Africa Tomorrow – Decoding Early-stage Investments [Video]
Once upon a time, there was Africa. Now upon this time, there is an Africa with a brighter future. But, what will that “tomorrow” look like?
Fast-rewind to the last decade, there wasn’t substantial interest in putting money into tech startups building from this continent. Presently, however, investors from across the world are no longer shy of backing African tech companies—surprisingly even at their earliest stages.
A long way from what it was a couple of years ago, investment into African tech startups has now taken new dimensions. Unlike then when securing a million-dollar Series A seemed the prerogative of a select few South African startups, for instance, there is now an array of options for young tech firms to choose from: micro VC funds, PE firms, angel networks, and a newer crop of investors known as syndicates.
The early-stage investment landscape of Africa has long been in sharp focus because of the importance of backing these companies when they are still relatively new in the markets/countries they operate. Before now, backing the startups at the pre-seed or seed stages was deemed no different from an unsystematic risk. The tides, having rapidly changed, currently sees even the recently founded ventures secure up to USD 500 K from both local and international funders.
Today, there is undoubtedly more interest in backing African tech startups, more so when it comes to creating a pipeline for the youngest in the fold to raise the capital they need to launch, grow and even expand. The average seed size is now about USD 1 Mn, according to Partech, while there is an apparent increase in the number of VC Funds dedicated to investing before the rooster crows. Through these developments, African startups now have access to more capital—though it could be better—to support their “potentially scalable” businesses.
With the recent shifts in perspective, where are early-stage African tech startup investments headed? How much have things changed over the past few years and how will these apparent shifts affect the future of its funding and building ecosystem? Since 2019 when the region’s venture capital influx glossed over USD 1 Bn in cumulative value, heads have turned more towards than away. Considering the current changes, what is the future of funding for the continent’s youngest innovation-driven companies?
Catch TD in our latest installation of Africa Tomorrow where the Chief Investment Officer of Greentec Capital, the co-founder of the Lagos Angel Network (LAN) and founding President of the African Business Angel Network (ABAN) joins WeeTracker to discuss how far the continent’s early VC cheques have come and where it seems the roads lead. In this episode, lots of layers are revealed pertaining how African startups are raising the funding stakes at their outsets.