There are numerous reasons to invest, however investors need to be aware that Africa is a place that tests their patience. The African markets can be unstable and time horizons may not always be a good idea. Even sophisticated businesses may need to re-evaluate their business plans, like Nestle did in 21 African countries in the last year. Many countries also have deficits. It will require brave and resourceful investors to bridge these gaps and bring greater prosperity to Africans.
TLcom Capital's $71 Million TIDE Africa Fund
The latest venture of TLcom Capital closed at $71 million. The fund's predecessor shut down in January of this year. TLcom, Bio, how to get investors CDC Group, and Sango Capital contributed five million dollars. The first fund invested in 12 tech companies in Kenya, Nigeria, and South Africa. TIDE Africa II will concentrate on East African fintech companies. The investment firm also has offices in Nigeria and Kenya. TLcom's portfolio comprises Twiga Foods and Andela as in addition to uLesson and Kobo360. Each company is worth anywhere from $500,000 to $10 million.
TLcom is a Nairobi-based VC firm with more than $200 million under management. The company's managing partner, Omobola Johnson, has helped establish more than a dozen tech companies across the continent including Twiga Foods and a trucking logistics company. Omobola Johnson (a former minister of technology and communication in Nigeria) is part of the team of the investment firm.
TIDE Africa is an equity investment fund that invests in growth-stage tech companies in SSA. It will invest between $500,000 to $10 million in early-stage companies, with a focus on Series A and II rounds. While the fund will concentrate on Anglophone Africa, it plans to invest in Eastern and Southern African countries, too. TIDE, for instance, has invested in five high-growth digital companies in Kenya.
Omidyar Network's $71M TEEP Fund
The Omidyar Network is a US-based philanthropic investment firm that aims to invest $100-$200 million in India over the next five years. The fund was created by eBay co-founder Pierre Omidyar and has invested $113 million in 35 Indian companies since the year 2010. In India the company invests in consumer internet, entrepreneurship, financial inclusion, transparency in government property rights, as well as companies that have a social impact.
The Omidyar Network's TEEP Fund invests in projects that improve access to government information. Its objective is to identify nonprofits using technology to create public information portals and tools for citizens. The network believes that open access to government data increases the public's knowledge of government processes and creates an engaged society that holds government officials accountable. Imaginable Futures will use the funds to invest in for-profit and non-profit organizations that focus on healthcare and education.
Raise
It is important to choose a firm with a focus on Africa if are looking to raise capital for your African startup. TLcom Capital, a fund manager based in London, is one of these companies. Its African investments have attracted the attention of angel investors, and the company has raised funds 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 seeing the potential for Africa's growth and don't have to be limited by institutional investors. This means that raising funds is much less difficult than it was in the past. Raise helps businesses to close deals in half the time and is free of institutional constraints. There's no single best method of raising funds for African investors.
The first step is to learn the way investors view African investments. While many investors are drawn to YC hype,
5mfunding it's essential to be aware of the broader implications of this Silicon Valley giant and the African Union's agenda 2063. African companies are now searching for the YC signal to make contact with US investors. A Tunisian venture capitalist Kyane Kassiri has recently spoken out about the importance of the YC sign when raising funds for African investors.
GetEquity
Founded in July 2021, GetEquity is an investment platform based in Nigeria that aims at democratizing startup funding in Africa. It aims to make funding African startups easier for everyone by providing capital-raising tools and world-class capital for all startups. It has already helped numerous startups get more than $150,000 in funding from diverse investors. Additionally, it provides a secondary market for investors to purchase other investors' tokens.
Contrary to equity crowdfunding, investing in companies in the early stages can be very exclusive. It is typically only accessible to the most prominent individuals angel investors, capital institutions and syndicates. It is rarely available to family members and friends. New companies are trying to change this exclusive arrangement by making it easier to get funding for startups in Africa. The platform is accessible on iOS and Android devices and is free to use.
With the introduction of its wallet that is based on blockchain technology, GetEquity is making startup investing in Africa feasible for all investors. Investors can invest as low as $10 in African startups using crypto funds. While this may seem like an insignificant amount relative to equity funding traditionally, it is still an enormous amount of cash. With the recent exit from Paystack by Spark Capital GetEquity has become an effective platform for African investors who want to invest in Africa.
Bamboo
The first hurdle for Bamboo is convincing young Africans to invest in the platform. In the past investors in Africa were limited to a handful of options including foreign direct investment (FDI) or crowdfunding and traditional finance companies. In fact, less than one-third of the population has invested in any platform. The company is now saying it is expanding into other countries in Africa, with plans to launch in Ghana in April 2021. More than 50.000 Ghanaians are on the waitlist as of this writing.
Africans have limited alternatives for saving money. With inflation running at nearly 16% and the currency depreciating against the dollar. It is beneficial to invest in dollars to protect against 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 last two years. Bamboo plans to launch in Ghana in April 2021 and has more than 50,000 users waiting for access.
Once they have registered, investors can cash in their wallets using as little as $20. Funding can be done through credit cards, bank transfer, and credit cards. They can then trade stocks and ETFs and receive market updates. Bamboo's platform, which is secure at the bank level it is accessible by anyone within Africa who has an official Nigerian Bank Verification Number. Professional investment advisors may also make use of Bamboo's services.
Chaka
Nigeria is a major hub for legitimate business and investment. Nigeria's entertainment and film industry is one of the largest in Africa. The country's expanding fintech sector has resulted in an explosion in the number of startups and VC activity. TechCrunch spoke with Iyinoluwa Abodeji, one Chaka's most prominent investors. 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.
The deteriorating US-China relationship has increased Beijing's interest in African investments. The trade war, as well as rising anti-China sentiment, make it more attractive for investors to look outside of the US to invest in African companies. Although the continent of Africa has many developing economies, most markets aren't big enough for venture-sized companies. The owners of businesses in Africa must be ready to adopt an expansion mindset and to lock in a consistent expansion story.
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,
5mfunding and you will receive an 0.5 percent commission per trade. Cash withdrawals that are available take up to 12 hours. Withdrawals of sold shares however could take up to three days. Both are handled locally.
Rise
Africa is receiving positive news due to the rise in investors looking to invest. The country's economy is stable and its governance is sound, which attracts foreign investors. This has raised the standard of living in Africa. However, Africa is still a risky place to invest and investors must exercise caution and due diligence. There are numerous opportunities for investment in Africa however, the continent needs to make improvements to draw foreign capital. African governments must collaborate to create a more conducive business environment and improve the business climate in the next few years.
The United States is increasingly willing to aid African economies by facilitating foreign direct investment. In 2013, U.S. governments helped to develop a major healthcare financing facility in Senegal. The U.S. government also helped get investment in the latest technologies in Africa, and helped pharmacies in Kenya and Nigeria have access to high-quality medicines. This investment could create jobs and help build long-term partnerships between the U.S.A and Africa.
While there are plenty of opportunities available in the African stock market it is important to be aware of the market and conduct proper due diligence to ensure you don't make a loss. If you are a small investor, it's best to invest in exchange-traded funds (ETFs) which are funds that track a diverse range of Sub-Saharan African companies. American depositary receipts (ADRs), which are issued by the United States, make it simple to trade African stocks on the U.S. stock exchange.