There are numerous reasons to invest, but investors should be aware that Africa is a place that tests their patience. The African markets can be volatile and time horizons might not always be a good idea. Even highly sophisticated companies might have to re-evaluate their business plans as Nestle did in 21 African countries in the last year. Many countries also face deficits. These gaps will need to be filled by smart and savvy investors who will bring more prosperity to Africa.
TLcom Capital’s $71 Million TIDE Africa Fund
The latest venture by TLcom Capital was closed at $71 million. The fund’s predecessor was shut in January of this year, and TLcom, Bio, CDC Group and Sango Capital contributed five million dollars. The first fund invested in a dozen tech companies in Kenya, Nigeria, and South Africa. TIDE Africa II will be focusing on East African fintech firms. The investment firm also has offices in Nigeria and Kenya. The portfolio of TLcom is comprised of Twiga Foods and Andela as in addition to uLesson and Kobo360. The investment firm invests between the amount of $500,000 to $10 million for each company.
TLcom is located in Nairobi, south africa a VC company, has more than $200 million under management. The firm’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. The investment firm’s team is comprised of Omobola Johnson, a former Nigerian minister of communication technology.
TIDE Africa is an equity fund that invests in growth stage tech companies in SSA. It will invest between $500,000 and $10 million in companies that are at the beginning of their development with a particular focus on Series A and B rounds. The fund will be focused on Anglophone Africa but it plans to invest in Eastern and Southern African countries. In Kenya, for example, 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 foundation that invests in philanthropy and aims to invest $100-$200 million in India in the next five years. The fund was established by eBay co-founder Pierre Omidyar and has invested $113 million in 35 Indian companies since 2010. The fund invests in the Indian business and consumer internet, as well as financial inclusion. It also has investments in property rights, government transparency, government transparency, and companies that have social impact.
The Omidyar Network’s TEEP Fund makes investments that are designed to improve access and accessibility to government information. It seeks to identify non-profits using technology in creating public information portals as well as tools for citizens. The network believes that having open access to government information enhances the public’s awareness of government processes, and in turn will result in a more engaged society that holds government officials accountable. Imaginable Futures will invest the funds into nonprofit and for-profit groups that focus on education as well as health.
Raise
You should select a company with a focus on Africa if are looking to raise funds for your African startup. One of these companies is TLcom Capital, a fund management company based in London. Its African investments have attracted the attention of angel investors, and the team has raised funds in Nigeria and Kenya. TLcom recently announced the launch of a brand new $71 million fund, which aims to invest in 12 startups prior to them reaching revenue.
The potential of Africa venture capital is being acknowledged by the capital market. Private investors are increasingly seeing the potential for Africa’s growth and don’t need to be limited by institutional investors. This means that raising money is much easier than it was in the past. Raise allows companies to close deals in half of the time and is completely free of institutional restrictions. But there’s no one right method to raise funds for African investors.
The first step is to comprehend the way investors view African investments. Although many investors are attracted to YC hype, it’s essential to think beyond this Silicon Valley giant and the Agenda 2063 of the African Union. Therefore, African entrepreneurs are seeking the YC signal before they approach US investors. A Tunisian venture capitalist Kyane Kassiri recently spoke about the importance of the YC sign when raising funds for African investors.
GetEquity
GetEquity, a Nigeria-based investment platform, was established in July 2021. It aims at democratizing the funding of startups in Africa. It aims to make financing African startups accessible to all through the provision of capital raising tools and world-class capital to all startups. The platform has already helped startups raise more than $150,000 from a wide range of investors. It also has secondary markets for investors to purchase tokens from other investors.
Contrary to equity crowdfunding, investing in companies in the early stages can be an extremely exclusive venture. It is usually only available to the most renowned individual angel investors, capital institutions, and syndicates. It’s not typically accessible to family members and friends. New startups are seeking to change this unwelcome arrangement by making it easier to access funds for startups from Africa. It is available on 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 an option for common investors. With the assistance of crypto funds, investors can invest in African startups for as little as $10. Although this is a modest amount, it’s still a significant amount of in comparison to traditional equity financing. In the wake of the recent demise of Paystack by Spark Capital, GetEquity has developed into a thriving ecosystem for investors who are willing to invest in Africa.
Bamboo
The first obstacle for Bamboo is convincing young Africans to invest in the platform. At present investors in Africa were restricted to a few limited options: foreign direct investment (FDI) and crowdfunding and legacy finance companies. About a third of Africans have invested in any platform. The company is now saying it is expanding into other African countries, and plans to launch in Ghana in April 2021. As of the time of writing, more than 50,000 Ghanaians have signed up on the waitlist.
Africans don’t have many options to save money. The currency is losing value against the dollar because of an inflation of close to 16%. Investing dollars can help you hedge against inflation and falling dollar. One platform that allows Africans to invest in U.S. stocks is Bamboo which has seen 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 accounts starting at $20 once they are registered. Funding can be made through credit cards, bank transfer, and credit cards. They can then trade ETFs, stocks, and stocks and receive market updates. Bamboo’s platform, which is bank-level secure it is accessible by anyone in Africa who has an official Nigerian Bank Verification Number. Professional investment advisors can also make use of Bamboo’s services.
Chaka
Nigeria is a center for legitimate business and investment. The film and entertainment industry in Nigeria is among the biggest in Africa. The country’s expanding fintech industry has led to a boom in startup formations and VC activity. One of the most well-known supporters of Chaka, Iyinoluwa Aboyeji, told TechCrunch that the country’s modern trends will eventually open doors to a brand new group of investors. Chaka also received seed-funds from Microtraction, which is managed by Michael Seibel, CEO of Y Combinator.
The weakening relationship between the US and China has increased Beijing’s interest in African investments. Increasing anti-China sentiment and the trade war have made it more attractive to investors to invest in African companies that aren’t in the US. While Africa is home to a variety of emerging economies, most markets are too small for venture-sized firms. African entrepreneurs must be prepared to adopt an expansion approach and how to get investors develop a cohesive expansion story.
The Central Securities Clearing System oversees the Nigerian Stock Exchange, south Africa making it a safe and secure platform to invest in African stocks. Chaka is free to join and provides an 0.5 percent commission on each trade. Withdrawals of cash on hand can take up to 12 hours. The withdrawal of shares that have been sold, on the other hand can take as long as three days. Both are handled locally.
Rise
The increasing number of investors who are willing to invest in Africa is a good thing for Africa. The economy is stable and its governance is sound, which draws international investors. This has led to an increase in living standards in Africa. Africa is still a risky investment destination. Investors should exercise caution and do their due diligence. There are many opportunities to invest in Africa. However the continent needs to make improvements to draw foreign capital. African governments must work together to create a more conducive business environment and improve the business climate in the near future.
The United States is increasingly willing to support African economies with foreign direct investment. U.S. governments assisted Senegal in advancing a major 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. Such investment can create jobs and help build long-term partnerships between the U.S. and Africa.
There are many opportunities available in the African market for stocks it is crucial to be aware of the market and do due diligence to ensure you do not lose money. If you are a small investor, it’s a good option to invest in an exchange-traded fund (ETFs), which tracks various 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.
