By: Thomas Debass
Picture this: a promising software startup nestled in a humble but hip workspace. It’s founded by young coders with an idea that is poised to provide a breakthrough solution to a major problem experienced in the daily lives of virtual everyone in their community. In fact, the potential of their product goes beyond local community, and offers a means to improve daily life for millions regionally if not globally -- all at the touch of a mobile phone. The entrepreneurs are smart, ambitious, and hard-working. And now they’re ready for serious growth and investment, both financial and human. Is this the infamous Silicon Valley, Paris or Tel Aviv? Actually, it’s Nairobi. Or Lagos. And startups like this are in lots of cities, towns and villages across Africa.
The region boasts some impressive figures: Internet usage in Africa has grown faster than any other continent over the past decade. Mobile subscriptions now number over 700 million, and this is projected to rise to about a billion by the end of 2019. As a result, African tech entrepreneurship is taking on the startup world by storm.
Like most entrepreneurs, growth is difficult to achieve without appropriate access to resources -- not just financial, but business development support and mentorship. Unfortunately, the existing financial infrastructure simply does not meet these needs. But a new type of resource does: meet the rise of the African angel investor -- the business professional closing the financing gap between $10K and $1 million, as well as the mentorship gap by providing hands-on business acumen that takes these startups to the next level.
So with a lens on innovative approaches to ecosystem-building, the LIONS@FRICA partnership, in collaboration with some of its key partners (VC4Africa, DEMO AFRICA, and USAID) and the African Business Angels Network (ABAN), is launching a series of Angel Investor Bootcamps across the continent to help mobilize the early stage investing community, beginning Friday, July 31 in Lagos, Nigeria. Continuing this summer across the continent under the series theme of ‘Unlocking capital for early stage innovation,’ the lessons learned during these events will feed into the program for the second annual Angel Investor Summit during the fourth annual DEMO Africa in September in Lagos.
There is great potential for these angel investors. “At VC4Africa, we list 2500 such companies across 46 African countries. There are more than 600 investors actively investing in the sub-$1 million category. Last year, we tracked 104 transactions for an average investment size of $205K across 26 African countries. In total, that was well above $26 million USD raised. In other words, this is just the tip of this iceberg,” according to Ben White, Founder of VC4Africa.
Initiatives like these are just one part of building the ecosystem, but are crucial to strengthening entrepreneurship. As Harry Hare, Executive Director for DEMO AFRICA, puts it, “The struggle for economic development in Africa is a battle well won if forces are combined. And the need to collaborate and nurture this budding ecosystem cannot be over emphasized. All players -- entrepreneurs, investors, accelerators, incubators, governments and even consumers of technology solutions need to play their role, and Africa will surely rise.”
About the Author: Thomas Debass is the Deputy Special Representative for Global Partnerships at the U.S. Department of State.
This blog post originally appeared on the State Department's Blog, DipNote.