Nigeria leads pack as investor interest in African startups peaks

Data from the newly published “2016 Venture Finance in Africa” research, which was conducted by VC4Africa, shows that the growing international and local angel investor interest in African startups is resulting in tangible investments, with Nigeria leading the pack with over 50 of such investments.

Countries such as Cameroon and Togo had between 25 and 50 of such investments, while others like Togo Chad, Niger, Madagascar and Mauritania received between 15 and 25, with many more having between 15 and below international investments in their startups.

Total invested capital more than doubled compared to 2015 data, from almost $27 million to $73 million secured by 224 ventures that took part in the survey, about 48 percent of them in total. The average amount invested per venture also increased from $200,000 last year to $326,000.

The VC4Africa portal is a living database connecting supply and demand, the information, network and capital required to see African entrepreneurs realize their potential and to emerge as Africa’s next great success story.

It aims to be the world’s leading social network for entrepreneurs and investors in Africa and has over 30,000 members in 159 countries, including more than 1000 investors.

The research shows top investment categories are related to the technology sectors, followed by agriculture, health, finance and energy.

It also reveals that ventures that participate in sector events, or join an incubator or accelerator, are twice as more effective in securing capital for their venture, and of the investor part of the VC4Africa community, 86 percent has invested in an African venture.

More than 4600 entrepreneurs in Africa present their companies on the platform, including early stage ventures that require investments of above $10 thousand but less than $2 million.

The VC4Africa ‘Venture Finance in Africa’ report captures the performance of early stage, high growth ventures from Africa and the activity of early stage investors, and the insights are broken down across five indicators: job creation, financial performance, investments, early-stage investor activity and ecosystem.

Ben White, its co-founder, explained that “operating as a founder or investor without quality information hinders your ability to make informed decisions, a critical challenge for those venturing in Africa. At VC4A we are working hard to address this and the members have come together to establish a basic index that starts to put real numbers behind Africa’s growth story.”

This is the third time VC4Africa has conducted the annual research and the 2016 release is based on data collected in 2015 from 462 ventures from 41 African countries and 140 Africa-focused investors from 25 countries around the world.

As the community continues to grow, it is expected the report will generates insights into what is happening across the larger startup space, considering that innovative ventures yield high social and environmental impact and are a key driver for Africa’s development.

YANGE IKYAA