To-date in 2019, over US$1-billion has been raised with 83 deals alone exceeding US$1-million.
The growing number of start-ups securing major financial commitments sets the stage for an entirely new era of growth in the African venture capital industry.
This is according to Venture Capital for Africa (VC4A) which, together with the African Business Angels Network (ABAN), recently hosted the sixth edition of the Africa Early Stage Investor Summit in Cape Town, South Africa.
Delegates agreed that Africa’s start-up ecosystem is maturing. To-date in 2019, over US$1-billion has been raised with 83 deals alone exceeding US$1-million, and with 18% of those companies co-founded by women.
“More women than in Silicon Valley,” as VC4A’s Ben White pointed out in his opening keynote.
Key topics discussed included growing interest from foreign investors (and an increasing number of Chinese investors), start-up valuations becoming too high, entrepreneurs increasingly looking to international markets and whether or not local entrepreneurs are really benefiting from the influx of funding.
Industry leaders challenged these topics while sharing insights and lessons learned from investing in the continent’s top businesses.
“… participants dove head-first into these and many more start-up ecosystem topics with African powerhouses like Pieter de Villiers, Eghosa Omoigui, Keet van Zyl, Rebecca Enonchong, Ido Sum, Lauren Cochran, Tomi Davies, Marième Diop, Johann Choux, Paul Cook, Yassine Oussaifi, Llew Claasen, Abu Bakr Cassim, Olivier Furdelle, Khaled Ismail, Ben White, David van Dijk and many others, leading the conversations,” reads an excerpt from a statement released by the organisers.
Key takeaways from the Summit include:
• The number of women (co-) founders are on the rise at 18% in 2019
• Africa’s start-up ecosystem, as of 2018, is on par with Southeast Asia’s of 2014, with major increase in early-stage investing expected
• Ecosystem actors need to stop looking to Silicon Valley and create own ecosystem model and path for growth.
• African start-ups create social impact but investing for profit remains leading driver for investor participation
• Fund managers and investors need to play the long game to reap any returns while there is a need for more fund managers to enter the industry
At the event ABAN announced its Catalyst initiative.
Rebecca Enonchong, female founder and treasurer of ABAN, explained that the initiative, in partnership with Afrilabs and funded by the AFDB, will stimulate angel investing across the continent by matching investments up to €60K.
Enonchong said: “This mechanism helps build layers in the ecosystem and creates more pipe-line for investors since angels will be able to invest in more businesses.”
According to organisers the event attracted 330 investors from 35 different countries representing over 110 investor organisations.
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