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While Africa’s venture capital (VC) sector remains small, there might be something to smile about for tech startups that operate on the continent.
More than 20 new VC funds that aim to invest in African tech startups were launched this year. The total capital that will be available to startups from these funds runs into hundreds of millions of dollars.
The new funds range from a €1-billion Africa fund launched by the German government in June, to Omidyar Network‘s new $300-million evergreen venture fund that will back impact fintech startups.
African tech startups will be able to access hundreds of millions of dollars from over 20 new funds launched in 2019
The full list of funds aimed at African startups from all regions (see below this for region-specific funds), includes:
- A new $23-million fund launched in September by Accion Venture Lab, the seed investment initiative of US-based non-profit Accion, aimed at fintech startups that focus on financial inclusion (see this story).
- A $40-million fund launched in August by Australia-based global impact firm Palladium to invest in agribusiness value chains and off-grid clean energy ventures in Ghana, Kenya and Nigeria (see this story).
- A €1-billion Africa fund launched by the German government in June. The fund will support African startups and small businesses, as well as German and European companies. It’s not yet clear when the fund will make its first investments or which startup verticals it will target (see this story).
- Berlin-based company builder Ampion Ventures announced in March that it’s looking to provide African tech startups with “up to six-digit” funding (in dollars) (see this story).
- In March, philanthropic investment firm Omidyar Network announced it had has spun out its financial inclusion initiative unit to launch Flourish, a $300-million evergreen venture fund that will back impact fintech startups (see this story).
- French impact investment group Investisseurs & Partenaires (I&P) says its new fund is on track to raise between €80-million and €90-million after it made a second closing of €25-million in February (see this story).
- Ingressive Capital, a $5-million venture fund focused on early-stage African startups, announced in February that it is looking to invest tickets sizes of up to $100 000 in tech startups from Sub-Saharan Africa, with a possibility of making $250 000 in follow-on investments (see this story).
- In January, Silicon Valley based venture capital (VC) fund Partech announced that it had completed a raise for its Africa Fund, with the fund closing at €125-million, more than double the size of its first closing a year ago at €57-million ($70-million). It claims it has raised the largest VC fund dedicated to tech startups in Africa (see this story as well as this one on the deals it made in 2019).
- Emerging markets startup competition Seedstars in April announced that it would launch a $100-million fund to invest in African startups in collaboration with Paris based First Growth Ventures. The fund will make early-stage minority investments from $250 000 to $5-million in the most promising and innovative ventures across sectors and countries. While the fund was expected to make its first investments by the end of this 2019, no announcement had been made as of time of publication (see this story and this Q&A).
Those new funds aimed at North Africa include:
- New York based venture capital firm Modus Capital in November launched a $75-million Middle East and North Africa (MENA) focused fund. Through an incubation programme, the fund will make investments of $50 000 to $250 000 and also invest Series-A rounds of up to $1-million (see this story).
- Dubai-based early-stage venture capital (VC) firm BECO Capital announced in October that it had closed a capital raise for a $100-million MENA focused tech startup fund, BECO Fund II (see this story).
- In July The World Bank announced that it plans to invest $75-million to support Tunisian startups and small businesses. This includes the provision of equity and quasi equity financing through both the Anava Fund of Funds and InnovaTech Fund to invest in 280 innovative startups and small businesses (see this story).
- In April The World Bank, announced that as part of a $200-million project that aims to support small businesses and job creation for women and youth in Egypt, will invest $50-million to help develop an early-stage investment network in the country (see this story).
- Between 150 to 200 startups from the MENA region are set to benefit from millions of dollars in funding, from 500 Startups’ $33-million fund targeting the region, following a March closing (see this story).
Those aimed at West Africa include:
- An agreement signed by German investment firm GreenTech Capital Partners and the Senegalese government will see entrepreneurs in the country benefit from investments of between €10 000 to €500 000 (see this story).
- Benin Business Angels Network (BBAN), which launched in April. In May the association announced that it was looking to invest in three to five Beninese tech startups this year — with the first deal to be concluded at the end of May (see this story).
- Dakar Network Angels (DNA), which launched in April, aims to make four investments each year in francophone Africa, with investment tickets of between $20 000 and $100 000, the network’s founder Marième Diop revealed at the time (see this story).
Those aimed at Southern Africa are:
- A US business duo in October launched Enygma Ventures, a R100-million venture capital (VC) fund which will invest up R2-million in women-led startups from the Southern African Development Community (SADC) (see this story).
- The SA SME Fund and the Department of Science and Technology’s Technology Innovation Agency (TIA) in September committed to invest R236-million together in two news funds — R83.5-million in a new biotech fund and R152.5-million in a university technology fund. This, while TIA agreed to commit an additional R1.5-million to hardware technology incubator Savant‘s venture fund (see this story).
- Durban based venture capital (VC) company Kingson Capital in September announced that it had raised an additional amount in capital from US investors, to bring its $30-million (R400-million) Kingson Fund Two announced earlier this year, to $100-million (over R1.4-billion) (see this story).
- South Africa is one of the markets in which British education company Pearson said it plans to explore opportunities, through its $50-million Pearson Ventures fund which was launched in April (see this story).
- In February, Econet Wireless founder Strive Masiyiwa announced that he will launch a $100-million revolving fund for young Zimbabwean rural entrepreneurs and rural-focused ventures (see this story).
- In January, Silicon Valley based SA entrepreneur Vinny Lingham revealed that he is partnering with an investment house in South Africa in a new R500-million VC fund, Lion Pride Agility VCC Fund, which has already identified 15 investments. The new fund, which concluded three deals this year, is in the form of a registered VC company under the SA Revenue Services’s (Sars) Section 12J (see this story, as well as this one and this one).
A few more are planned for launch, namely:
- A $50-million to $100-million fintech fund that the Central Bank of Egypt (CBE) is reportedly planning to launch early next year (see this story).
- The African Business Angels Network (ABAN) and AfriLabs, a network for technology hubs and innovation centres, have launched Catalyst, a co-investment fund that will offer matching funding to investments made by qualifying angel investors in African growth-stage companies. The two organisations said in September that they are currently raising funds from various institutional partners (see this story).
- SA’s first angel fund focused entirely on women-owned technology businesses, Dazzle Angels, is edging closer to announcing its first deal (see this story). In June, Alexandra Fraser, one of the fund’s four founding members, said the fund had reviewed about 30 funding applications from women entrepreneurs since it announced its formation in August last year (see this story). The fund has yet to announce its first investment.
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