There are numerous reasons to invest, however investors must be aware that Africa will test their patience. The African markets aren’t always stable and time horizons might not always be effective. Even the most sophisticated companies may need to reconsider their business plans, as Nestle did last year in 21 African countries. Many countries also have deficits. These gaps must be filled by bold and resourceful investors who will bring more prosperity to Africa.
TLcom Capital’s $71 million TIDE Africa Fund
TLcom Capital’s latest venture closed at $71 million. The predecessor fund closed in January of this year. Five million dollars were contributed by Sango Capital, Bio, CDC Group and TLcom. The first fund invested in tech companies in Kenya and Nigeria. TIDE Africa II will focus on fintech companies located in East Africa. The investment firm has offices in Kenya and Nigeria. The portfolio of TLcom comprises Twiga Foods and Andela as in addition to uLesson and Kobo360. Each company is worth between $500,000 to $10 million.
TLcom is founded in Nairobi, is a VC company is home to more than $200 million under control. Omobola Johnson is one of the company’s Managing Partner. He has assisted in the launch more than a dozen technology companies in Africa, including Twiga Foods, and a trucking logistics company. Omobola Johnson (a former minister of technology for communication in Nigeria) is part of the team of the investment firm.
TIDE Africa is an equity fund that invests into growth-stage tech companies in SSA. It will invest between $500,000 and $10 million in early stage companies and will focus on Series A and B rounds. The fund will be primarily focused on Anglophone Africa but it plans to invest in Eastern and Southern African countries. TIDE for instance has invested in five high growth digital companies in Kenya.
Omidyar Network’s $71 million TEEP Fund
The Omidyar Network is a US-based philanthropic investment firm that aims to invest between $100-$200 million in India over the next five years. The fund was founded by eBay co-founder Pierre Omidyar and has invested $113 million in 35 Indian companies since the year 2010. In India, the firm invests in entrepreneurship, consumer internet financial inclusion, transparency in government property rights, and companies that have a social impact.
The Omidyar Network’s TEEP Fund invests in projects that increase access to government information. It aims to identify non-profits that make use of technology to develop public information portals and tools that are accessible to citizens. The network believes that open access to government information improves public awareness of government procedures, which will result in a more engaged society that holds officials accountable. Imaginable Futures will invest the funds in nonprofit and for-profit organizations that focus on education and health.
Raise
You should select a company that is focused on Africa if are looking to raise money for your African startup. TLcom Capital, a fund manager with its headquarters in London is one of these companies. Angel investors have been attracted to its African investments and the team has also raised money in Nigeria and Kenya. TLcom recently announced the launch of a new fund worth $71 million, looking for a private investor which will invest in 12 startups before they reach profitability.
The capital market is becoming increasingly aware of the benefits of Africa venture capital. Private investors are increasingly seeing the potential of Africa’s development and don’t need to be limited by institutional investors. This means that raising funds has never been simpler. Raise enables businesses to close deals in a fraction of the time and is without institutional limitations. There isn’t a single way to raise money for African investors.
The first step is to comprehend how investors think about African investments. While YC hype appeals to a lot of investors, it’s important that you take a look beyond the Silicon Valley giant and Agenda 2063 of the African Union. African companies are now searching for the YC signal to make contact with US investors. A Tunisian venture capitalist Kyane Kassiri recently spoke out about the importance of the YC signal when seeking funds for African investors.
GetEquity
Established in July 2021, GetEquity is an investment platform in Nigeria aimed at democratizing startup funding in Africa. It is aiming to make the process of funding African startups easy for the average person by bringing world-class capital raising tools to any startup. The platform has already helped startups raise more than $150,000 from a variety of investors. Additionally, it provides a secondary market that allows investors to purchase other investors’ tokens.
Contrary to equity crowdfunding, investing in early-stage companies is an extremely exclusive venture. It is usually only available to the most prominent individual angel investors, capital institutions, and syndicates. It’s not often available to family and friends. However, new companies are trying to disrupt this privileged arrangement by increasing access to startup funds in Africa. It is accessible for both Android and iOS devices. It is free to use.
