02 Nov 2015
Making Higher Ed Accessible to Africans
Company has a mission to educate a million students over the next 30 yearsRe: William Keating (MBA 1993); Bill Heye (MBA 1992); Paresh Shah (MBA 1992); Michael Porter; William Sahlman; David Thomasby Jill RadskenTopics:
Photo by Ramadhan Khamis/GPA
Scott Royster (MBA 1992) believes higher education has the power to transform Africa if only its students have access to it.
“Statistics from around the world show that individuals who are able to obtain a university degree earn higher lifetime incomes that those who are not. That outcome leads to material wealth, but we believe it also leads to a powerful contribution to familial wealth, country wealth, and ultimately, wealth for the continent,” says Royster, cofounder of Maarifa Education, a pan-African education holding company.
Royster has been hard at work helping to achieve this mission since early 2012, and it’s been an experience he never expected as “a guy who spent the first 40 years of his life never thinking about anywhere outside the US.”
“I fell in love with this place (Kenya) within 48 hours of arriving,” he says, speaking from his office in Nairobi, where he now lives part time. ”I have now been to 10 countries in Africa in three years, and often times feel more comfortable here than I do in my other home, the USA.”
With the acquisition of two universities (Cavendish in Uganda and Zambia) and a significant investment in a third (KCA University in Kenya), Maarifa is ambitious and bold—both criteria that have framed Royster’s career from the start. His initial break with convention occurred after his first year in college, when he took a year off from Duke to work retail near his hometown, in Newton, Massachusetts.
“At 19, I helped open and manage the first Ralph Lauren Home shop in Filene’s. That forced me to engage with people on a new level and to convince them to spend $50 on a towel,” he says.
He ultimately finished Duke and moved to New York City in 1987 to work at Chemical Bank, first as an investment banker, then in venture capital. He loved the work, in particular the relationship between investors and management. It was that dynamic that propelled him to HBS three years later.
“HBS kicked my butt,” he recalls, recalling his experiences with professors Michael Porter, Jeffry Timmins, William Sahlman, David Thomas, and Jan Evans. “It was challenging, painful at times, and really satisfying. I knew I always loved business, but it gave me the toughness and confidence to know I could go out and perform at a higher level.”
At HBS, Royster also found his entrepreneurial spirit, starting Tribeca Designs, a company that made storage towers for compact discs, with section mates Bill Heye and Paresh Shah.
“We were the CD tower guys. We produced thousands of them, selling the first ones for $199 at City Schemes and Brookstone. Then everyone got in the game, and retail pricing fell like a rock,” he remembers.
Setting aside his dream of being his own boss, Royster instead went to work at Boston-based Capital Resource Partners, then the African-American private equity firm TSG Capital in Stamford, Connecticut. At TSG he was introduced to one of its portfolio companies, Radio One, which he joined as CFO in 1996.
“We took that company from six radio stations to 70 in five years, took it public in 1999, and raised a couple billion dollars of capital. Today, Radio One is the largest African-American broadcasting company in the United States,” he says. “That’s where I truly became the entrepreneur and executive I am today.”
The dream to run and build his own company nagged at Royster and, after a short stint in broadband, he started to develop the concept of an online university focused on the needs of African-American students.
“I partnered with a black college in Baltimore, raised venture capital, and built a team. But regulatory dynamics were complicated and, after three years of trying to make it happen, it never got off the ground,” he says.
Undeterred, Royster, who has three daughters, remained passionate about higher ed, especially for those underserved by more elite institutions.
“We are not building mini Harvards. We are focused on building, in some ways, universities that are the exact opposite of my great alma mater. We want to invest in good institutions and help make them great by making them accessible and affordable to as many people who have the desire to attend. Our mission is to educate a million Africans over the course of the next 30 years,” he says.
It was a January 2012 New York Times article about a stampede at the University of Johannesburg in South Africa that helped crystalize Royster’s vision for Maarifa. Five thousand students had shown up for the school’s 100 slots, and a woman was killed in the rushing of the gates.
“It was a horrible story, and I couldn’t help but take note of the supply-and-demand imbalance,” he recalls.
Two weeks later, Bill Keating (MBA 1993) introduced him to Bryce Fort, managing director at Emerging Capital Partners, a pan-African private equity firm. By the end of their lunch meeting, the pair had committed to research investing in African universities. Today, Maarifa, which translates as knowledge in Swahili and Arabic, has plans to invest in and/or acquire a dozen universities over the course of the next five years.
The days are long, and Royster spends them overseeing strategy and business development.
“I’m into this physically, emotionally, and spiritually,” he says. “What we’re doing hasn’t been done before in this part of the world, and it has the power to transform the continent.”
He points to other countries, such as Israel, South Korea, and Singapore, as role models for what he hopes to achieve.
“Across the countries in Africa, roughly 5 percent of the population has completed university. We want to be part of the catalyst of taking that to 20, 30, even 40 percent in a generation or two,” he says. “In almost every case around the world, it has been the private sector that’s been critical to transforming the educational ecosystem. If we can stabilize and grow our university partners, this can forever change the trajectory of this great continent.”
Class of MBA 1992, Section H