EP 195 – Ben Harburg – MSA Capital – Is Southeast Asia an Innovation Laboratory?

by | Apr 20, 2022

The Asia Tech Podcast had an exciting and in-depth conversation with Ben Harburg, a Managing Partner at  MSA Capital. He serves as the CIO of Emerging Technology Markets and leads global growth for MSA’s portfolio companies
MSA is a global investment firm that invests from seed-to-growth stage investments across consumer, enterprise, core technologies, and healthcare. The firm was established in 2014 and manages $1.7 billion in capital across multiple funds.
Some of the topics that Ben covered:
  • Did a Fulbright for a year in Germany studying Islamic Sciences and Oriental Philology
  • Traveled to Egypt as a 13-year-old
  • Grew up as an ex-pat, so had a global perspective from an early age
  • China is an innovation leader across multiple tech verticals
  • Alibaba’s expansion strategy does not work
  • Investing in the GoJek of Iraq
  • The difference between emerging markets and emerging technology markets
  • How the United Arab Emirates built a platform for long-term entrepreneurial development
  • A large and growing appetite for tech startup investment in Africa
Other titles we considered for this episode:
  1. Touching Down, I Remember the Heat
  2. There Is an innovation Pendulum

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:02
Okay, we’re on. Hi, this is Michael Waitze and welcome back to the Asia Tech Podcast. Today we’re joined by Ben Harburg, a managing partner at MSA Capital. Ben, thank you so much for joining us today. How are you doing?

Ben Harburg 0:16
Well, great to be here.

Michael Waitze 0:17
You sound unbelievably great. By the way, just thanks for coming. Before we get into the main part of the conversation, let’s give our listeners a little bit of your background for some context.

Ben Harburg 0:30
Sure, a managing partner at MSA Capital we run venture and growth funds both in kind of Greater China, as well as have a separate emerging market franchise that covers everything from Latin America, Africa, the Middle East, South Asia, and Southeast Asia. And we have physical offices across Greater China, Southeast Asia, South Asia, and Middle East and Africa. Prior to joining MSA in 2015, I had co founded what’s grown to be one of the largest commodity trading companies operating in Asia. They’re having a certainly a good good few months right now as well. And prior to that, I was a consultant. So I started my career with the Boston Consulting Group started in actually the Berlin office but then was one of the first boots on the ground in the Middle East and helped to set up our Middle Eastern presence based out of the UAE but operating regionally. And before that I was a aspiring diplomat and and did a lot of internships and spent a lot of time and kind of the foreign policy realm. But the first real job was a consulting.

Michael Waitze 1:34
Where are you from originally?

Ben Harburg 1:35
From Santa Fe, New Mexico. I was born in Colorado Springs, but I’m a fourth generation New Mexican, one of the few in the crowd out here.

Michael Waitze 1:44
That’s amazing. That’s amazing. Can I ask you why you got how you got to the Middle East in the first place? Right. You said you were at BCG and Berlin did I get this right and then restarted the office or worked in the office at the beginning in the Middle East? How did that happen?

Ben Harburg 1:58
By chance, actually, a little a little bit by chance. And maybe there was some some some back back office work going on there. I prior to joining BCG, I’d done a Fulbright for your Germany and I’d studied Islamic sciences and oriental philology was was the department that I was based in had, at first at a university in Bonn, Germany, north north Rhine Westphalia, and then it at free university in Berlin. But but actually what happened was I got my job with BCG in Germany and did all my case interviews in German. But I think it was a bit of a fish out of water. And they didn’t want to put me on on a case team in Germany. And so they worked very hard in my first project to send me on an international case. And it just so happened that, that they found one for me in Dubai. And so my first project was a was an Islamic banking case in the UAE where we were building a digital Islamic bank or Islamic bank for a traditional retail bank. And so I was I was sent down there and I just loved the energy of it, it was those were the boom days. So this was 2007. Dubai was booming. This is when you know the Burj Khalifa was built, this is when, you know, we really saw that amazing transformation to where where the UAE is today. And it was really a lot of energy was then and so it was and so we went around the region setting up, setting up a lot of the kind of now largest financial institutions are being involved in the mergers and acquisitions or digitization of those. And so I spent time in Kuwait, Jordan, Tunisia, Algeria, I worked on banks that were domiciled or operating in Syria and Iraq. This was obviously pre 2011. And so it was a different landscape at that time. But really, really exciting time to be there.

