There are numerous reasons to invest, however investors need to be aware that Africa will test their patience. The African markets can be unstable and time horizons may not always work. Even sophisticated companies may need to re-evaluate their business plans, like Nestle did in 21 African countries in the last year. Many countries also have deficits. These gaps will need to be filled by resourceful and bold investors who can bring more prosperity to Africa.
TLcom Capital’s $71 million TIDE Africa Fund
The latest venture of TLcom Capital closed at $71 million. The predecessor fund closed in January last year. Five million dollars were donated by Sango Capital, Bio, CDC Group and TLcom. The first fund made investments in tech companies in Kenya and Nigeria. TIDE Africa II will concentrate on fintech companies located in East Africa. The investment firm has offices in Kenya and Nigeria. TLcom’s portfolio includes Twiga Foods, Andela, uLesson and Kobo360. Each company is worth anywhere from $500,000 to $10 million.
TLcom is a Nairobi-based VC firm with more than $200 million in under management. The company’s managing partner, Omobola Johnson, has been instrumental in launching more than a dozen tech companies across the continent which include Twiga Foods and a trucking logistics company. Omobola Johnson (a former minister of technology for communication in Nigeria) is part of the investment firm’s team.
TIDE Africa is an equity fund that invests in growth-stage tech companies in SSA. It will invest between $500,000 and $10 million in early-stage companies with a particular focus on Series A and II rounds. Although the fund will be focusing on Anglophone Africa, it plans to invest in Eastern and Southern African countries, too. In Kenya for instance, TIDE has invested in five companies that are growing rapidly in the digital sector.
Omidyar Network’s $71M TEEP Fund
The Omidyar Network, a US-based investment firm that invests in philanthropy, has set out to invest between $100 and $200 million in India over five years. Pierre Omidyar, co-founder of eBay, founded the fund and has invested $113 Million in 35 Indian companies. The firm invests in the Indian consumer internet, entrepreneurship and financial inclusion. It also has investments in property rights, government transparency, government transparency, and companies with social impact.
The Omidyar Network’s TEEP Fund invests in projects that increase access to government information. It’s goal is to find non-profits that make use of technology to create public information portals as well as tools for citizens. The network believes that open access to government data increases public awareness of government processes, which in turn creates a more involved society that holds officials accountable. Imaginable Futures will use the funds to invest in for-profit and non-profit organizations that focus on healthcare and education.
Raise
If you’re looking to raise funds for your African startup, it’s best to choose a company that has a strong Africa-centric focus. One of these companies is TLcom Capital, a fund management company based in London. Angel investors have been drawn to its African investments, and the team has also raised money in Nigeria and Kenya. TLcom has just announced the launch of a new fund worth $71 million to invest in 12 startups before they reach profitability.
The potential of Africa venture capital is being recognized by the capital market. More private investors are recognizing the potential of Africa for growth, and don’t have the constraints of institutional investors. This means that raising money is never easier. Raise helps businesses to close deals in half the time and is also free of institutional restrictions. But there’s no one right method of raising funds for African investors.
The first step is to comprehend how investors think about African investments. While many investors are drawn to YC hype, it’s important to consider the bigger picture of this Silicon Valley giant and the Agenda 2063 of the African Union. This is why African startups are looking for the YC signal before approaching US investors. Kyane Kassiri is an Tunisian venture capitalist, has recently discussed the importance of the YC signal when it comes to raising funds for African investors.
GetEquity
GetEquity, an investment platform that is based in Nigeria was established in July 2021. It aims to democratize the funding of startups in Africa. It aims to make financing African startups easier for everyone by offering capital raising tools and world-class capital for all startups. The platform has already helped startups raise over $150,000 from a wide range of investors. It also has secondary markets for investors to buy tokens from other investors.
Unlike equity crowdfunding, investing in early-stage companies is a highly privileged activity that is typically available to top capital institutions and angel investors as well as syndicates. It’s not typically accessible to family members or friends. New startups are trying to change this traditional arrangement by making it easier to access capital for startups in Africa. The platform is available on iOS and Android devices and is completely free to use.
