Noureddine Tayebi (Yassir) on raising a 150M Series-B to expand in Africa and beyond, giving back and the multiplier effect
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On this episode Pat sits down with Noureddine Tayebi, Founder and CEO of leading on demand services super app Yassir. The YC-backed company started out in 2017 to provide on-demand services in French-speaking Africa quickly scaling beyond its native Algeria into neighbouring Morocco and Tunisia. Today, the company operates in six countries and 45 cities, where it is used by more than 8 million users. Last year the company closed a historic $30M Series-A round backed by the likes of WndrCo, FJ Labs, DN Capital, Kismet and Endeavor Catalyst. Now, they just announced a $150M Series-B led by BOND, with the participation of DN Capital, Dorsal Capital, Quiet Capital, Stanford Alumni Ventures (aka Spike Ventures) and Y Combinator, among other strategic investors.
On this episode you will learn about:
The state of the startup ecosystem in Magreb and the opportunity
How to overcome hurdles in tech adoption in B2C by creating trust
Yassir’s scale-up journey and lessons learned
The importance of paying-it-forward and inspiring future generations of entrepreneurs
TLDR:
The returnee, aka diaspora effect is huge in propelling forward emerging ecosystems. Do not underestimate, highly successful professionals returning to their home markets bringing with them their network and experience — We have the unique opportunity through tech entrepreneurship to reverse the brain drain emerging markets have suffered from historically
Creating trust is crucial to scale digital services in cash-reliant societies. Make sure that your product offering solves a real problem and has low entry barriers to increase trust levels step by step.
Raising capital internationally means educating your investor base on your local market. We often see that founders do not only have to pitch their business, but also their geo. Be clear about the macro opportunity on the ground and connect it in a compelling manner to your business reality
Paying-it-forward and the multiplier effect are crucial ingredients for thriving tech ecosystems. Silicon Valley is not just about the brains and money, these are by-products of the underlying factors: Reciprocity, a culture of giving back and supporting one-another
If you want to listen to the full story with Noureddine Tayebi, check out the episode:
👉 Spotify
From Silicon Valley back to Algeria
Noureddine spent 15 years building a life and a career in Silicon Valley. He first moved to the US for grad school and subsequently completed his Phd. in Engineering at Stanford. After several stints at big tech, he started his first company InSense in 2014. Over the years he became more and more engaged in the Algerian ecosystem as an angel investor and mentor as a way to give back to his country.
“The experience of founding my first company was the most enjoyable, educational, stressful, ‘most everything’ experience till today”
He came to realise that the biggest problem in the Maghreb region, wasn’t necessarily the lack of funding or bureaucracy, it was ‘entrepreneurial mindset’. Noor makes a very compelling argument that entrepreneurs themselves were not leveraging the full potential of their companies.
A tough statement to be made. When challenged on this, Noor elaborates that certainly one factor is ambition and thinking big, but other factors are an education system that pushes students towards traditional careers, not valuing innovation or new ideas. Another crucial factor is the missing desire of defying the status quo. If you want to be a successful entrepreneur you have to believe in yourself, push the limits of what is possible and if you can’t find a solution, find a way around it.
Hence, his main motive to come back to the region was mission driven; Noor wanted to have a lasting impact on the entrepreneurial ecosystem in his country, empower others and become a role-model himself to inspire future generations of entrepreneurs.
My biggest dream with Yassir, is that every person that goes through Yassir, would one day start their own company
How to create trust for digital services in cash-reliant consumer segments?
On-demand services build trust in a subconscious manner, starting first with ride-hailing, then moving into food and now payments. Yassir strategically increased the trust level amongst its customer base by adding more complex components to its service offering. Yassir in Arabic means “easy,” which further emphasises the strong customer focus of the company to fix real problems for the population in the countries they operate in.
To be successful, it was clear that Yassir had to service the region adequately and that their products were highly customised for the needs and desires of the consumers in francophone Africa to ensure high degree of product-market-fit.
Pitching and educating investors on your ecosystem
At the beginning, fundraising for Yassir was tough. With almost no growth capital on the ground, Noor had to seek out international investors. Naturally, he tapped into his network in the valley. With mixed results, even with people who knew him well and trusted his capabilities as a founder.
“We (the Maghreb region) were just not sexy enough”
This is a classic challenge for emerging markets founders, instead of raising checks with global VCs, they first end up educating potential investors on their market.
Noor had to confront two types of investors.
“Outside my comfort zone”: These are the straight-up NOs, the startup is operating outside the traditional geos of the investor, hence its beyond the investor’s mandate, there is not much that can be done, it’s still worth educating them on the opportunity, even though, your company might not directly benefit from it
“Taking it slow:” This type says that potentially they could be interested, but it is going to take a while, because they have to build “conviction” first. Annoying and time consuming, but you still have to make your case.
In both scenarios, you just have to plow through the NOs, to get to the few YESs as always, but as an emerging markets founder you have an additional responsibility to educate and promote your country or region. Only by that you ensure that the globalisation of venture capital accelerates further.
A positive side effect though, with no ample capital available, is that you have to execute diligently and be frugal, which certainly is a big advantage when winds in the funding landscape turn.
“What we felt was a disadvantage (the lack of availability of capital), turned out to be an advantage later on”
One of the reasons Yassir applied and successfully went through YC was to get that additional stamp of approval and the signalling effect they needed to get the trust of seasoned investors to back the company, which ultimately led to Yassir’s seed round. After that it was only a question of executing well and at one point in time, Yassir just became too big to be ignored. When the Series-A came around in 2021, the momentum was already set for the successful Series-B they closed a year later. As always, execution was key.
The Maghreb opportunity
Purchasing power is greater than you think: The majority of the population is under 35 and the family size is around 5, more than double to developed markets such as Western Europe. Due to cultural reasons many still live with their family, hence they have extra-disposable income they can spend and consumer behaviour is closely correlated to the whole family unit
The size of the informal sector: The value of the economy of Algeria is around $200Bn, 50% of this is informal, the purchasing power in the informal sector is bigger than you think, but does not show up in official statistics.
Algeria has a GINI coefficient of 28 (only second to Sweden), demonstrating a more equally distributed society with high levels of education and a strong middle class, which stands out to other emerging markets that historically have suffered from high levels of inequality.
Why Noor wanted to become an Endeavor Entrepreneur?
What people don’t realise about Silicon Valley is that it is not about brains and money, it is by-product of something much more profound, which is a shared value system where others support each other, paying it forward and being convinced that by helping others you will be successful yourself.
“Endeavor is what you see in Silicon Valley, but at the global level”
“Endeavor is an amazing network that you can take advantage of, but also to give back — What a great way to make the whole world successful. Being part of a network that is that global and with that mission is incredible”
If you want to listen to the full story with Noureddine Tayebi, check out the episode:
👉 Spotify
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[Investor Journey] Bridging Silicon Valley & Africa — Mbwana Alliy (Savannah) on fund structuring, LPs and retaining scale-up talent
[Investor Journey] Unlocking VC in Pakistan — Rabeel Warraich (Sarmayacar) on starting the first institutional fund in the country, false perceptions and getting the flywheel going
If you haven’t yet subscribed, join the 1,124 Emerging Markets Enthusiasts via Substack, Medium, or LinkedIn and follow the show wherever you are getting your podcasts. If you enjoy the work we are doing, drop us a review or rating on your preferred podcast app.