Investors African start-ups

Africa’s technology-dominated startups will continue to attract investment, even if at a slower pace, following record venturecapital funding last year.

The sector has seen inflows of $2.7 billion since January, more than double the $1.2 billion in the first five months of last year, according to data collated by Futuregrowth Asset Management.

“We still see that African venture capital will be up year-onyear, albeit at a more subdued growth rate,” said Ian Lessem, managing partner at Cape Town-based HAVAIC, which makes between four and eight investments in early stage companies across South Africa, Nigeria and Kenya every year.

The charts and map below show how funding surged last year and the markets that will continue attracting the most inflows in future. In 2021 Nigeria and SouthAfrica led the way as investments surged to $5.2 billion, according to Cape Town-based Futuregrowth, which oversees about $12 billion across a number of asset classes. The financing will likely slow in the months ahead as US investors, who brought in most of the money last year, retreat amid a global market downturn.

“The fundamentals for a lot of the businesses in Africa remain very very strong,” Lessem said. “Good businesses will always raise capital. They may have to work a little bit harder.”

Nigeria, with a population of over 200 million, is a sizable market in and of itself, while Kenyan companies have usually operated across a regional trade bloc of more than 170 million people before expanding further.

BY MARK-ANTHONY JOHNSON

Record Funding : Africa venture capital raised $5.2 billion in 2021 Top 6 countries for funding raised “ Investors still keen on African start-ups despite global headwinds