TECH INVESTMENT IN AFRICA – SHOW ME THE MONEY!

The US, Africa, and Europe are home to 84% of the investors active on the continent.

Some of the most recurrent questions and comments we receive when we publish information on investment in Africa - like our recent post on the most active investors - have to do with the provenance of the funds that are invested in start-ups on the continent. Some would want to be able to celebrate Africa’s ability to attract capital from all over the globe, while others are looking for arguments to fuel the debate on Africa’s ability to finance its own innovation, with the question of tech sovereignty in the background.

This post won’t tell you where the money is coming from: indeed, VCs very rarely share detailed information about who their LPs are, not that knowing an LPs’ name would always tell you for sure the ‘nationality’ of the money they’re investing. What we can do though - based on an analysis of the close to 2,000 $100k+ deals over 2021-2022 in our database - is give you an overview of where investors - excluding angels - are headquartered. And what do we learn?

In 2021-2022, out of the 1,400+ investors who made at least one $100k+ deal on the continent, 36% were HQ’ed in North America, 27% in Africa, followed by Europe (21%), Asia Pacific (8%), and the Middle East (7%). This geographical split was extremely consistent between 2021 and 2022, and there were only minor variations if we compare with 2020 ($500k+ deals only) and 2019 ($1m+ deals only). Where we see a difference though, is when it comes to the level of activity of these investors. Indeed, the more active they are (in number of deals), the more likely they are to be HQ’ed in Africa versus in the US or elsewhere: from only 24% Africa- vs. 39% US-HQ’ed (and 37% elsewhere) for the most ‘opportunistic’ of them (who did only 1 deal over 2 years) to a 29%/35%/36% split for those who did 2-4 deals, 40%/28%/32% (5-9 deals) and 45%/19%/36% (10-19 deals). However, this is not true of those ‘super investors’ who did 20+ deals in 2021-2022: for them the split is 35% Africa / 48% US/ 17% elsewhere.

Which countries in particular are those investors HQ’ed in? In North America, it’s almost exclusively the US (96%). In Africa, South Africa leads with 100 of the investors (27%) doing at least one deal on the continent in the past couple of years, followed by Nigeria (77), Egypt (66), and Kenya (44); the Big Four combined represent 78% of the region’s total. In Europe, the UK (91) is in the lead with a third of the European investors active in Africa. Follow France (37), the Netherlands (31), Switzerland (23) and Germany (21); these five countries make up 72% of the European total. The three Asia Pacific countries where most Africa-active investors are located are Japan (28), China (25), and Singapore (22). In the Middle East, 80% of those are either based in the UAE (36) or Saudi Arabia (30).

We’re just short of 1,000 downloads on the deck we shared last week, which feels great! Thanks everyone for your interest in our work: we look forward to seeing those graphs and maps pop up here and there :)) And if there’s a specific visual or analysis you think would be particularly helpful, never hesitate to get in touch! But if you’re one to prefer to play with the data yourself, head straight to our database. I mean, through this link of course, so you get the discount ;)