There are many reasons to invest, however investors must be aware that Africa will test their patience. The African markets can be volatile and time horizons might not always work. Even the most sophisticated firms might need to revise their business plans, just as Nestle did last year in 21 African countries. Many countries also face deficits. These gaps will need to be filled by resourceful and bold investors who can bring more prosperity to Africa.
The $71 Million TLcom Capital’s TIDE Africa Fund
The latest venture by TLcom Capital been closed at an estimated $71 million. The funds’ predecessor closed in January of last year. TLcom, company funding options Bio, CDC Group and Sango Capital contributed five million dollars. The fund’s first investment was in more than a dozen tech companies from Kenya, Nigeria, and South Africa. TIDE Africa II will be focusing on East African fintech firms. The investment firm has offices in Kenya and Nigeria. The portfolio of TLcom includes Twiga Foods and Andela as well as uLesson and Kobo360. The investment company makes between $500,000 and $10 million for each company.
TLcom, an Nairobi-based VC company, has more than $200 million under control. Omobola Johnson is the company’s Managing Partner. He has assisted in the create more than a dozen tech businesses across the continent, including Twiga Foods, and a trucking logistics business. Omobola Johnson (a former minister of technology for communication in Nigeria) is part of the investment firm’s team.
TIDE Africa is an equity investment fund that invests in growth stage tech companies in SSA. It will invest between $500,000 and $10 million in companies in the early stages, with an emphasis 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. In Kenya for instance, TIDE has invested in five companies with high growth in digital technology.
Omidyar Network’s $71 million TEEP Fund
The Omidyar Network, a US-based company that invests in philanthropy, hopes 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 firm invests in India’s business and How To Get Investors In South Africa consumer internet, as well as financial inclusion. It also has investments in property rights, government transparency, transparency of the government, and companies that have a social impact.
The Omidyar Network’s TEEP Fund makes investments that are specifically designed to improve access to government information. It seeks to identify non-profits using technology to develop public information portals and tools for citizens. The network believes that open access to government information enhances public awareness of government procedures, which leads to a more engaged society that holds government officials accountable. Imaginable Futures will invest the funds into nonprofit and for-profit organizations that focus on education and health.
If you’re looking to raise funds for your African startup, it’s best to look for a business with a strong Africa-centric focus. One of these companies is TLcom Capital, a fund management firm that is based in London. Angel investors have been attracted to its African investments, and the team has raised money in Nigeria and Kenya. TLcom recently announced the launch of a new $71 million fund aiming to invest in 12 startups before they can achieve revenue.
The attraction of Africa venture capital is being recognized by the capital markets. Private investors are becoming increasingly aware of the potential for growth in Africa and company funding options don’t need to be limited by institutional investors. This means that raising money has never been simpler. Raise allows businesses to close deals in a fraction of the time and is completely without institutional limitations. There is no single method to raise money for African investors.
The first step is to know How To Get Investors In South Africa investors think about African investments. Although many investors are attracted to YC hype, it’s crucial to consider the bigger picture of this Silicon Valley giant and the Agenda 2063 of the African Union. African startups are now looking for the YC signal to engage with US investors. A Tunisian venture capitalist Kyane Kassiri recently spoke about the importance of the YC sign when raising funds for African investors.
GetEquity, an investment platform based in Nigeria, was founded in July of 2021. Its goal is to make the process of funding startups in Africa. Its goal is to make funding for African startups accessible to all by offering capital raising tools and world-class capital for all startups. The platform has already helped startups raise over $150,000 from a range of investors. It also offers secondary markets for investors to buy tokens from other investors.
Like equity crowdfunding, investing in early-stage companies is a highly exclusive venture which is generally only accessible to leading individual capital institutions and angel investors, as well as syndicates. It’s not typically accessible to family members and friends. New startups are seeking to change this traditional arrangement by making it easier for entrepreneurs to access capital for startups in Africa. The platform is available on iOS and Android devices and is completely free to use.
With the introduction of its wallet based on blockchain, GetEquity is making startup investing in Africa an option for common investors. With the help of crypto-based funds, investors can invest in African startups starting at just $10. Although this is a modest amount, it’s still a significant amount of in comparison to traditional equity financing. With the recent acquisition of Paystack by Spark Capital, GetEquity has grown into a powerful ecosystem for investors willing to invest in Africa.
The first challenge for Bamboo is convincing young Africans to invest on the platform. Investors in Africa had only a few options prior to now such as crowdfunding, foreign direct investments (FDI) as well as legacy finance companies. About a third of Africans have been able to invest on 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. As of this writing more than 50,000 Ghanaians have signed up on the waitlist.
Africans have limited alternatives to save money. The value of the currency is declining against the dollar due to inflation of close to 16 percent. It is beneficial to invest in dollars to protect against rising inflation and a falling currency. One platform that allows Africans to invest in U.S. stocks is Bamboo which has seen rapid growth in the past two years. It plans to launch in Ghana in April 2021 and already has over 500 users who are waiting to get access.
Once registered, investors are able to cash in their wallets using just $20. The funds can be accessed via credit cards, bank transfers and credit cards. Afterwards, they are able to trade ETFs and stocks, and receive regular market updates. Bamboo’s platform has a bank-level security so anyone from Africa can use it as long as they have an authentic Nigerian Bank Verification number. Bamboo’s services can also be utilized by professional investment advisers.
There are a few reasons to consider why Nigeria is a hotbed for legitimate investment and business. The Nigerian film and entertainment industry is one of the largest in Africa. The country’s expanding fintech industry has led to an explosion in the number of startups and VC activity. TechCrunch interviewed Iyinoluwa Abodeji, one of Chaka’s most prominent backers. She stated that the trend towards progress in the country will eventually open doors for investors of a new class. 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. The trade war, and growing anti-China sentiment have made it more appealing for investors to consider investing outside of the US to invest in African companies. Although the continent of Africa has many developing economies, the majority of them are not large enough for venture-sized enterprises. The owners of businesses in Africa should be prepared to adopt an expansionist mindset and be locked into a coherent expansion narrative.
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 gives an 0.5% commission on every trade. Cash withdrawals that are available take up to 12 hours. In the case of withdrawals of shares sold however could take up to three days. In both instances, the cash for sold shares is settled locally.
Africa is receiving positive news due to the rise in investors looking to invest. Its economy is stable and its governance is sound, which draws foreign investors. This growth has increased the standard of living in Africa. Africa is still a risky investment area. Investors must be cautious and do their research. There are plenty of opportunities to invest in Africa. However, the continent must improve its offerings to attract foreign capital. In the next few years, African governments should work to create more conducive environments for business and improve the business environment.
The United States is increasingly willing to support African economies with foreign direct investment. U.S. governments assisted Senegal in advancing a significant healthcare financing facility. The U.S. government also supported the development of new technologies in Africa and assisted pharmacies in Nigeria and Kenya provide high-quality medication. This investment could create jobs and help build long-term partnerships between the U.S.A and Africa.
There are many opportunities on the African stock exchange. However, it’s important to understand the market and perform your due diligence to avoid losing money. If you are a small investor, you should invest in exchange-traded funds (ETFs), which are funds that track a wide range of Sub-Saharan African companies. For U.S. investors, American depositary receipts (ADRs) are an easy method to trade African stocks in the U.S. stock market.