Michael Waitze 3:40
Was that your first exposure to the Middle East at scale? I mean, obviously, you’ve done some you did you did your Islamic studies when you were in Germany. But was that your first time on the ground there? And I guess my question is coming from New Mexico and Colorado. Did it change the way you thought about the Middle East if you know what I mean?

Ben Harburg 3:58
It wasn’t my first time when… So I had been. We had the tradition in my family that when you turn 13, you got to go anywhere you wanted in the world, and my parents would would let you choose. And my brother and sister both chose Disneyland, respectively. And I chose Egypt. So I went to Cairo for a couple of weeks, or we did went to Egypt for a couple of weeks when I was 13. That was the only real exposure I’d had. But I grew up as an expat actually a lot of my life. So I spent about five years in Europe as a kid as well. So living two years in southern Spain and three years in Switzerland. And so I certainly had a quite pretty global perspective. But it was yeah, it was really the first time you know, touching down I remember the heat and touching down in Dubai in 2007. I think it was kind of my early spring, early summer, or late spring early summer. Was was my first real time on the ground.

Michael Waitze 4:51
I remember the first time I flew into Dubai as well. It was much later I think it was 2012 or 2013. And as you said the landscape had definitely changed both physically and metaphorically, right. But I do remember, just the surreal pneus, if that’s a word of flying in, and just the desert, I had never been in the Middle East before. My parents didn’t have the same tradition, we had other 13 year old traditions, but not that one. And it was just fascinating for me. And because I’m really into landscapes and into Maps, I think as soon as I landed and hooked up to the internet, I came across all of these photos of the development of Dubai, it was really interested in it. And obviously, if you go back 2030 years, and just look at what that area looked like, there was nothing there except that Toyota building, if I remember correctly, and then just all this stuff started building around it right in 2007 was a watershed, but a very interesting time to be there. I want to back up a little bit, I do want to come back to the GCC to the UAE because I think there’s a lot of interesting stuff going on there. But I want to talk about China first. You spent a lot of time, and you spent a lot of time, obviously in the commodities markets and in the public equity markets. But I want them to kind of make this distinction between all of the experience you had. And now moving that into the private markets, if you don’t mind, particularly in China, if that makes sense. Like what are the parallels there.

Ben Harburg 6:14
Actually, again, the experience that I accrued, starting in 2007, and in through the commodities experience, where we were building a global commodities trading company anchored out of Singapore in that instance, but with offices in Indonesia, Philippines, Japan, Korea, India, Taiwan, several offices, an office in Beijing, Guangzhou, Shanghai, and then offices up and down kind of the coast of, of East Africa, from from Johannesburg, and to places like Mozambique, and even into Madagascar. So I had this kind of very global experience. And that has really defined a lot of what I’ve done in the private markets here in China, because we’ve built a firm that is really oriented towards helping Chinese companies to go global. And also exporting the experiences that we learn, and the business models and best practices and technologies that we we kind of call from China into those markets. And it’s certainly that emerging market, zest, but also experience is what has driven us now to become one of the most active funds investing in private emerging markets across those geographies. And it’s become a massive angle for our Chinese portfolio companies as they look to expand to those markets.

Michael Waitze 7:35
I feel like we live in such interesting times, right? And I feel like in my investment experience, and in yours as well, we’ve lived through a few inflection points. And if you go back and look at so my first time in China was the beginning of 1991, that was actually in Japan. And for Golden Week, we took a two and a half to three week vacation and kind of went all over China. But back then, and even forward, like 15 years, you saw China basically looking at the rest of the world, and trying to take some of the things from the rest of the world and bring them into China, that bid has definitely flipped, right. And this, I’m really curious what it’s like for someone who sits in China to be able to look at the rest of the world and see the innovation that’s happening in China in the private markets, right with this massive domestic market. And try to address those things and then take those companies in China out to the rest of the world. There’s a very long conversation I have here, I don’t necessarily want to talk about just about listings, the listings and sort of the political implications there. Because we could do that forever. But just the logistics of taking what you’ve learned and what the company has learned in China and the innovations there, and then moving them out to the rest of the world.

