There are many reasons to invest in Africa but investors should be aware that the region will test their patience. The African markets are volatile and time horizons do not always work. Even sophisticated businesses may need to revise their business plans as Nestle did in 21 African countries last year. Many countries also face deficits. These gaps must be filled by resourceful and bold investors who will bring more prosperity to Africa.
The $71 million investment by TLcom Capital TIDE Africa Fund
The latest venture by TLcom Capital closed at a reported $71 million. The predecessor fund closed in January of last 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 and Andela as along with uLesson and Kobo360. The investment firm earns between the amount of $500,000 to $10 million for each of the companies.
TLcom is a Nairobi-based VC firm with more than $200 million under management. The company’s managing partner, Omobola Johnson, has helped to launch more than dozen tech-related companies across the continent, 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 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 and will focus on Series A and II rounds. Although the fund will focus 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 $71 million TEEP Fund
The Omidyar Network is a US-based company that invests in philanthropy that aims to invest between $100 and $200 million in India over the next 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 , as well as financial inclusion. It also has investments in property rights, how to get funding for a business transparency in government, transparency of the government, and companies with social impact.
The Omidyar Network’s TEEP Fund invests in projects which improve access to government information. It aims to identify non-profit organizations that utilize technology in creating public information portals and tools for citizens. The network believes that open access to government information enhances the public’s understanding of government processes, which in turn results in a more active society that holds officials accountable. Imaginable Futures will use the funds to invest in non-profit and for-profit companies that focus on education and healthcare.
It is important to choose a firm that is Africa-centric if you are looking to raise funds for your African startup. TLcom Capital, a fund manager with its headquarters in London is one such company. Angel investors have been attracted to its African investments, and the team has also raised money in Nigeria and Kenya. TLcom has just announced the launch a new fund of $71 million to invest in 12 startups before they achieve profitability.
The appeal of Africa venture capital is increasingly being acknowledged by the capital market. Private investors are increasingly recognizing the potential for Africa’s growth and don’t need to be restricted by institutional investors. This means that raising money has never been simpler. Raise enables businesses to close deals in half of the time and is completely without institutional limitations. But there’s no one right method to raise money for African investors.
Understanding how investors view African investments is the first step. While YC hype is appealing to investors of all kinds, it’s important that you think beyond the Silicon Valley giant and Agenda 2063 of the African Union. Therefore, African startups are looking for the YC signal before approaching US investors. A Tunisian venture capitalist Kyane Kassiri has recently spoken out about the importance of the YC signal when seeking funds for African investors.
Founded in July 2021, GetEquity is an investment platform based in Nigeria that aims to make it easier for startups to access funding in Africa. It is aiming to make funding African startups more accessible to everyone by providing capital raising tools and world-class capital to all startups. It has already helped numerous startups raise more than $150,000 from diverse Investors Looking For Projects To Fund – 5Mfunding. It also offers secondary markets for investors to buy tokens from other investors.
Contrary to equity crowdfunding, investing in early-stage companies is a very exclusive business which is generally only accessible to elite individual angel investors and capital institutions as well as syndicates. It is not generally accessible to family members or friends. New startups are attempting to change this traditional arrangement by making it easier to get capital for startups in Africa. It is available for 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. With the help of crypto funds, investors can invest in African startups starting at just $10. While this may seem a small amount compared to traditional equity funding but it’s still an impressive amount of money. With the recent departure from Paystack by Spark Capital GetEquity has become a strong ecosystem for investors from Africa looking to invest in Africa.
The first hurdle for Bamboo is convincing young Africans to invest on the platform. Up until now, investors in Africa were limited to a few options: foreign direct investment (FDI) as well as crowdfunding and the legacy finance companies. In fact, only about a third of the population has made a purchase on any platform. The company now says it is expanding into other countries in Africa, with plans to launch in Ghana by 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. The value of the currency is decreasing against the dollar due to inflation of more than 16%. The investment in dollars can help protect against the effects of inflation and a declining currency. One platform that allows Africans to invest in U.S. stocks is Bamboo which has seen rapid growth over the last two years. It plans to launch in Ghana in April 2021, and already has more than 50k users waiting to gain access.
Once registered, investors can get their wallets funded with as little as $20. You can fund your wallet with credit cards, bank transfer, or credit cards. Afterwards, they are able to trade ETFs and stocks and receive regular market updates. Since Bamboo’s platform is secure at the bank level, it can be used by anyone within Africa who can provide a valid Nigerian Bank Verification Number. Bamboo’s services can also be utilized by professional investment advisors.
There are a number of reasons for why Nigeria is a hotbed for legitimate business and investment. The film and entertainment industry in Nigeria is among the largest in Africa. The country’s expanding fintech industry has led to an increase in the number of startup companies and VC activity. One of the most well-known supporters of Chaka, Iyinoluwa Aboyeji, said to TechCrunch that the country’s modern trends will ultimately 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 that is run by Y Combinator CEO Michael Seibel.
The deteriorating relationship between China and the US has increased Beijing’s interest in African investments. The trade war, and the rising anti-China sentiment make it more attractive for investors to look beyond the US to invest in African companies. The African continent is home to large, developing economies, but the majority of markets are small to support venture-sized companies. African entrepreneurs should be prepared to adopt an expansion-minded approach and develop a cohesive expansion story.
The Nigerian Stock Exchange is overseen by the Central Securities Clearing System, which makes it a secure and secure platform to invest in African stocks. Chaka is free to join, and you will be paid an 0.5 percent commission for each trade. Cash withdrawals are able to take up to 12 hours. On the other hand, withdrawals for sold shares can take up to three days. Both are handled locally.
Africa is experiencing positive news from the increased number of investors who are willing to invest. Its economy is stable and its governance is sound, which draws foreign investors. This has led to a rise in living standards in Africa. Africa is still a risky investment destination. Investors should be cautious and do their studies. There are many opportunities to invest in Africa, but the continent needs to make improvements to attract foreign capital. In the coming years, African governments should work to create more conducive environments for business and improve the business climate.
The United States is increasingly willing to aid African economies through foreign direct investment. U.S. governments assisted Senegal in advancing a major Investors Looking For Projects To Fund – 5mfunding healthcare financing facility. The U.S. government also supported investments in new technologies in Africa and also helped pharmacies in Nigeria and Kenya stock high-quality medicine. This investment could lead to jobs and build long-term relationships between the U.S.A and Africa.
While there are plenty of opportunities to invest in the African stock market it is important to know the market and perform due diligence to make sure that you do not lose money. If you’re a small investor, it’s recommended to invest in exchange-traded funds (ETFs) which are funds that track a diverse array of Sub-Saharan African companies. For U.S. investors, American depositary receipts (ADRs) are a simple way to trade African stocks in the U.S. stock market.