There are many reasons to invest in Africa investors should be aware that the continent will test their patience. The African markets are unstable and time horizons don't always work. Even the most sophisticated companies might need to adjust their business plans, as Nestle did in 21 African countries in the last year. Many countries also have deficits. It will take bold and resourceful investors to fill these gaps and bring more prosperity to Africans.
TLcom Capital's $71 Million TIDE Africa Fund
The latest venture from TLcom Capital has closed at a reported $71 million. The fund's predecessor was shut in January of last year. TLcom, Bio, CDC Group and Sango Capital contributed five million dollars. The fund's first investment was in more than a dozen tech companies from Kenya, Nigeria, and South Africa. TIDE Africa II will be focusing on East African fintech companies. The investment firm has offices in Kenya and Nigeria. TLcom's portfolio comprises Twiga Foods and Andela as along with uLesson and Kobo360. The investment firm makes between $500,000 and $10 million in each company.
TLcom is a Nairobi-based VC firm with more than $200 million in under management. The firm's Managing Partner, Omobola Johnson, has helped launch over a dozen tech companies across the continent including Twiga Foods and a trucking logistics company. The team of the investment firm includes Omobola Johnson, who was the former Nigerian minister of technology and communication.
TIDE Africa is an equity investment fund which invests in growth stage tech companies in SSA. It will invest between $500,000 and $10 million in companies in the early stages with a focus on Series A and B rounds. The fund will be primarily focused on Anglophone Africa but it plans to invest in Eastern, and Southern African countries. In Kenya, for example, TIDE has invested in five high-growth digital companies.
Omidyar's $71 Million TEEP Fund
The Omidyar Network is a US-based charitable investment firm that hopes to invest $100-$200 million in India over the next five years. Pierre Omidyar, co-founder of eBay established the fund and has invested $113 million in 35 Indian companies. In India the company invests in entrepreneurship, consumer internet financial inclusion, government transparency property rights, and businesses that have social impact.
The Omidyar Network's TEEP Fund makes investments that are designed to increase access to government information. It is a way to identify non-profits using technology to build public information portals and tools to citizens. The network believes that having open access to government information improves citizens' awareness of the government's processes, which will result in a more engaged society that holds officials accountable. Imaginable Futures will invest the money in for-profit and nonprofit organizations focusing on education and health.
Raise
If you're planning to raise money for your African startup, it's best to look for a company with an African-centric focus. One of these companies is TLcom Capital, a fund management firm that is based in London. Its African investments have caught the attention of angel investors, and the team has raised funds in Nigeria and Kenya. TLcom has announced the launch of a new fund of $71 million to invest in 12 startups prior to reaching profitability.
The capital market is increasingly aware of the potential of Africa venture capital. More private investors are recognizing the potential of Africa for growth and are not subject to the same restrictions as institutional investors. This means that raising money has never been simpler. Raise enables businesses to close deals in half the time and is completely without institutional limitations. There's no perfect way to raise funds for African investors.
The first step is to comprehend how investors think about African investments. While many investors are drawn to YC hype, it's crucial to consider the bigger picture of this Silicon Valley giant and the African Union's agenda 2063. Therefore, African startups are looking for the YC signal before approaching US investors. A Tunisian venture capitalist Kyane Kassiri recently spoke about the importance of the YC signal when seeking funds for African investors.
GetEquity
GetEquity, an investment platform based in Nigeria, was founded in July of 2021. Its goal is to make the process of funding startups in Africa. It aims to make funding African startups accessible to all by providing capital-raising tools and world-class capital to all startups. It has already helped numerous startups to raise more than $150,000 from diverse investors. It also offers secondary markets for investors to purchase tokens from other investors.
Like equity crowdfunding, investing in companies in the early stages can be an extremely exclusive venture. It is usually only available to the most prominent individuals angel investors, capital institutions, and syndicates. It is not accessible to family members and friends. However, new companies are making an effort to challenge this exclusive arrangement by making it easier to access startup funding in Africa. It is available on both Android and iOS devices. It is free to use.
The GetEquity's cryptocurrency-based wallet is available to investors. This makes it possible to invest in startups from Africa. With the assistance of crypto funds, investors can invest in African startups starting at just $10. Although this is a modest amount, it's still significant money compared to traditional equity financing. And with the recent exit of Paystack by Spark Capital, GetEquity has grown into a powerful ecosystem for investors looking to invest in Africa.
Bamboo
The first obstacle for Bamboo is convincing young Africans to invest on the platform. Investors in Africa had limited options prior to the present including crowdfunding, foreign direct investment (FDI) as well as legacy finance companies. Only about a third have invested in any platform. However the company claims it's expanding into other parts of Africa, with plans to launch in Ghana in April 2021. More than 50.000 Ghanaians are on the waiting list at the time of writing.
Africans don't have many options to save money. The value of the currency is declining against the dollar because of an inflation of close to 16%. A dollar investment can help protect yourself from inflation and the decline of the dollar. Bamboo, which has seen rapid growth over the past two years, is a platform that allows Africans invest in U.S. stock options. Bamboo plans to begin operations in Ghana in April 2021, and has more than 50,000 people waiting to be able to access.
Investors can fund their accounts starting at $20 after they have been registered. You can fund your account using credit cards, bank transfers, or credit cards. Then, they can trade ETFs and stocks and receive market updates. Since Bamboo's platform is bank-level secure and safe, it is able to be used by anyone in Africa who has a valid Nigerian Bank Verification Number. Bamboo's services can also be used by professional investment advisors.
Chaka
Nigeria is a major hub for legitimate business and investment. The Nigerian film and entertainment industry is one of the largest in Africa. The country's growing fintech ecosystem has resulted in a boom in startup formations and VC activity. TechCrunch interviewed Iyinoluwa Abodeji who is one of Chaka's most prominent investors. She stated that the nation's progressive tendencies will eventually lead to new investors. In addition to the investment of Aboyeji, Chaka has also secured seed-funds from the Microtraction fund which is headed by Y Combinator CEO Michael Seibel.
The weakening relationship between the US and China has increased Beijing's interest in African investments. The trade war, along with the rising anti-China sentiment has made it more attractive for investors to consider investing outside of the US to invest in African companies. Although Africa is home to many emerging economies, the majority of these are too small for venture-sized firms. African entrepreneurs should be ready to adopt an expansion-minded approach and develop a cohesive expansion story.
The Central Securities Clearing System oversees the Nigerian Stock Exchange, making it a secure and safe platform to invest in African stocks. Chaka is free to join and has an 0.5 percent commission for each trade. Withdrawals of available cash can take up to 12 hours. Refunds for shares that were 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 good news for Africa. Its economy is stable, and its governance is solid, which attracts foreign investors. This growth has increased the standard of living in Africa. However, Africa is still a dangerous investment destination, so investors must be cautious and do their homework. There are plenty of opportunities to invest in Africa, but the continent needs to make improvements to attract foreign capital. African governments must work together to create more business-friendly environment and enhance the business climate in the coming years.
The United States is increasingly willing to support African economies with foreign direct investment. U.S. governments assisted Senegal in advancing a significant healthcare financing facility. The U.S. government also helped to secure investments in new technologies in Africa and also helped 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 many opportunities to invest in the African stock market It is essential to be aware of the market and carry out due diligence to ensure you don't lose money. If you're a modest investor, it's a smart idea to invest in an exchange traded fund (ETFs), which tracks an array of Sub-Saharan African businesses. American depositary receipts (ADRs) are issued by the United America, allow you to trade African stocks on the U.S. investors looking for projects to fund stock exchange.