According to Quartz, African startups raised a record $725.6 million across 458 deals in 2018. While the exact proportion that came from Angel investors is unclear, it’s still particularly impressive considering early stage investment is relatively new on the continent and as our research with the World Bank last year found, 70% of African early stage investors have been funding startups for less than 5 years.
Through our work at the African Business Angel Network (ABAN) , we’ve been tracking and monitoring the growth of angel investor groups supporting African entrepreneurs for the last few years and there is absolutely no doubt in my mind that Africa is developing what potentially could become the most vibrant and innovative early stage entrepreneurship ecosystem on the planet.
The first thing to appreciate is that Africa is urbanizing faster than any other region in the world, with our cities gaining 24 million people per year. This puts the predicted number of Africans living in cities up to 187 million within the decade.
It’s a well known fact that Africa currently has 60% of the world’s unutilized but arable cropland, as well as the world’s largest reserves of critical minerals including vanadium, diamonds, manganese, phosphate, platinum-group metals, cobalt, aluminum, chromium, and gold.
In addition, digital penetration of the internet through mobile phones (smartphone ownership in Sub Saharan Africa will reach 500 Million by 2020) is transforming the entire business landscape of the continent. From finance to retail, power to health care, transportation to education all are becoming tech-enabled in one way or the other.
This combination of factors are all transformative in nature with the single biggest contributor to Africa’s future development that I personally find most exciting being the young working-age population and growing labor force expected to reach 1.1 billion by 2040 surpassing China and India.
Although there are no African companies in the Fortune 500, there are currently over 400 African companies with annual revenues exceeding $1B. African companies grow faster and with more profits than their global peers and 2018 saw 30 African startup ventures joining…