There are many reasons to invest, however investors need to be aware that Africa is a place that tests their patience. The African markets are unstable and time horizons may not always work. Even the most sophisticated businesses might need to revise their business plans, just as Nestle did last year in 21 African countries. Many countries also have deficits. These gaps will need to be filled by smart and savvy investors who can bring greater prosperity to Africa.
The $71 million TLcom Capital's TIDE Africa Fund
TLcom Capital's latest venture has been closed at an estimated $71 million. The predecessor fund closed in January of last year. Five million dollars were donated by Sango Capital, Bio, CDC Group and TLcom. The first fund was invested in tech companies in Kenya and Nigeria. TIDE Africa II will concentrate on East African fintech firms. The investment firm also has offices in Nigeria and Kenya. The portfolio of TLcom includes Twiga Foods and Andela as in addition to uLesson and Kobo360. The investment firm invests between $500,000 and $10 million for each company.
TLcom is a Nairobi-based VC firm with more than $200 million in under management. Omobola Johnson is one of the firm's Managing Partners. He has helped establish more than a dozen tech companies on the continent, including Twiga Foods, and a logistical trucking 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 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 focus on Series A and B rounds. Although the fund will focus 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 $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 over the next five years. Pierre Omidyar, co-founder of eBay was the fund's founder and has invested $113 million in 35 Indian companies. In India, the firm invests in entrepreneurship, consumer internet financial inclusion, transparency in government property rights, as well as firms with social impact.
The Omidyar Network's TEEP Fund makes investments that are designed to improve access to government information. Its mission is to identify nonprofits that utilize technology to develop public information portals and tools for citizens. The network believes that open access to government information enhances citizens' awareness of the government's processes, and in turn creates a more involved society that holds government officials accountable. Imaginable Futures will use the funds to invest in non-profit and for-profit companies that focus on healthcare and education.
Raise
You should select a company that is Africa-centric if you are looking to raise capital for your African startup. TLcom Capital, a fund manager based 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 announced the launch of a new fund of $71 million to invest in 12 startups before they reach profitability.
The appeal of Africa venture capital is increasingly being acknowledged by the capital market. Private investors are becoming increasingly aware of the potential of Africa's development and don't need to be restricted by institutional investors. This means that raising money is much more simple than it was in the past. Raise helps businesses to close deals in a fraction of the time, and is free from the restrictions of institutions. But there's no one right method of raising funds for African investors.
The first step is to comprehend how investors think about African investments. While YC hype is appealing to a large number of investors It is crucial to consider more than the Silicon Valley giant and Agenda 2063 of the African Union. African companies are now searching for the YC signal to 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 founded in July 2021. Its goal is to make the process of funding startups in Africa. It wants to make financing African startups accessible to the common man by providing world-class capital raising tools to any startup. The platform has already helped startups raise more than $150,000 from a variety of investors. In addition, it also offers a secondary market to investors to purchase other investors' tokens.
Like equity crowdfunding investing in companies in the early stages 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 or friends. However, new companies are working to change this privilege by democratizing access to startup funding in Africa. The platform is accessible on iOS and Android devices and is completely free to use.
GetEquity's blockchain-based wallet is now accessible to investors. This allows investors to invest in startups in Africa. With the aid of crypto funds investors can invest in African startups starting at just $10. Although this is a modest amount, it's still a significant amount of amount of money when compared with traditional equity financing. With the recent departure of Paystack by Spark Capital, GetEquity has transformed into a robust ecosystem for investors looking to invest in Africa.
Bamboo
Bamboo's first hurdle is convincing young Africans to invest on the platform. Until now investors in Africa were limited to a few options that included foreign direct investment (FDI) and crowdfunding and old finance companies. A mere third of the African population has invested on any platform. The company has announced that it is expanding into other African countries, and 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 few options to save money. The currency is losing value against the dollar due to an increase of nearly 16%. 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 business funding has experienced rapid growth over the past two years. Bamboo plans to begin operations in Ghana in April 2021 and already has over 50,000 users waiting for access.
Investors can fund their accounts starting at $20 after they have been registered. Funding can be done through credit cards, bank transfers, and payment cards. After that, they are able to trade ETFs and stocks and receive regular market updates. Bamboo's platform is secure at the bank level and dependable, it can be utilized by anyone in Africa who can provide an authentic Nigerian Bank Verification Number. Professional investment advisors are also able to use Bamboo's services.
Chaka
Nigeria is a center for legitimate business and investment. The film and entertainment industry is among the largest in the world, and the country's growing fintech industry has resulted in an increase in startup formation and VC activity. TechCrunch interviewed Iyinoluwa Abodeji, one of Chaka's most prominent backers. She stated that the nation's progressive tendencies will eventually lead to investors of a new class. In addition to the Aboyeji investment, Chaka has also secured seed-funds from the Microtraction fund which is managed by Y Combinator CEO Michael Seibel.
Beijing has been more interested in African investments due to the declining relationship between the US and China. The trade conflict, as well as rising anti-China sentiment, make it more attractive for investors to look outside of the US to invest in African companies. The African continent is a huge, developing economies, but most markets are too small to support venture-sized companies. African entrepreneurs must be prepared to adopt an expansion perspective and build a coherent 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, and you'll be paid the 0.5 percent commission on every trade. Cash withdrawals are able to take as long as 12 hours. Refunds for shares that were sold on the other hand, can take up to three days. In both instances, the cash for sold shares is settled locally.
Rise
Africa is seeing positive news due to the increasing number of investors who are willing to invest. The economy is stable and its governance is solid, which attracts international investors. The growth has boosted the standard of living in Africa. Africa is still a risky investment area. Investors must be cautious and conduct their own studies. There are plenty of opportunities for investment in Africa, but the continent must improve its infrastructure to draw foreign capital. African governments must work together to create a more business-friendly environment and improve the business environment in the next few years.
The United States is increasingly willing to aid African economies through foreign direct investment. In 2013, U.S. governments helped to develop a major healthcare financing facility in Senegal. The U.S. government also helped secure investment in new technologies in Africa and assisted pharmacies in Kenya and Nigeria stock high-quality medicine. This investment could create jobs and create long-term partnerships between the U.S.A and Africa.
There are numerous opportunities available on the African stock exchange. However, it is important to know the market and conduct your due diligence to avoid losing money. If you're a small investor, you should invest in exchange-traded funds (ETFs), which are funds that track a diverse array of Sub-Saharan African companies. American depositary receipts (ADRs) are issued by the United States, make it simple to trade African stocks on the U.S. stock exchange.