Why Remote Technology Due Diligences can make or break your investments

Investing takes patience, expertise, foresight, and a little bit of luck. The lines between a successful and an unsuccessful investment are narrow, shifting, and may appear differently depending who is asking and answering the question.

Investors have traditionally focused on the core assets and liabilities that a company holds, but in 2021 this scope is no longer enough. The digital revolution has come to Africa, impacting every aspect of business generation and unlocking untold opportunity, and as such it has never been more vital that companies effectively use technology to reach these new markets.

It therefore speaks to wisdom that any investor looking to grow its portfolio will take into account the technology a company uses. In years gone by, this may have been a cursory look at the IT infrastructure, and a quick interview to the CTO (if they had one). In order to be successful in the current market, full of technological complexity as it is, more must be done.

For investors used to traditional Due Diligence processes, this provides a fundamental challenge — they tend to have a financial background which gives them expertise in identifying market opportunities and assessing business plans. They are usually not technology experts, and face barriers in effectively evaluating complex technology solutions.

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What is the value?

By better understanding their portfolio companies, investors can make better investing decisions. Given technology plays such a large part in determining the success or failure of modern companies, Technology Due Diligences provide value in two ways:

  • Confidence that you are investing in a company that has the technological infrastructure in place to support growth.
  • Practical recommendations in the due diligence report to make sure that your investment capital is put to effective and efficient use when it comes to technology.

What is a Technology Due Diligence?

Due Diligences must now grow to understand the fundamental impact that technology has upon the success of a company. This means it must answer questions such as::

  • If the company scales 5x, can the technology support that?
  • Where are the current pain points that limit the efficiency of operations?
  • Does the company have the right IT team to continue developing a successful solution?
  • Where can IT unlock greater growth?
  • Which part of the tech stack needs investment to improve?

We take a Deep Dive into what a Tech DD looks like in our next article, available here.

Remote first

In these days of global pandemics and volatile markets, performing a Due Diligence can be challenging. That’s why being able to run these Due Diligences remotely is vital — not only does it provide significant savings on travel expenses, it allows you to receive a detailed, high quality report that satisfies your needs as a diligent investor in a timely fashion.

If you are an investor looking to improve the quality of your investments, we recommend taking a long look into the technology your portfolio is using. The digital revolution is here — are you ready for it?

About Enable:

Enable was founded by the industry, for the industry, to provide Digital Technology Solutions for Emerging Market Ventures. Having developed years of understanding in how technology can both catalyse and block the growth of companies in emerging markets, Enable is able to combine this experience with the necessary technical skills and understanding of different software solutions running operations, finance, HR and more. If you are an investor looking to make more informed decisions, or a business looking to take your growth to the next level through the effective and focused use of technology, get in touch with us at info@enable.digital.

Photo by Bruce Mars & Marvin Meyer on Unsplash

Exploring the world of technology innovation in Emerging Markets — trends, insights and working practices across sectors & within Enable https://enable.digital/

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