Ben Harburg 8:41
It’s the way I kind of like to describe it as there’s this innovation pendulum, which swings back and forth across the world, really, but I always think of it as kind of a US China context, just because those are the worlds that I exist in, which is, you know, you know, centuries ago and 1000s of years ago, even China was very much an innovation leader. You know, let’s let’s use an example like the inventor of gunpowder. And then, you know, you build on top of that. So China admits the gunpowder. Then the Europeans kind of invent in that the blunderbuss, which is like this really inefficient one off, you know, gun that is expensive and hard to mass produce. And then the Americans build on top of that, you know, the Colt 45. And so you get this kind of commercialization, but built off of someone’s original innovation, or kind of spark. And then we’ve seen it go in the other direction, where, you know, maybe the US pioneered or had a lot of the early research in something like drones, but it was then the Chinese recently who built on top of that and mass produced in a company like DGI, which is now probably the consumer facing global leader in drones. But where that pendulum is swinging today, I believe we’ve had this thesis now for five or six years was that it’s swinging to where China will again be an innovation leader, which is driven by a whole realm of both kind of organic and inorganic forces. But I would say definitive directly to the China is a global leader when it comes to mobile first, financial services products. It is a global leader in innovation leader when it comes to mobile first entertainment, and kind of social ecosystems be that kind of gaming, live streaming. It is a global leader in a lot of the new forms of commerce, right be that, again, community based e commerce of social base e commerce. So it’s it’s China today that I think has now become an innovation leader. And it’s Chinese models that I believe today are far more applicable to particularly the rest of emerging markets. And in many ways now, we are actually extending beyond that into the more mature markets. So

Michael Waitze 10:39
one of the watershed events for me and you it’s a great segue, right was when Alibaba bought Lazada. And I’ll tell you what I’m thinking and you tell me what you think about this as well, right? So Alibaba, obviously an incredible innovator across the board, right. And it’s not just the E commerce side of that business that people know, right? The whole Taobao, part of that business is completely different. Most people don’t know about it. But when they came in, and they bought Alibaba for an initial billion dollars, it was, I think, at least in my mind, the first time China looked over to this side and went, Wait a second. There’s a whole bunch of possibilities happening in Southeast Asia. And we think we can take what we’ve learned here and implement them there. But you’re there, right? So I’m in Southeast Asia. So I see it from my perspective, I’m wondering what your perspective is not just on that, but on the follow on from that as well.

Ben Harburg 11:27
So Alibaba, certainly, at least very publicly have been a leader in kind of going global, but they’ve used a very different strategy than we pursue, or that we would, we would recommend, so they have become, or they were for a period kind of very globally acquisitive, they bought Lazada. In Southeast Asia, they bought a company in, in Latin America, and the payment space, they bought trend deal in Turkey, they bought a similar ecommerce leader in Pakistan, and really, you know, attempted to kind of take a local market leader and sort of infuse it with the Chinese playbook, or, but but to be honest, that doesn’t work, I don’t think and I think that they’ve had actually a really mixed bag of results across those acquisitions. Because the problem is, once you kind of get past the first layer of Alibaba management, the next rung that’s actually responsible for long term implementation struggles with some of that localization efforts. And I’m, and really struggles to bring the Chinese principles into those specific companies. So it’s more our view that you should be investing in local entrepreneurs who have that proven execution capability, who can learn the bits and pieces from China that are actually applicable to their market, but in a highly localized environment. And that often looks very different than what we see in China, where you have immediate ubiquitous mobile payment and have very cheap last mile logistics and all kinds of other efficiencies that we don’t see elsewhere. So it’s, it’s different, we would recommend and predictive works is very different than what Alibaba did.

Michael Waitze 13:03
I agree. And I’m on record, you can go back and listen, when that acquisition took place. And since then, I use it as an example of a very bad acquisition, bad for investors, because they lost a ton of money, and also bad for the for Lazada. Bad for Alibaba, anyway. But how does that knowledge? How does that knowledge transfer take place? Right? So if I’m in Southeast Asia, or if I’m in the Middle East, and I want to look to China to figure out what I can learn from them, but then localize it? How do I go about doing that? And I want to dig a little bit deeper as well on localization, right? Because it’s a little bit of a pet peeve of mine. Because I don’t think most people I know you do. Right? So I’m not suggesting you don’t, but I don’t think most people understand it. I always say like, it’s not just changing the font in the language. Anyway, let’s start with how do people learn? Or what can they take from China and bring into these markets? And how do they know they’re right? You know what I mean?

