Startups are currently the symbol of entrepreneurship in Africa. However, funding is an issue. Despite this context, international and local investors are increasingly interested in these emerging and very promising projects.
Investing in startup and early-stage businesses is on the rise globally, accounting for 67 percent of all venture capital (VC) funds in North America and increasing 19-fold in Europe.
Across Africa, start-up companies are attracting the interest of venture capital, private equity, social impact funds and angel investors who are looking for higher returns on invested capital.
The amount of capital invested in African startup businesses has increased significantly. According to the book « 101 Ways To Make Money in Africa » published by John-Paul et Harnet Bokrezion, total investment in African start-ups has reached at least $0.5 billion in 2015 and $ 1 billion in 2016. Other specialists expect $ 1 billion up to $ 1,5 billion on financing startups in Africa, by 2018.
According to a survey published in Disrupt Africa website, start-ups from South Africa, Nigeria, Egypt and Kenya are on top as investees, followed by Ghana and Morocco.
Francophone Africa too, becomes more and more attractive for investors. Five Francophone countries stand out: Senegal, Côte d’Ivoire, Rwanda, Tunisia and Morocco. They managed to get $ 37 million in 2016, or 10% of all funds granted to African start-ups.
As Africa’s young entrepreneurs continue to come up with brilliant business ideas that have the potential to significantly disrupt both new and established markets, it’s almost impossible for investors to ignore the lure of attractive investment returns.
There are now more than 200 investment organizations, firms and platforms that are focused on investing in early-stage African businesses.
Funding will help the startups to take off and then boost the main sectors of the African economy: finance, agribusiness, technology, health, industries, etc. In addition to their capacity to generate much wealth, they create new professions and jobs for Africa and the world. They also help Africa be more open to the world.