Expires in 11 months
02 July 2022
There are many good reasons to invest in Africa, investors should know that the region will test their patience. The African markets are volatile and time horizons may not always work. Even sophisticated companies may need to adjust their business plans, just as Nestle did in 21 African countries last year. Many countries also have deficits. These gaps will need to be filled by smart and savvy investors who can bring more prosperity to Africa.
The $71 million investment by TLcom Capital TIDE Africa Fund
The latest venture from TLcom Capital ended at $71 million. The fund's predecessor 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 also has offices in Nigeria and Kenya. The portfolio of TLcom includes Twiga Foods, Andela, uLesson and Kobo360. Each company is worth $500,000 to $10 million.
TLcom is located in Nairobi, a VC company, has more than $200 million under management. Omobola Johnson is one of the firm's Managing Partners. He has assisted in the launch more than a dozen tech-related companies across the continent, including Twiga Foods, and a trucking logistics company. Omobola Johnson (a former minister of technology and 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 to $10 million in companies that are at the beginning of their development that are focusing on Series A and II rounds. While the fund is focusing on Anglophone Africa, it plans to invest in Eastern and Southern African countries, too. TIDE for instance has invested in five high-growth digital companies in Kenya.
Omidyar Network's $71M TEEP Fund
The Omidyar Network, a US-based philanthropic investing firm, aims to invest $100-$200 million in India over the course of five years. Pierre Omidyar, co-founder of eBay was the fund's founder and has invested $113 Million in 35 Indian companies. The fund invests in India's consumer internet, entrepreneurship , as well as financial inclusion. It also invests in property rights, government transparency and transparency in government as well as companies that have a social impact.
The Omidyar Network's TEEP Fund makes investments that are designed to improve access to government information. Its goal is to identify nonprofits using technology to develop public information portals and tools for citizens. The group believes that access to government information improves public knowledge about government processes and contributes to an engaged society that holds government officials accountable. Imaginable Futures will use the funds to invest in non-profit and for-profit companies that focus on healthcare and education.
You should choose a company that is focused on Africa if are looking to raise capital for your African startup. One of these companies is TLcom Capital, a fund management firm based in London. Angel investors have been attracted to its African investments, and the company has raised money in Nigeria and Kenya. TLcom recently announced the launch of a new $71 million fund aiming to invest in 12 startups prior to them reaching revenue.
The capital market is becoming increasingly aware of the potential appeal of Africa venture capital. Private investors are becoming more aware of the potential of Africa to grow and don't have the constraints of institutional investors. This means that raising money is much more simple than in the past. Raise helps businesses close deals in half the time and is free from the restrictions of institutions. There's no single best method of raising funds for African investors.
Understanding how investors view African investments is the first step. While YC hype is appealing to a large number of investors, it's important that you look beyond the Silicon Valley giant and Agenda 2063 of the African Union. African startups are now looking for the YC signal to approach US investors. Kyane Kassiri is an Tunisian venture capitalist, recently spoke about the importance of the YC signal when it comes to raising money for African investors.
GetEquity, an investment platform in Nigeria, was established in July 2021. It aims at democratizing the funding of startups in Africa. It is aiming to make funding African startups easier for everyone by providing capital raising tools and world-class capital to all startups. It has helped numerous startups get more than $150,000 in funding from a variety of investors. In addition, it also offers a secondary market for investors to purchase other investors' tokens.
Unlike equity crowdfunding investing in early-stage businesses is a very exclusive business that is typically available to elite individual angel investors and capital institutions and syndicates. It's not typically accessible to family members and friends. However, new startups are working to challenge this exclusive arrangement by increasing access to startup funds in Africa. It is accessible for both Android and iOS devices. It is free to use.
The GetEquity blockchain-based wallet is now accessible to investors. This makes it possible to invest into startups in Africa. With the assistance of crypto funds, investors can invest in African startups for as little as $10. While this is a tiny amount, it's still significant in comparison to traditional equity financing. With the recent departure of Paystack by Spark Capital, GetEquity has developed into a thriving ecosystem for investors who want to invest in Africa.
Bamboo's first hurdle is convincing young Africans to invest in the platform. In the past, investors in Africa were restricted to a few options including foreign direct investment (FDI) or crowdfunding and the legacy finance companies. In fact, only about one-third of the population has made a purchase on any platform. The company says it is expanding into other countries in Africa, with plans to launch in Ghana in April 2021. At the time of writing, more than 50,000 Ghanaians have signed up for the waitlist.
Africans do not have many options to save money. With inflation running at nearly 16 percent, the currency is depreciating against the dollar. It is beneficial to invest in dollars to hedge against the effects of inflation and a declining currency. Bamboo, which has seen rapid growth in the last two years, is one platform that allows Africans invest in U.S. stock options. Bamboo will go live in Ghana in April 2021. Bamboo already has more than 50,000 users who are waiting to be granted access.
Once registered, investors are able to fund their accounts with just $20. You can fund your account using credit cards, bank transfer, or credit cards. Afterwards, they can trade stocks and ETFs and receive regular market updates. Bamboo's platform, which is bank-level secure and dependable, it can be utilized by anyone in Africa who has an official Nigerian Bank Verification Number. company funding options can also be used by professional investment advisors.
Nigeria is a major hub for legitimate business and investment. The entertainment and film industry is among the biggest in the continent and the country's expanding fintech industry has led to an increase in startup formation and VC activity. One of the most prominent supporters of Chaka, Iyinoluwa Aboyeji, told TechCrunch that the country's progressive developments will eventually open doors to a brand new group of investors. In addition to Aboyeji's investment, Chaka has also secured seed-funds from the Microtraction fund, which is led by Y Combinator CEO Michael Seibel.
Beijing has been more interested in African investments due to the weakening relationship between the US and China. The trade war, along with growing anti-China sentiment has made it more attractive for investors to consider investing outside of the US to invest in African companies. While Africa has many developing economies, the majority of markets aren't big enough for venture-sized businesses. The entrepreneurs of companies in Africa must be ready to adopt an expansionist mindset and be locked in a consistent expansion story.
The Nigerian Stock Exchange is overseen by the Central Securities Clearing System, which makes it a secure and secure location to invest in African stocks. Chaka is free to join and offers a 0.5% commission on every trade. Cash withdrawals can take up 12 hours. Withdrawals of sold shares on the other hand can take as long as three days. Both cases are handled locally.
Africa is seeing positive news from the increase in investors who are willing to invest. Its economy is stable and its governance is sound, which attracts international investors. The growth has boosted the standard of living in Africa. Africa is still a risky investment location. Investors must be cautious and do their studies. There are many opportunities to invest in Africa. However Africa must make improvements to attract foreign capital. In the next few years, African governments should work to create more business-friendly environments and improve its business climate.
The United States is more willing to invest in Africa's economies via foreign direct investment. In 2013, U.S. governments helped develop a major financing for healthcare facility in Senegal. The U.S. government also supported investment in new technologies in Africa and helped pharmacies in Nigeria and Kenya provide high-quality medication. This investment can help create jobs and foster long-term partnerships between the U.S.A and Africa.
While there are numerous opportunities to invest in the African market for stocks it is important to know the market and carry out due diligence to ensure you don't make a loss. If you are a small investor, you should invest in exchange-traded funds (ETFs), which are funds that track an extensive selection of Sub-Saharan African companies. American depositary receipts (ADRs) that are issued by the United States, allow investors to trade African stocks on the U.S. stock exchange.