Cape Town, South Africa (ADV) – The recently held week’s two-day Africa Early Stage Investor Summit attracted over 300 active and aspiring investors representing Africa’s early stage investing ecosystem.
Organised by Venture Capital For Africa (VC4A) and African Business Angel Network (ABAN), the Summit celebrated its fifth year and attracted the highest ever number of early stage African investors from 35 different countries, and more specifically 25 African nations representing 110+ investor organizations to share expertise, experiences, and fostering collaborations to bolster the ecosystem of capital provision for African entrepreneurs.
VC4A is an ecosystem builder that leverages its infrastructure, network and expertise for the programs that contribute to Africa’s startup movement while ABAN is a Pan-African non-profit association. ABAN was founded in early 2015 to support the development of early-stage investor networks across the continent and to grow the cohort of early-stage investors excited about the opportunities in Africa.
Ben White, the CEO of VC4A mentioned the challenges confronting Africans.
“It was the largest and most successful summit we have run with over 60 speakers participating in 7 panels, 4 investor master classes, 3 keynotes, 2 roundtables and 1 fireside chat. It’s amazing to see this industry rise in Africa,” said White.
“The passion and commitment shown by speakers and participants alike to partner with entrepreneurs to unlock the continent’s opportunities demonstrates how much there is to still achieve and I have no doubt that this ecosystem will prosper.”
Added White, “This conversation succinctly captures the challenges venture capital faces in Africa and why we need to keep working to strengthen and support the entire African venture ecosystem.”
Keet van Zyl from Knife Capital also expressed concern on difficulties faced by Africans. “It is easy to invest money in Africa right now, but it is hard to make money in investing here. The key is to be exit centric – we only invest in entrepreneurs who are focusing on building sustainable businesses that can exit.”
ABAN president Tomi Davies presented a first ever scoping study by ABAN in partnership with infoDev / The World Bank Group on angel investing in Africa. He mentioned that the ABAN network has grown from 5 to 80 active networks and it is important to now have research that captures this emerging investor segment.
“It’s great to see so many connections being made. More importantly we are excited by the level of engagement. Now is the time to take an active role and to be part of the next great African success story. We invite all actors and stakeholders to join the conversation,” said van Dijk.
Babajide Sodipo, Regional Trade Adviser with the African Union (AU), announced a new partnership between the AU and ABAN formalizing their joint ambition in supporting entrepreneurs and SME’s across the continent.
Key takeaways from the two days included:
- Silicon Valley will not be replicated in Africa. Though there are lessons to be learned from the Valley, African VC faces unique constraints in scale, capital and exit opportunities. Rather than spend time ‘unicorn hunting,’ investors should push founders to build profitable, sustainable, and locally-adapted businesses.
- Collaboration is required to build a thriving industry. Investors must be activists in attracting more capital and resources into African markets, especially from larger corporates, growth equity investors and development finance institutions (DFIs). More collaboration is needed in designing instruments and financing structures tailored to African ventures.
- Human capital and diverse teams will be a key to success. In the coming decade, Africa will hold the majority of the global youth population, bringing a wealth of opportunity and innovation. Yet accessing strong talent and building diverse teams remains a stark challenge for most ventures.
Investors want to see more female and locally-led organizations with thoughtful human capital strategies.
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© Bur-csa – A.H – N.A / From our regional correspondent Mkhululi Chimoio – African Daily Voice (ADV)