The GetEquity blockchain-based wallet is now available to investors. This makes it possible to invest into startups in Africa. With the help of crypto funds, investors can invest in African startups starting at just $10. While this may seem like an insignificant amount compared to traditional equity funding, it is still an enormous amount of money. Following the recent demise of Paystack by Spark Capital GetEquity has become an ideal platform for African investors looking to invest in Africa.
Bamboo
The first challenge for Bamboo is to convince young Africans to invest on the platform. Investors in Africa had limited options prior to the present including crowdfunding and foreign direct investment (FDI) and traditional finance companies. In actuality, only 1/3 of the population had invested in any platform. The company has announced that it is expanding into other countries in Africa, with plans to launch in Ghana by April 2021. As of this writing more than 50,000 Ghanaians have signed up for the waitlist.
Africans have limited options to save money. With inflation hovering around 16% the currency is declining against the dollar. The investment in dollars can help protect against inflation and a falling currency. Bamboo is a platform that has seen rapid growth in the last two years, is a platform that allows Africans to invest in U.S. stock options. Bamboo is set to launch in Ghana in April 2021 and already has more than 50,000 users waiting for access.
Investors can fund their wallets as early at $20 once they are registered. Funding can be made through credit cards, bank transfer, and investors willing to invest in africa credit cards. Then, they can trade stocks and ETFs and receive market updates. Bamboo’s platform is bank-level secure and therefore anyone in Africa can use it provided they have an active Nigerian Bank Verification number. Bamboo’s services can also be used by professional investment advisers.
Chaka
There are several reasons that Nigeria is a hotspot for legitimate investment and business. The Nigerian film and entertainment industry is one of the largest in Africa. The country’s expanding fintech sector has resulted in an explosion in the number of startups and VC activity. One of the most prominent backers of Chaka, Iyinoluwa Aboyeji, told TechCrunch that the country’s progressive developments will eventually open doors to a brand new group of investors. Chaka also received seed-funds from Microtraction which is run by Michael Seibel, business funding CEO of Y Combinator.
The weakening relationship between the US and China has increased Beijing’s interest in African investments. Rising anti-China sentiments and the trade war has made it more attractive for investors to invest in African companies that aren’t in the US. The African continent is home to huge, developing economies, but most markets are too small to sustain venture-sized businesses. The business owners of Africa should be prepared to take on an expansionist mindset and be locked in a coherent expansion narrative.
The Central Securities Clearing System oversees the Nigerian Stock Exchange, making it a secure and safe platform to invest in African stocks. Chaka is free to join and offers an 0.5 percent commission on each trade. Cash withdrawals of cash available can take up to 12 hours. On the other hand, withdrawals of sold shares can take up to three working days. In both cases the cash payment for sold shares is settled locally.
Rise
Africa is seeing positive news from the increased number of investors willing to invest. The country’s economy is stable and its governance is sound, which is a major draw for foreign investors. This has raised the standard of living in Africa. However, Africa is still a dangerous investment destination therefore investors must exercise caution and due diligence. There are many opportunities to invest in Africa. However Africa needs to make improvements to draw foreign capital. African governments must work together to create a more business-friendly environment and improve the business climate in the coming years.
The United States is increasingly willing to support African economies through direct foreign investment. In 2013, U.S. governments helped advance a major healthcare financing facility in Senegal. The U.S. government also helped to secure investments in new technologies in Africa, and helped pharmacies in Kenya and private investor looking for projects to fund Nigeria have access to high-quality medicines. This investment could create jobs and build long-term relationships between the U.S.A and Africa.
While there are plenty of opportunities to invest in the African market for stocks, it is vital to be aware of the market and carry out due diligence to make sure that you don’t lose money. If you are a small investor, it’s a good option to invest in an exchange-traded fund (ETFs) which track a wide range of Sub-Saharan African businesses. American depositary receipts (ADRs) are issued by the United States, allow Investors willing to Invest in africa to trade African stocks on the U.S. stock exchange.