It’s easy to allow MSM to guide our investment sentiment – with #FinTwit often only focussing on #FAANG in the top five tech stocks to watch and invest in. If that’s a new hashtag to you, #FAANG speaks to Meta (formerly Facebook), Apple, Amazon, Netflix and Alphabet (formerly Google). But – in a world that is exploding in the tech startup space, Africa has not missed a beat, and the last two years have seen many unicorns and exceptional growth for our continent.
Last year we shared some updates on the Chinese markets, and as always, our team is looking for where the potential value lies for our clients; we don’t just follow the herd. African tech is taking off, and we found some exceptional commentary on techcruch.com in an article by Tage Kene-Okafor. He covers startups and investment activities in Nigeria and Africa for TechCrunch.
Here are some snippets from his article:
- Fintech opportunity in Nigeria is the largest on the continent. With over 40% of Nigerian adults having bank accounts and digital payments hitting more than $250 billion in 2019, it’s no surprise that the startups facilitating transactions for the unbanked (OPay) and providing gateways (Interswitch and Flutterwave) are now worth more than $1 billion.
- For a long time, Nigeria has been one of the three countries that receive the bulk of local and international venture capital, including Kenya and South Africa. The three countries present Africa’s most connected populace and growing economy; the perfect environment to attract foreign capital before others.
- Egypt stepped into the picture in 2017, and with time, the North African country became part of the “Big Four” as the country began attracting venture capital eyeballs. And after quietly spending the last couple of years at the rear, Egypt picked up impressively in 2020 and this year surpassed Kenya to become the region’s third most active investment region.
- With a large population and impressive GDP per capita, Egypt raised almost $600 million in 2021. While it’s less than what Nigeria and South Africa raised at over $1.4 billion and $830 million, respectively, some observers predict that Egypt will surpass South Africa by 2023 if it keeps up with its pace.
- There are many indicators of how fast venture capital has picked up in Africa. The continent’s startups raised over $4 billion last year and minted five unicorns. No one knows what to expect in 2022, but there’s a nuanced sanguinity that we would see “more of everything”.
Investing is not just about where we invest but also about why we invest. It presents an opportunity to support and uplift massive communities that benefit from the companies and industries receiving the funding. The more we can identify with the positive impact we’re making in the world around us, not just building our own portfolio, the more we can engage with diversifying and sustaining investments that make a difference and support healthy moral and ethical business practices.
If you’d like to know more about our unique investment options, just give us a shout!
(Read the full article from Tage here: https://techcrunch.com/2021/12/30/african-tech-took-center-stage-in-2021/)