This photo is from Picture Perfect. Check out their blog!
If I take a step back, I realize things are moving faster than ever before. Hard to imagine we opened the iHub the first quarter of 2010 and to see where this community is today. Where we had four or five labs online (which seemed incredible at the time) there are now more than 50 and counting (73 according to the AfricaHubs website). At the same time we have seen an explosion in startup activity from across the African space. More promisingly, however, is that we have not only seen the numbers of ventures increase over time, but their quality is higher than ever before.
For specific examples, look at the quality of ventures coming out of the Meltwater Entrepreneurial School of Technology (MEST) in Accra or the Nailab in Nairobi. I think both programs are proving that the combination of capital, skills development and mentorship can be quite powerful. The ventures that emerge from these programs are polished, the entrepreneurs know their story and are gaining traction with their services in the marketplace. As these ventures continue to scale they will require growth capital and this is where we see a growing number of investors starting to engage the space. At the same time, the likes of PagaTech (Nigeria), Umuntu (Zambia), KopoKopo (Kenya) and the recent announcement of Mxit’s acquisition of Motribe (South Africa) start to form a beaten path for new generations of entrepreneurs to follow. Visa’s acquisition of Fundamo being another major milestone. Indeed, the last two years has been fueled by a ‘if we build it they will come’ mentality.
As the depth and quality of ventures continues to improve we see the spectrum of capital mature. Certainly impact investors have moved into the space. This includes firms like Invested Development, Kitendo Capital, LGT Ventures, the Mara Foundation, Grassroots Business Fund, Acumen Fund and Village Capital to name but a few. There are more commercially minded investors too. Think of an African technology focused firm like eVentures Africa or country/region specific investors like EchoVC Partners (Nigeria), the Savannah Fund (Kenya/East Africa) and Knife Capital (South Africa). Then you have firms like Adlevo and Intel Capital.
These investors take advantage of increasing public sector support from African governments. A key example is the Venture Capital Trust Fund Facility in Ghana. There are also unique organizations like Hivos, Indigo Trust and Omidyar Network that are willing to step forward to support ecosystem development. Successful multinationals like Google Africa work to support the budding network of incubators and look at the wide variety of actors coming together as part of LIONS Africa, a public private partnership that brings together organizations like Nokia, Microsoft, infoDEV and the US State Department. These ‘behind the scene’ efforts have been critical to realizing the gains achieved these last two years.
We have reached a point where almost not a week goes by that we don’t read about the launch of a competition or fund in one of the key African capitals. As Silicon Valley, New York and Boston attract most of the attention in the US, we can expect the same to happen in Africa. That said, the quality of innovators we know in places like Togo or Somaliland are often on par with any we have met from across the continent. We need to extend the ecosystem needed to engage the brightest individuals wherever they are. Certainly more can be done to connect the growing experience, knowledge and network increasingly available. Bringing together foreign and local capital remains a key area of focus moving forward.
That said, I think the 40 ventures selected to launch at the first ever DEMO Africa conference helps to highlight where we are today. Don’t get me wrong, there is an incredible amount of work ahead of us, but things are certainly moving in the right direction. Next week the DEMO Africa conference will mark yet another step forward, a major showcase of the entrepreneurial talent building great and innovative companies across the continent.
Join us next week at the VC4Africa meetup in Nairobi and connect with these innovators at DEMO Africa!