Thursday , July 29 2021

What can you expect from investment in African engineering in 2019?

Offers. Offers. Offers. African start-up technologies dominated the headlines of record-breaking projections of fund-raising in 2018. He picked up Tizeti. The research has appeared. Farmcrowdy picked up. Piggybank lifted. Kobo360 raised. Jumo raised it. Zola Electric picked up. Conversation in Africa

And more. Recent reports estimate that technological start-ups in 2018 have provided $ 334.5 million, according to a recent announcement Break the African report. This has increased from $ 195 million and will continue as technology enthusiasts and investors converge at Africa Tech in Kigali on February and 15th place.

Without a doubt, the numbers in 2019 will be overshadowed by Andela's recent big announcement, which has won the staggering 100 million D series, a total increase of $ 180 million. Andela is one of the success stories of the continent when it comes to providing institutional investment and great growth, which is a major contribution to international narratives that the African technology scene is open to business and is very valuable to investing.

In view of the above, it is clear that investments are in the right direction. Obviously, long-term investment or hospital capital is crucial to any strategy of the angel or VC of Africa. Because there are very few exits on the continent, African technology is by no means a quick investment.

But who encourages this investment? Where does the money come from? Are Africans investing in Africa? Is technology over VC under the control of the West?

The recent TechCrunch, which has deeply sunk initial investment for the continent, has shown that investors located on the continent bring more money on the basis of data obtained from Crunchbase. The report found that out of 51 funds that focused on Africa, 43% were in Africa and were administered by Africans.

This news originated on the basis of Africa's view of the view that African technologies are too under the influence of foreign investment and controlled, and certainly add fuel to the debate. While international investment continues to flow into the sector, evidence suggests that on the ground and continent on this continent dogs of BO and angel investors have been created – close cooperation with entrepreneurs and innovators for building and extending technology.

In fact, we must not forget that the previous round of Andela, worth $ 40 million, which was in 2017, was actually run by CRE Venture Capital from South Africa.

I'm talking Emilian Popa, Director of DiGame Investment, prior to the Africa Tech Kigali Summit, are aware of the different approaches to doing business in Africa and the US. "Pure tech in Africa is difficult, unlike the US where technology can take advantage of existing infrastructure or China, where technology giants have built infrastructure in addition to technology. Africa needs companies that have both a technologically and some sort of distributed infrastructure that they would control (they would not have). This is important for how we intend to structure the flow of our business in the coming years.

Finding successful businesses that understand these unique models is crucial for the success of the sector. Those who understand the nuances and the peculiarities of the scale of technology companies in Africa are mainly those operating on the continent for many years and have worked in many different countries. This knowledge of different markets, sectors that require disruption [or amplification] and discovering the gaps in the market – this is what makes smart African VC.

Ido SumA partner at TLcom Capital says that in 2018, VC defined B2B opportunities in very large sectors that needed disturbance, from advertising to logistics. It points out that some large companies have recognized real market gaps and inefficiencies with a very deep understanding of the local context and roots of problems, along with real innovations in business models and solutions that were built around these challenges and gaps.

And for TLC, gaps in the market will be part of their investment strategy for 2019, fintech, transport, energy, education and agriculture. Particularly in this respect, "the Group notes", "because this remains the largest sector in terms of GDP contribution for most African countries, and whereas with many inefficiencies and fragmentation, Agri is another big area waiting for disturbances on various fronts of a solution for farmers to finance logistics, etc. We are closely monitoring this kind of solution, with the interest to get even more involved this year. "

One sector, which in 2018 revealed many gaps in the market? Kola Aina The founding partner, Ventures Platform, says: "It sounds cliche, but in 2018, it was the real year of African fintech – because the sector has attracted considerable amounts of investment with a number of fast-maturing players – and it's just started."

For Popo in DiGame, key sectors are the key to monitoring in 2019, education, fintech, health technology, mobility and distributed energy production, and added: "We believe that demand in these sectors will anchor important, long-term African demographic changes, which include the exponential growth of the population (with a significant share below 35), the emerging middle class and rapid urbanization. "

Like its VC contemporaries, Aina also focuses on expanding companies, looking at fintech, healthtech and agri as focus areas, although it is also interesting to pay particular attention to artificial intelligence and adds: "We expect that we will see this year's role is becoming more important for start-up companies in the region. "

Regarding the addition of their portfolios and their main investment strategies in 2019, the VC we were talking with was mostly taking care of a strong founding group, innovation and problem solving – and many will undoubtedly seduce any founding group promising mass acceptance and scope. their product, exploiting the African flourishing, digital first populations. For Aino, their preferred investments in the near future are "ambitious founders offering goods and services that are offered by some forms of innovation (not limited to technological innovation) – for massive low-income markets or fast-growing middle class."

DiGame Popa also deals with the same ethos and adds: "He will support companies that can spread across Africa and the world. We are looking for companies that can grow into giants – US $ 100 million to US $ 1 billion – and we are looking for entrepreneurs who can provide such growth in Africa. «

The amount at TLcom, while it deals with transactions with an average investment size of $ 500k to $ 5m, also shows that "we are looking for exceptional teams with a very deep understanding of the market, using technology to solve very large problems that can not only be identified , but also come up with information and solutions based on experience. "

For more information and tips from experienced African technical investment companies, join Ido Sum, Partner at Capital TLcom in Emilian Popa, Main on DiGame Investment on African Technology Summit Kigali 2019 13 and 15 February at the Kigali Congress Center in Rwanda.

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