Ben Harburg 13:52
Sure. So the way that we often think about it is China’s kind of the benchmark, but then the Chinese model has to be highly iterated upon for different operating conditions. And to us that that kind of sandbox, where that process of iterating on the Chinese model is happening is really Southeast Asia, because as you said, it was the first and most immediate point of entry for many of these Chinese companies. And so you, you have in Southeast Asia companies like grab and go Jek, who I would say have become kind of amalgamations of a lot of different models in China. So grab to me looks more like a Matewan DD, you know, kind of hybrid and it certainly than it does an Uber Uber, right. It looks nothing like an Uber, right. And they wouldn’t tell you that that’s their Northstar. But but it also doesn’t look like Matewan it doesn’t look like Didi on a standalone basis. So I think you’ve got to have so for us the laboratory is Southeast Asia. And then we deploy those learnings into our markets. So Matewan is the is the bank smark grab as the as the iteration. And then the downstream deployment is someone like Kareem, in the Middle East who are trying to do a lot of the similar things to what grab is working within the kind of local competitive environment and consumer behavior constraints.

Michael Waitze 15:15
So China had a couple of edges. And again, I’m curious about your opinion on this. As you know, I’ve been in Asia for 30 years, right. So I’d like to feel like I’m familiar with what’s happening in this region. And I’ve traveled in most of the countries that you mentioned, except for the ones in Africa to be fair, I’d like to, but I just haven’t had the chance to. But there’s also a history right of China, and Chinese people living in Malaysia, Indonesia, Vietnam, the Philippines, and Thailand. Right. So if you look at some of the biggest companies, I’ll use Thailand, as an example, the CPE group, the central group, a lot of the groups here are run by Chinese immigrants that have been here for three or four generations. So for China to invest in Thailand, it seemed like a natural thing for them to do and a natural place for them to look, for sure. The Japanese have been the largest FDI foreign direct investors in Thailand for the past 100 years. But the Chinese are catching up quickly. They’re doing that everywhere. But I want to dig deeper on this localization aspect, right? How do you look at that from an investment perspective? So now put on your investor hat and just say, I want to look at companies in this region, we’ll get to the Middle East in a second. And then say, they’re looking at this, you already use grab as one example. But are there other examples that you see that are maybe more recent, if you know what I mean? So earlier stage investments that you’ve made, where you can point out that they’ve looked at China, and then use the laboratory of Southeast Asia to build

Ben Harburg 16:37
Oh, I mean, it’s, it’s everywhere I go. So So for instance, there are a lot of companies raising capital right now in Southeast Asia, in that kind of community based e commerce model where, where, you know, like a local mom sells to other moms, particularly in rural areas. So in Indonesia, you’ve got companies like chili, belly, and super, and others. And this is a model that actually we were one of the first investors in a company here in China that that to some degree pioneered this model built by a former Matewan kind of early employee, doing this exact thing. And this is now seen across the planet. We recently invested in a company in Brazil called Foveaux. Doing this, there’s another one called Atlantis, there’s another one called facili. So there’s there’s one and there’s one called Bri more in, in Egypt. So this model has gone global, but very much started here. There obviously are plenty of companies that are also replicating kind of the pin Duo Duo. social, social ecommerce, I call that first one community based e commerce they don’t want to be social commerce. Likewise, in Southeast Asia, obviously, there’s plenty of companies trying to replicate Mombasa, right. I mean, you can literally just go model by model trucking, consumer lending, anything consumer facing on the on the E commerce side. And there there are 10 replicas in Southeast Asia trying to do what what what was kind of built here in China?

