All over the world, Africa included, investment serves as a crucial catalyst for short, medium, and long-term economic growth, enhancing productive capacities, restructuring, and creating employment to combat poverty. The diverse forms of investment, working synergistically, play a pivotal role in bolstering growth, enriching productivity, and fostering innovation.
This is evident in the average annual growth rate in the value of venture capital deals between 2017 and 2019. The number and value of VC deals reached an all-time high in 2019, with US$1.4 billion invested in 139 identified deals, with 98% of them being tech deals. The amount of venture capital channelled into African businesses in 2019 was practically double the amount raised in 2018. Over 90 African companies were recorded to have raised more than a million dollars each in 2019.
In 2020, approximately 319 deals and US$1.1 billion worth of publicly disclosed and non-disclosed funding deals were recorded, suggesting steady and resilient VC funding despite the COVID-19 pandemic.
Despite the milestones, according to the 2023 Africa Tech Venture Capital Report, African venture capital investments experienced a decline. “In 2023, with a total of $3.5 billion raised in 547 deals, African VC investments experienced a significant downturn with a 46% decline in total funding and, for the first time in 8 years of reporting, a 28% decline in deal count.
While in 2022 this region stood out against the global downturn, in 2023 the African tech sector saw a larger decline than the global trend despite a display of resilience on the debt side.” Despite the decline, some venture capital firms are contributing their quotas to the continent.
Partech Ventures
The global venture capital firm, Partech Ventures, has offices in Berlin, Paris, and San Francisco. The company makes investments in early-stage startups in the mobility, corporate software, and fintech industries.
It primarily seeks to aid in the creation of scalable solutions that address urgent issues in society and promote economic expansion. Some of its investments include TradeDepot, Nomba, Jumia Group (a Nigerian e-commerce site), and Yoco (a financial startup based in South Africa).
Techstars Accelerator
Globally, Techstars operates over 40 accelerators, including the Lagos location. Most African startups have been admitted at different times to Techstars Toronto, Techstars New York, and Techstars Barclays Accelerator. Techstars specializes in Fintech, Proptech, e-Commerce, MobilityTech, and TalentTech firms.
In 2023, ten African startups were accepted by Techstars Toronto, while twelve startups were accepted by ARM Labs Techstars Accelerator. Apart from the capital invested, the startups enjoy benefits and access to Techstars’ extensive network, which includes 20,000 investors, 7,000 mentors, corporate partners, and alumni. Some of its investment portfolio includes Vittas, Salad, Peppa.io, CDCare, and Sidebrief.
TLcom Capital LLP
With an emphasis on technological investments in Europe and Africa, the company was established in 1999. It offers funding and strategic advice to businesses in the early growth stages to help them expand more quickly.
The company has made investments in several African businesses, such as the Kenyan fintech company Onafriq, the Nigerian agritech startup Twiga Foods, Andela, Tarragon, Seamless HR, and Ilara Health startups.
EchoVC Partners
EchoVC Partners is a pro-women-led startup venture capital firm that unabashedly backs female-founded businesses throughout Africa. The company’s main objective is to invest in minorities that are underrepresented and neglected in the African startup space.
It targets early-stage, seed, and growth-stage startups with innovative concepts and viable business plans that use technology to benefit Africans. Echo VC invests in businesses that are pioneering noteworthy solutions, such as Lori, FinAccess, Cellulant, and Gro Intelligence.
Ingressive Capital
Ingressive Capital is a venture capital firm that helps African tech startups transcend from pre-seed to the seed stage and finally into unicorns. It also sorts out and invests in startups that have the potential to tackle significant problems in society. To help these businesses grow, they also provide them with partnerships, business development tools, and intellectual support.
Since its inception, the organization has made several notable startup investments in Nigeria, Ghana, Kenya, and Egypt, with an average investment size of $400,000. On its list are several well-known businesses, including Complete Farmer, Payday, Gwala, Mono, Oze, Grey, and Tizeti.