With the launch of its blockchain-based wallet, GetEquity is making startup investing in Africa feasible for all investors. Investors can invest as little as $10 in African startups through crypto funds. Although this may seem an insignificant amount as compared to traditional equity financing, it is still an enormous amount of cash. Following the recent demise of Paystack by Spark Capital GetEquity has become an ideal platform for investors from Africa who want to invest in Africa.
Bamboo
Bamboo’s first hurdle is convincing young Africans to invest in the platform. Investors in Africa had only a few options prior to the present the crowdfunding platform, foreign direct investment (FDI) and traditional finance companies. In actuality, only a third of the population has made a purchase in any platform. However the company has announced that it is expanding into other parts of Africa with plans to launch in Ghana in April 2021. More than 50, 000 Ghanaians are waiting to be added to the waitlist as of this writing.
Africans do not have many options to save money. With inflation running at nearly 16%, the currency is depreciating against the dollar. It is beneficial to invest in dollars to hedge against the rising cost of inflation as well as a falling currency. One platform that allows Africans to invest in U.S. stocks is Bamboo, which has experienced rapid growth in the last two years. Bamboo is set to launch in Ghana in April 2021 and has more than 50,000 users waiting for access.
Investors can fund their wallets as early at just $20 once they’re registered. The funds can be accessed via credit cards, bank transfer, and credit cards. After that, they can trade ETFs and stocks and receive regular market updates. As Bamboo’s platform is bank-level secure, it can be used by anyone within Africa that has an acceptable Nigerian Bank Verification Number. Bamboo’s services can also be used by professional investment advisors.
Chaka
Nigeria is a hub for legitimate business and investment. The film and entertainment industry is among the top in the world, and the country’s growing fintech ecosystem has resulted in an explosion in startup formation and VC activity. One of the most well-known backers of Chaka, Iyinoluwa Aboyeji, said to TechCrunch that the country’s modern changes will eventually open the doors to a new class of investors. Chaka also received seed-funds from Microtraction which is managed by Michael Seibel, CEO of Y Combinator.
Beijing has been more interested in African investments due to the declining relationship between the US and China. An increase in anti-China sentiment as well as the trade war have made it more attractive for investors to invest in African businesses outside of the US. Although the continent of Africa is home to many emerging economies, the majority of markets are not big enough for venture-sized businesses. The business owners of Africa must be ready to take on an expansionist mindset and lock in a consistent expansion story.
The Central Securities Clearing System oversees the Nigerian Stock Exchange, making it a safe and secure platform to invest in African stocks. Chaka is free to join, and you’ll receive the 0.5 percent commission per 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 days. In both instances the cash payment for sold shares is settled locally.
Rise
The rising number of investors eager to invest in Africa is a good thing for Africa. The economy is stable and its governance is sound, which is why it is a popular destination for international investors. This has raised the standard of living in Africa. Africa is still a risky investment area. Investors should exercise caution and do their study. There are plenty of opportunities to invest in Africa. However, the continent must improve its infrastructure to attract foreign capital. In the coming years, African governments should work to create more conducive environments for business and improve their Business Venture Investments South Africa climate.
The United States is more willing to invest in the economies of Africa via foreign direct investment. U.S. governments assisted Senegal in advancing a major health financing facility. The U.S. government also supported investments in new technologies in Africa and business venture investments south africa also helped pharmacies in Nigeria and Kenya stock high-quality medicine. This investment can create jobs and help build long-term partnerships between the U.S.A and Africa.
There are a lot of opportunities to invest in the African stock exchange. However, it’s important to know the market and to do your due diligence to avoid losing money. If you’re a small investor, it’s a smart idea to invest in an exchange-traded fund (ETFs) which track a wide range of Sub-Saharan African businesses. American depositary receipts (ADRs), which are issued by the United States, allow investors to trade African stocks on the U.S. stock exchange.