Michael Waitze 18:03
And do you see the same I look at John ping on right, and look what they’ve done in the insurance space. And I see the replicas over here in Southeast Asia as well, you know, I’ve got a large Asia InsurTech podcast. So we see a lot of that stuff happening as well. We move to the back to the Middle East. This is something that’s so interesting to me, again, just another place. And I feel like, again, I want to back up for a second, do you feel like as an expat child, this is different, right? That you have an advantage because you have this international experience. So you look at the world in a way that may be more holistic than people that haven’t moved around a lot, in other words, that your mind is open, which is really important, I think, from an investment perspective. So you can look at different regions and say, okay, different but not scary. I can go in there, and I can figure out what’s happening, particularly if the models look familiar to me. Does that make sense?

Ben Harburg 18:54
Absolutely. I mean, we recently did an investment that was announced about a month ago in Iraq. This was the largest venture capital funding round in the history of Iraq. And I think most people would think I’m crazy, but you know, we’re building we’re building the Matewan of Iraq. So it’s pretty makes a lot of sense. To me. It’s a mate. It’s the Go Jek grab of a rock, right? It does ride hailing food delivery services, e services platform. We know that model works, you know, it works across the world in all kinds of challenging conditions. The risk return profile was great. So I don’t know how many investors would have gone in with us in that kind of structure.

Michael Waitze 19:29
Well, what’s the I mean, I’m looking it up right now. Right? But Iraq has 40 million people in it. Right? very lucrative

Ben Harburg 19:35
market. It’s an affluent market. People are very well educated. It faces some fragmentation issues. But overall, it’s a it’s a really exciting market. We’re also one of the most active investors in Pakistan, which I think up until, you know, just a few years ago, most Americans wouldn’t have touched with a 10 foot pole.

Michael Waitze 19:51
No, I’ve been trying to build a show in Pakistan. So I get it, but that’s what I mean, right. Like I think that part of your advantage Besides, you know, being in the market every day, it’s just that you have this international perspective and international experience. I want to talk about the Middle East, right. So you go back to the founding of the UAE and what was it December of 1971, or something like that. Right. So it’s been around for, what does that make it? 51, almost 52 years now, one of the first things they did, though, was they they set up the Abu Dhabi Investment Authority, which even back then was weird, right? A sovereign wealth fund that didn’t invest in gold or invest in cash. Yeah. So how do you look at them today? And maybe the greater GCC, right, as an investment opportunity, both inward and outward, if that makes sense?

Ben Harburg 20:41
Yeah, so I mean, as we, as we came out of China, and looked at other emerging market opportunities are what we actually use the term emerging technology markets, because I don’t think anyone driving down the road and Dubai looks at Dubai as an emerging market. But by my standards, it’s an emerging technology market, because historically had very low penetration levels and things like mobile payments, or E commerce, a lot of those core metrics we’re looking for, and in more advanced technology, use markets. But it’s a market that, you know, as a whole is what we view as a kind of a hidden gem. Right? It’s one that, you know, the statistics that we often like to say that was was told to us by a rock kind of a, I think it was actually a Chinese live streaming company a couple years ago was that 50,000 users in the Middle East are worth a million users in Indonesia,

Michael Waitze 21:29
which is definitely per capita, so different, but also charging people to capita, some

Ben Harburg 21:33
of the highest art pros in the world, some of the highest time, amount of time spend in the world on key social platforms like Facebook, Twitter, and others. So huge gaming consumption, huge overall consumption. So really compelling market. So those fundamentals are already there. And and they already make it compelling. But what what was added to that on your point around ADIA was that the local sovereign ecosystems led by the UAE have done a tremendous job of kind of in organically, but very sustainably, building a long term venture and entrepreneurial ecosystem by providing a lot of the key infrastructure to enable businesses to very easily set up operations locally to get registered to attract capital, to attract talent. And so today, we’re seeing companies that are addressing all kinds of different emerging markets that are domiciled themselves in Abu Dhabi, because it’s such a wonderful place to be based.

Michael Waitze 22:34
Yeah, I mean, do you want to talk at all about the DIFC as well, I think there’s a really important distinction here to make around company formation and how easy it is to form companies, the tax authorities that are there that encourage people to build companies from scratch, you operate there, maybe you can talk in a little bit more detail about why that’s so important.

