AfricArena predicts funding by African startups in 2018 will crack $1bn
CAPE TOWN - In the wake of the SA Investment Conference that took place last week, AfricArena, Wesgro and Silicon Cape hosted a press conference at the InvestSA One Stop Shop in Cape Town, making public new partnerships for the conference and discussing the role conferences and accelerators like AfricArena play in attracting investment to the continent.
Partech Ventures’ latest annual funding report shows that venture capital funding in 2017 reached $560 million, recording 53% year on year growth. South Africa, Kenya and Nigeria dominate with 6% of total funding. