The surge in international interest in Africa is driving up the venture capital industry in the region.
This was revealed during the second African Private Equity and Venture Capital Association’s (AVCA) 18th Annual Conference.
Tokunboh Ishmael, co-Founder and Managing Director of Alitheia Capital said that the sudden interest in Africa’s thriving VC sector is a decisive opportunity to learn from Africa’s evolving private equity ecosystem over the years.
“There is still much to learn from African PE. We have the investors and skill to solve some of the continent’s most pressing problems,” she said.
The Venture Capital (VC) in Africa summit on convened over 500 leaders in the private equity (PE) and venture capital industry to discuss emerging trends and strategies to maintain sustainable growth of VC investment in Africa.
Advocating for knowledge exchange and deeper collaboration in a growing industry, she noted that Africa VC sector has become a recognised and distinguished investment class.
“Let’s use the insight and expertise that has catalysed success across geographies to unlock the scale and growth of more bright ideas and ambitious companies leaping us further into the future,”
This comes in the backdrop of a decrease in East Africa’s investments in startups.
A latest Venture capital report indicated that the funding for local startup enterprises declined by more than 50 percent in 2021, with deal activities falling by two percent, largely due to the impact of new restrictions imposed by governments to tame the spread of the third wave of the Covid-19 pandemic.
African Private Equity and Venture Capital Association (AVCA) shows that the value of funding raised by East African entrepreneurs as a proportion of total deal value in Africa fell by more than half to seven percent ($364 million) in 2021 from 18 percent ($900 million) in the seven-year period (2014-2020).
Maurizio Caio the Founder and Managing Partner, TLcom Capital, says that it is important that we focus on how to make sure that the ecosystem’s growth is healthy.
“Let’s turn the excitement from capital deployment into an impetus that makes sure global capital investors see VC in Africa as the destination to go to. More PE investors should allocate capital to VC,”
A conversation exploring the concept of unicorns harked back to 2021, a year that saw a record four African start-ups reach billion+ dollar valuations.
In a panel bringing together global perspectives speakers addressed the market drivers for Africa’s continued attractiveness to international investors, the rising diversification of actors in Africa’s VC ecosystem, and the spread of corporate venture capital supporting new and dynamic entrepreneurial ventures in Africa.
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