Ben Harburg 22:54
Yeah, I mean, it. So really just for, you know, for ease of operation sake, and efficiency, these, you know, these founders have no bandwidth to spend a lot of time worrying about domicile and registration. And I can tell you, having dealt with companies, for instance, that are domiciled in Europe, and I won’t name names of the domiciles. But where you literally want to get something passed, every investor has to do a wet ink signature that is witnessed, physically, in this case, zoomed by a lawyer to get you know, for them to be able to take on new funding rounds, even if you own you know, $1 worth of shares in the company and things like that. It’s, it’s it’s incredibly inefficient. So it’s so much easier and faster for these folks who set up domicile in the UAE. And then you know, the UAE is regarded as a very secure and stable environment. And therefore they’re, it’s easier for them to attract capital. Because when an investor sees a company that’s domiciled in, say, a more challenging North African country relative to something in Dubai, it just feels the UAE, it feels that much more clean and transparent and safe to be investing capital.

Michael Waitze 23:59
Yeah, and again, you know, this better than I do, but I feel like the Emirates since they were founded back in 1971 have been super duper progressive, but also very forward thinking, in other words, not so concerned with what today is but more concerned with what tomorrow is going to be. And if I if my story is correct, they spent some time actually going to Singapore to try to figure out how do we take, you know, how did Singapore change from being essentially a fishing village just south of Malaysia into a global economic center, and try to then take back some of those best practices there. I want to switch gears a little bit and move to Africa, because you also operate there and say, again, if my if my memory serves me correctly, Rwanda and Burundi two countries that most people either haven’t heard of, or have only heard of in like the worst possible circumstances, have also done the same thing. Do I have those countries right by going to the UAE and try to figure out how do we make these two small kingdoms or countries? The financial center of Africa,

Ben Harburg 25:01
Rwanda, certainly. And I’ve met some of them. And they’ve they’ve created a program that’s very much in the image of what Singapore has done sending their best and brightest to universities and, you know, having a kind of reciprocal programs at the Harvard Kennedy School and elsewhere, right, developing a really strong bureaucracy and then providing incentives. And so it is it is a place. I mean, we certainly know of companies there have looked at companies there. I just can’t speak to Burundi. But But certainly, Rwanda has followed the Singapore model.

Michael Waitze 25:28
Yeah, it’s just really interesting. And getting back to your 13 year old birthday president. Egypt is actually becoming a really strong center of venture capital. It’s it’s right up there in the northeast, maybe it’s like Boston and Connecticut, I don’t know. But it’s in northeast Africa. And there’s a ton of money there as well, which then now investing kind of across the board in Nigeria, right in Kenya, just across the entire continent. Do you feel like Africa may be in the same status that Southeast Asia was in 10 years ago? I don’t like to pick a number. But you know what I mean, right, where the growth is just about to explode. Particularly. It’s an it’s an emerging market and a tech emerging market at the same time now.

Ben Harburg 26:13
Yeah, we were one of the most active investors in Egypt. I think we have 10 portfolio companies there today, it’s a tremendous mix of really strong entrepreneurial talents coupled with a very an ecosystem, which is full of pain points, right of financial pain points, consumer pain points, and therefore has a lot of room to grow. And with a government that’s actually been quite supportive, on a regulatory basis, and financially of developing a technology ecosystem doesn’t get enough credit for that. So it’s one that we have been heavily focused on for the last few years. Nigeria, As for us, the other big market in Africa, where we focus, but what’s interesting, we’re actually starting to see more capital kind of coming from Nigeria, or from VCs, for instance, that raise money to invest in West or Sub Saharan Africa, towards Egypt as well, because it’s just seems to be the overwhelming the compelling market, but I you know, today Nigeria still kind of produce more multibillion dollar companies than Egypt. In terms of where it sits on the spectrum, you know, that that whole region is interesting. The Middle East, for instance, I say, what actually had a head start over Southeast Asia in its evolution. So sure, the Middle East actually had some, some significant technology, exit and exits in the early 2000s. Well, ahead of Singapore. I mean, I was, I was asked by Rocket Internet to be the first managing director for Southeast Asia in 2011. So I would have been the founder of Lazada. Taking them up on that offer.

