SPOTLIGHT ON AFRICA'S MOST PROLIFIC TECH INVESTOR

Launch Africa's $31m+ deployed through 133 investments in ~2.5 years make it the most active dealmaker on the continent

Following our focus on the most active investors in Africa back in February - our most-read article to date -, we thought it was worth digging a little more into Launch Africa, the most active investor on the continent. Their numbers speak for themselves really: since their launch in mid-2020, they have invested over $31m through 133 deals, at a rate of more than a deal a week on average. All but 4 of these deals (97%) were between $100k et $300k, with a median cheque of $250k. Three quarters were in the $200k-$300k range.

Geographically speaking, Launch Africa invested in start-ups spread across 22 markets; in more than half of them (12/22), they were involved in multiple deals. The ‘Big Four’ represent two thirds of the deals and capital invested through Fund 1 (89 deals, $21m); Nigeria and South Africa are neck and neck, followed at a distance by Kenya and Egypt. Five other markets attracted more than $1m+ from Fund 1: Ghana, Senegal and Côte d’Ivoire in West Africa, Tanzania, and Tunisia. The investment team also went off the beaten tracks, identifying investments in often-overlooked countries such as Togo, Sudan or Angola. Unsurprisingly, Fintech is the sector Launch Africa has been investing the most in through Fund 1, with 42 deals (32%) totalling $11m (36%) across 13 markets in total, and including 13 fintech transactions in Nigeria alone. However four other sectors have also seen significant deal activity (>10%, ı.e. $3m-$4m and 15-20 deals): Marketplaces, Logistics, Big Data and HealthTech. Deals in these categories were spread across ~10 markets each, except for HealthTech with deals spanning ‘only’ 5 markets, including 7 deals in South Africa (the second largest country/sector combination after Nigeria/ Fintech).

A core feature of the Launch Africa portfolio is therefore its great level of diversification. There is significant depth and breadth in how the portfolio has been constructed, resulting in coverage across multiple geographies, sectors and verticals. The top 4 sectors by invested value make up 70% of the portfolio, with the remaining 30% spread across 11 other sectors. Yet within the top 4 sectors multiple business models are represented along the different value chains, ensuring that no one use case dominates. For instance, there are 6 verticals within the Fintech sector, including credit (both B2C & B2B), remittances, payment, digital banking (both enterprise & consumer) and financial infrastructure (APIs). Geographically as well, the portfolio covers various verticals in each of the portfolio sectors. In Francophone Africa as an example, the ~$4m invested in the region have been allocated to startups in logistics marketplace, P2P APIs, health insuretech, agri marketplace or e-commerce. As a result, there is now a very healthy portfolio of companies for laterstage investors to look into for follow-on investments.

What’s next? Launch Africa is currently raising its second seed stage fund in order to service the ever-increasing need for capital in the African start-up space. The competition for this funding will certainly be tough: for the current fund, they received over 2,000 pitches! With this new fund, potential LPs will once again have the opportunity to work alongside one of the continent's most prolific venture capital funds.