There are many good reasons to invest in Africa, investors should know that the region will test their patience. The African markets are volatile and time horizons do not always work. Even the most sophisticated businesses might have to review their business plans as Nestle did last year in 21 African countries. Many countries also have deficits. These gaps must be filled by smart and resourceful investors who can bring more prosperity to Africa.
TLcom Capital’s $71 million TIDE Africa Fund
The latest venture of TLcom Capital closed at $71 million. The predecessor fund was closed in January 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 focus on fintech companies located in East Africa. The investment firm also has offices in Nigeria and Kenya. The portfolio of TLcom is comprised of Twiga Foods and Andela as along with uLesson and Kobo360. The investment firm earns between $500,000 and $10 million for each company.
TLcom, located in Nairobi, a VC company with more than $200 million under management. Omobola Johnson is one of the company’s Managing Partner. He has helped launch more than a dozen tech companies in Africa, including Twiga Foods, and a trucking logistics business. Omobola Johnson (a former minister of technology for 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 and $10 million in companies in the early stages and will 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 philanthropic investment firm that aims to invest $100-$200 million into India in the next five years. The fund was started by eBay co-founder Pierre Omidyar and has invested $113 million in 35 Indian companies since the year 2010. The firm invests in India’s business and consumer internet, as well as financial inclusion. It also has investments in property rights, government transparency, government transparency, and companies that have a social impact.
The Omidyar Network’s TEEP Fund makes investments that are specifically designed to improve access to government information. Its goal is to identify nonprofits using technology to create public information portals and tools for citizens. The network believes that having access to government data increases the public’s understanding of government processes and leads to a more engaged society that ensures that government officials are accountable. Imaginable Futures will invest the money in for-profit and nonprofit organizations that focus on education and investors looking for projects to fund health.
If you’re planning to raise money for your African start-up, you need to choose a company that has a strong Africa-centric focus. TLcom Capital, a fund manager with its headquarters in London is one such company. Its African investments have attracted the attention of angel investors, and the team has raised funds in Nigeria and Kenya. TLcom has announced the launch of a new fund worth $71 million to invest in 12 startups prior to reaching profitability.
The potential of Africa venture capital is increasingly being recognized by the capital markets. Private investors are increasingly recognizing the potential for growth in Africa and don’t have to be limited by institutional investors. This means that raising money is much less difficult than it was in the past. Raise allows businesses to close deals in a fraction of the time and is free of institutional restrictions. There is no single method to raise funds for African investors.
The first step is to learn the mindset of investors regarding African investments. While many investors are drawn to YC hype, it’s essential to consider the bigger picture of this Silicon Valley giant and the African Union’s agenda 2063. As a result, African startups are looking for the YC signal before they approach US investors. Kyane Kassiri is a Tunisian venture capitalist, recently discussed the importance of the YC signal when it comes to raising funds for African investors.
Founded in July 2021, 5Mfunding GetEquity is a Nigeria-based investment platform aimed at democratizing startup funding in Africa. It is aiming to make funding African startups more accessible to everyone by providing capital-raising tools and world-class capital to all startups. It has already helped numerous startups raise more than $150,000 from diverse investors. It also provides secondary markets for investors to purchase tokens from other investors.
Unlike equity crowdfunding investing in companies in the early stages can be an extremely exclusive venture. It is usually only accessible to the most prominent individual angel investors, capital institutions and syndicates. It is not usually available to family members and friends. However, new companies are trying to break this privileged system by increasing access to startup funds in Africa. The platform is accessible on iOS and Android devices and is free to use.
With the launch of its wallet that is based on blockchain technology, GetEquity is making startup investing in Africa a reality for ordinary investors. With the aid of crypto funds investors can invest in African startups for as little as $10. While this may seem tiny compared to traditional equity funding however, it’s an enormous amount of money. And with the recent exit of Paystack by Spark Capital, GetEquity has developed into a thriving ecosystem for investors who are willing to invest in Africa.
Bamboo’s first challenge is convincing young Africans to invest on the platform. In the past, investors in Africa were limited to a few options including foreign direct investment (FDI) or crowdfunding and traditional finance companies. About a third of Africans have invested in any platform. But now the company is expanding into other regions of Africa with plans to launch in Ghana in April 2021. As of this writing, more than 50,000 Ghanaians have signed up for the waitlist.
Africans have few options for saving money. With inflation at around 16% and the currency depreciating against the dollar. In investing in dollars, you can protect against rising inflation and a falling currency. One platform that allows Africans to invest in U.S. stocks is Bamboo which has seen rapid growth over the last two years. Bamboo will be launched in Ghana in April 2021. It already has over 50k users waiting to access.
Investors can fund their accounts starting at just $20 once they’re registered. You can fund your wallet using credit cards, bank transfers or credit cards. After that, they are able to trade ETFs and stocks and receive regular market updates. Bamboo’s platform has a bank-level security so anyone from Africa is able to use it if they have an authentic Nigerian Bank Verification number. Professional investment advisors may also make use of Bamboo’s services.
There are several reasons for why Nigeria is a thriving hub for legitimate investment and 5mfunding business. The Nigerian film and entertainment industry is one of the largest in Africa. The country’s growing fintech industry has led to an increase in the number of startup companies and VC activity. TechCrunch interviewed Iyinoluwa Abodeji. She is one of Chaka’s most prominent supporters. She said that the progress of the country will eventually lead to a new class investors. In addition, to Aboyeji’s 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 deteriorating relationship between the US and China. Increasing anti-China sentiment and the trade war have made it more appealing to investors to invest in African companies that aren’t in the US. The African continent has large, developing economies, but most markets are too small to support venture-sized enterprises. The business owners of Africa should be prepared to take on an expansionist mindset and be locked into a coherent expansion narrative.
The Nigerian Stock Exchange is overseen by the Central Securities Clearing System, which makes it a secure and secure platform to invest in African stocks. Chaka is free to join, and you’ll receive the 0.5 percent commission on every trade. Withdrawals of available cash can take up to 12 hours. In the case of withdrawals of shares sold however can take as long as three days. Both cases are handled locally.
Africa is experiencing positive news due to the increasing number of investors who are willing to invest. Its economy is stable and its governance is solid, which attracts foreign investors. This has raised the standard of living in Africa. However, Africa is still a risky place to invest therefore investors must be cautious and 5Mfunding do their homework. There are many opportunities to invest in Africa however, the continent needs to make improvements to attract foreign capital. African governments must work together to create a more business-friendly environment and improve 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 supported investments in new technologies in Africa and also helped pharmacies in Nigeria and Kenya provide high-quality medication. This investment can help create jobs and investors looking for entrepreneurs foster long-term partnerships between the U.S.A and Africa.
While there are plenty of opportunities in the African stock market It is essential to know the market and do due diligence to make sure that you don’t lose money. If you’re a modest investor, it’s best to invest in exchange-traded funds (ETFs), which are funds that track a diverse range of Sub-Saharan African companies. For U.S. investors, American depositary receipts (ADRs) are a convenient way to trade African stocks in the U.S. stock market.