I think we've got the best strategy. I think as capital markets get developed more, there's probably a role for a kind of public play in some of these places. And then obviously like, you know, and I think this is a very interesting model is the is the vultures folks that are kind of identifying the companies that are just like Ponzi schemes or lies. This was a case and is a company called Tingo a couple months ago that was essentially revealed to be a total lie by Hindenburg. So like short selling companies that you know, we just don't make sense. It's also kind of an interesting opportunity. I think that a lot of people don't really look at that well. Awesome. Final question is any recommended resources or just a course to action for our listeners? Recommended resources. Look, I do a lot of quote unquote research on Twitter, on, you know, WhatsApp groups that I'm a part of and Telegram groups. So you know, to the extent that's possible for viewers getting kind of monitoring those more and getting involved in them and being active in those sorts of forums, I think the better beyond that, it's kind of a lifestyle thing. You just kind of have to be in it. Fantastic. I actually just realized there's one final question here, which is, I know you've been doing some work thinking about the application of AI and LLMS to markets. Would love if you could share some of the insights from that. Yeah, look, we think that there is a low key, very interesting opportunity with LLMS on the continent, largely because, and this is not kind of a unique thesis, but we don't think it will be a replacement. So I think that the canonical thinking is, oh, you know, low cost labor will be pushed out because AI will replace them. That might happen 20, 30 years down the road. But for the next 10 years, at least for the fund life that I'm running, I think what you'll see is sort of extreme augmentation of human capabilities and capacity. And where this is relevant for Africa and other frontier markets is specifically in junior coders. So Ndela is one of the largest startups on the continent. They train coders, but they usually get them to kind of junior mid-level. And anybody that's worked at a software startup knows that the sort of allure of the 10x coder or the senior developer really adds tremendous value to business operations and potential. And so where I see this playing a role is Africa's got 700,000 junior coders if they can develop kind of tools to make these junior coders mid or senior level developers. And that's already happening. I mean, you got the GitHub co-pilot, you've just got ChatGPT that can do it itself. You've got other things. There's a startup called Talstack that's very interesting that's trying to build this. Then you've got kind of like almost a leapfrog effect in the developer community, which I think is very exciting. So I think that's where LLMs hit first. Who knows where they go kind of after that. And to be honest, I'm not too, too worried about the idea that frontier markets are going to be passed over by LLMs, you see kind of less expensive, smaller models being developed every day. So I'm not super worried about the GPU effect and the cost of running LLMs either. Got it. All right, awesome. Elias, thank you so much for making the time for this interview. It's been fantastic. Likewise, Chris. Great to meet you and look forward to hearing it.