Why should family offices look at investing in Africa?
In short, venture capital in Africa is booming. As Partech points out in its latest report on African Tech VC, disclosed equity rounds over $200k on the continent are up ~6.5x over the last 5 years. And while the total amount of funds deployed decreased to $1.43B in 2020 (as the COVID-19 pandemic made on-the-ground due diligence more difficult for international investors), the number of equity funding rounds increased by 44% implying a growing and healthy venture ecosystem with more investors, investing more often. Yet, many investors struggle to put money to work in Africa because they see the world through a Western lens.
To many, Venture capital is like Formula 1 racing. Venture capitalists provide high octane fuel in the form of cash as well as technical assistance and other resources.
All of which enable daring founders – who we worship like the F1 drivers of the 80s – to scale businesses at frightening speeds and win the races for market dominance. VCs like to back drivers that have been around the circuit before, and they themselves have fine-tuned their race strategies through previous market cycles.