Michael Waitze 27:40
I like how you put that in quotes, by the way, the founder, you can say definitively because you’re

Ben Harburg 27:43
not, you know, you’re guaranteed founder, let’s say or to some degree. It’s kind of pretest determined, but but but I was also offered that same position in the Middle East back, I think, in 2008, or 2009. So just to give you a kind of a timescale, that’s the Middle East had exits, like Mach two being sold to Yahoo. Yeah, yeah, mid seperti being sold to delivery hero, far earlier than then you’re starting to see these companies like grab and GoJek rise up, which I guess came in, you know, kind of what was it? 2013 14? That kind of that kind of range? Yes. So actually, it had a head start. And if anything, Southeast Asia has caught up and surpassed, other markets, other emerging markets, other than maybe India in terms of its ability to attract capital, and grow really valuable businesses. But Africa is, is hot on his tail now. And you’re seeing huge global blue chip appetite for Africa. Literally, that’s emerged just in the last six months. I mean, you know, in the last six months, we’ve seen now, Sequoia doing deals and Tiger doing deals and Dragonair and Silverlake and others that, you know, six months ago, I wouldn’t have told you we’d be touching Africa.

Michael Waitze 28:50
It’s again, for those of us that have lived in emerging markets for most of their lives. It’s not a big surprise. It’s to me Africa looks like the last emerging market and emerging technology market frontier, I don’t I’m not familiar with what’s happening in Latin America, per se, maybe you can talk about that a little bit as well and in South America, but within sort of the five to six hour flight of where I live, where 5 billion people live, Africa just seems to be a massive opportunity. And what is it 1.3 billion people 51 states kind of thing or 51 countries, it’s huge. Anyway, go ahead.

Ben Harburg 29:24
And as I mean, Latin America is mean. So today, I would say the two emerging market leaders are India, in South America, South America, obviously, because of the proximity to Silicon Valley, because of the caliber of entrepreneurs. I mean, we’re investing in companies there where the founder is a repeat founder who’s built a multi billion dollar business previously and kind of as a Stanford MBA, super polished, they know how to raise capital, they know how to put together a team. So if anything that’s probably other than India the most, the most compelling market for us just in terms of the volume and the scale, but but massively expensive as a result, and so I’m so yes, I would say still the that kind of bleeding edge or that where the remaining value sits is probably in pockets like the Middle East and Africa and maybe a bit in Southeast Asia, which itself has gotten quite expensive recently.

Michael Waitze 30:15
It has in the 10 years or almost 11 years that I’ve lived here, I’ve just seen massive amounts of changes. I wish at some level, I could get to Africa, we already talked about that. I don’t want to take up much more of your time. I really appreciate it. But I just want to ask you and I was thinking about this before we started recording because I was also in the public markets, I find the private markets a lot more fun. And I’m just curious what you think what’s more fun for you the listener the unlisted?

Ben Harburg 30:39
Well, I mean, it like the week we’ve just had in China, the kind of roller coaster we went through over the last seven or eight days, it’s been hard, you know, you’d say being in the private markets is a little bit more fun, because at least you could sleep at night.

Michael Waitze 30:53
Yeah, fair enough.

Ben Harburg 30:53
But at the end of the day, you’re still recognizing that you’re in illiquid positions that are in A, what appeared to be a declining market. And therefore, you know, you’re, you know, you’re cheating yourself, if you think somehow you’re buffered from all of this. And I do think that there has to be a correction. You know, even in the market like Africa to go back there. We do see a lot of companies that we as funds that are bedded in the market pass on for all kinds of structural and competitive reasons. But we see global investors who have no physical footprint, the market investing at very high valuations. And so there’s all kind of a tourist we call kind of a tourist VC dynamic, very much underway in a lot of these markets. And that’s inflating prices, and, and offsetting expectations, which will, ultimately has to lead to some kind of a correction. And, and therefore, you know, we all can’t laugh at it, because it will affect all of us, even those of us that are investing in the more stable businesses. So, you know, I would say that, you know, it’s, it’s, we have now a very large public portfolio as well, just because a lot of our companies have gone public. And so we have to kind of become become hybrid traders. But I still think that the opportunities in privates are really compelling for us. And tip 10 enable you to get that kind of 100x type growth. You’re only going to do that obviously the privates.

Michael Waitze 32:13
Awesome. Okay. Ben Harburg, a managing partner at MSA Capital. Thank you so much for coming on and joining us today. I really appreciate it. That was awesome.

Ben Harburg 32:21
Thanks for having me.


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