Although some can paint a dark image of the African start -up ecosystem, it is actually overflowing with growth potential and alpha. Despite a recent global slowdown in capital flow, this emerging ecosystem offers a promising landscape to investors arranged to adopt a long -term perspective and to collaborate with local partners.
The opportunities come here from large unprecedented populations who are today indeed non -consumers of goods and services that they really need rather than simply wish – and anti -ragile entrepreneurs who build rescue and market creation innovations . These entrepreneurs exploit current economic opposite to their advantage, creating very resilient companies.
We note an increased formalization of the informal sector, where startups transform offline companies into traceable participants and connected to the digital economy – just as they extend the scope of digital services to poorly served rural and peri -urban areas. Active light models have been particularly effective. There remains a considerable opportunity to enter an additional value from the Fintech.
Moniepoint is an outside competition company in the financial technological space which continues to extend its market share and its service offers. Likewise, investment companies in the Ventures platform pave the way. Omnibiz has demonstrated growth and profitability thanks to an innovative approach to optimize supply chains and electronic commerce. Companies like Sunfi allow the transition to renewable energy sources for thousands. The integration of AI and automatic learning technology also unlocks the potential of the continent to improve efficiency.
These trends clearly indicate an ecosystem on the verge of significant growth, with a proven history of capital back to investors, mainly through secondary sales and strategic acquisitions. High -level recent outings, such as InstadeepA Tunisian AI startup and Quicket The acquisition of ticketmaster underlines this trend. These outings, as well as previous successes such as Back -up And WaveDemonstrate the potential of the African ecosystem as a lucrative investment destination. Although they are at its beginnings, these examples of complete and secondary outings highlight the high yield potential, even if a large part of the activity remains unregistered. Ventures platformFor example, has managed to return four of the six investment vintages since 2016 by supporting promising companies at the start of their journey and facilitating primary and secondary outings.
Contextualizing the African challenge
Africa has often been considered a risky investment destination in the grip of political instability and inconsistent regulatory frameworks. However, reality is more nuanced. On a longer time scale, African governments have shown increasing stability. Each regional continent and world market has its unique dynamic. Africa requires an investment approach to the patient, distinct from other continents, due to its underdeveloped infrastructure and its opaque markets. Some argue that many African markets are more based on permission than based on rules, which requires in -depth understanding of the local context, management of stakeholders and local partnerships. The less developed African capital markets make IPOs less viable, leaving strategic outings as the main liquidity option.
In the World West, the United States has abundant capital and a culture that accepts failure, which facilitates startups which can even be considered “fine-experience” or “vitamins” to prosper. In the United States, public procurement is also deeper, facilitating the opportunity for the IPO. On the other hand, the various markets of Africa and the less centralized regulatory environments present various challenges and opportunities. For example, despite the differences in the state, the more homogeneous market structure of India contrasts with the fragmented landscape of Africa.
Understanding these shades is crucial to navigating in complexities and unlocking the continent’s potential to succeed in investments in critical innovations “of critical pain” targeting mass market consumer. An approach that has worked at Ventures Platform consists in categorizing the markets in “large ocean markets”, where we are flexible to support high -level businesses which are at the top 3 and the “lake markets”, where we support the companies that have the potential to be number 1 and where cross -border expansion is more feasible.
History beyond figures
Investment in African technological startups offers more than financial returns; They stimulate innovation, social impact and market creation. For example, the Ventures platform fund that I launched in 2021 focuses on innovations creating markets that deal with non-consumption in Africa.
Our portfolio companies have created more than 4,264 direct and 20 650 indirect jobs, increasing economic opportunities and productivity. Companies like Sunfi have extended energy solutions specific to more than 36,000 users, reducing CO2 emissions of 2,766 metric tonnes. Companies such as FEZ delivery are sustainable pioneering logistics thanks to electric vehicle and emission reduction initiatives, while others like Lengo incorporate AI and automatic learning technology to unlock the potential of the continent to improve efficiency. »»
Beyond Fund I, previous investments like Fintech Piggyvest have facilitated financial inclusion for more than 5 million people who are inserted, contributing to a 13.5% increase in financial inclusion in Nigeria. Agritech Solutions as Thriveagric provided 140 million dollars in input funding to more than 300,000 small farmers, improving food security and sustainable agriculture. These success stories highlight the broader impact of venture capital investments in Africa, stimulating social and economic transformation.
Prospects: not an opportunity to take lightly
THE World Bank Projects according to which African savings will increase by 3.4% in 2024, compared to 2.6% in 2023 and reached 3.8% in 2025. This upward trend reflects the resilience and potential of the continent, reinforcing a promising trajectory for Investments in CR in Africa.
First, the growing number of local fund managers through the investment value chain ensures a constant flow of capital. Unlike only five years ago, when the follow -up capital strongly depended on foreign investors or programs like Y Combinator, there is now a robust local ecosystem with multiple growth funds.
Second, the quality of the founders and commercial ideas has improved considerably. Entrepreneurs build solutions adapted to local realities rather than reproducing foreign models. This change improves the potential for success and sustainability.
In addition, governments and regulators across Africa recognize the value of the start -up ecosystem, as evidenced by the adoption of various start -up invoices aimed at providing a more stimulating ecosystem or success of startup. This regulatory support is crucial for the growth of the ecosystem. Although its infancy, the African framework for the Continental Free Trade area (AFCFTA) will extend the start-up markets across Africa and facilitate trade and cross-border investment.
What to follow?
With its unique shade accepted, Africa presents the most exciting long -term investment opportunity in the world. Although exciting, the growing youth population is not an end in itself, but rather a starting point which requires a deliberate attempt to create a hard nose which can convert millions of non-consumers into consumers, which allows A potentially massive total addressable market. The challenges perceived of the continent are disguised opportunities. Committing to regulators and understanding local markets is essential for success.
We must move away from a story of charity while the future of African venture capital depends on the demonstration that it can generate substantial yields. This approach will help to increase the share of Africa in world venture capital, going beyond the impact narrative to present the profit potential of the continent. The investment community must also hold the responsible founders and prioritize governance to build a resilient ecosystem. Local capital participation is essential to support growth and attract more investment.
Investors should seize the opportunity to contribute to the emerging technological ecosystem of Africa, recognizing the immense potential for growth and impact. Travel requires patience and a long -term perspective, but the awards are substantial for those who dare to invest in the future of Africa.