The growing number of startups securing major financial commitments sets the stage for an entirely new era of growth in the African venture capital industry. This is according to ecosystem builder, startup and entrepreneurs platform VC4A.
VC4A said in a statement yesterday that this was the most discussed topic during the sixth Africa Early Stage Investor Summit (AESIS) which was held last week in Cape Town. The event is an initiative of VC4A and the Africa Business Angel Network (ABAN).
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This year’s summit comprised three days of content and networking activities including new components such as a full-day Fund Manager Training workshop and curated speed-dating sessions between limited partners and general partners.
VC4A says 330 investors from over 110 organisations attended AESIS 2019
VC4A says the new events were both oversubscribed. In all, a total of 330 investors from 35 countries who were representing over 110 organisations attended the summit.
The first day of the summit also included the first ABAN annual general meeting as efforts continue to spur angel investing across the continent and to unlock resources for starting companies at their earliest stages of development.
A rapid series of panels, keynotes, fireside chats and round-tables held across the three-day summit highlighted a number of issues.
These include the growing interest from foreign investors — including an increasing number of Chinese investors — in startups on the continent, startup valuations becoming too high, entrepreneurs increasingly looking to international markets and the question of whether local entrepreneurs are indeed benefiting from the influx of funding.
The summit also featured the VC4A Showcase which saw 12 vetted Series-A companies from Algeria, Egypt, Nigeria and South Africa pitch their solutions to the summit’s attendees.
The showcase, VC4A says, helps build pipeline for some investors and create exists for others. It pointed out that several past Showcase ventures currently appear on the list of companies that have raised more than $1-million this year.
These it says include Joburg-based startup FlexClub which links investors and drivers to cars for ride-hailing services. The startup raised $1.2-million in March (see this story).
This while 2018 alumni Nawah Scientific and 2019 participant LifeBank, were recently announced the winners of the Jack Ma’s Africa Netpreneur Prize (see this story).
VC4A says to date, the venture showcase companies have raised more than $36-million.
VC4A says key takeaways from the summit include:
- Over $1-billion has been raised by African startups so far this year, with 83 deals exceeding $1-million.
- The number of women founders are on the rise at 18% in 2019, which VC4A founder and CEO Ben White says is more than in Silicon Valley.
- Africa’s startup 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 startups.
- 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.
Read more: Venture capitalist questions lack of women, role of foreign founders in Africa’s tech sector
Read more: Naspers Foundry calls on VC firms to help co-invest in SA tech startups
Featured image: VC4A founder and CEO Ben White on stage at the sixth Africa Early Stage Investor Summit (Facebook)
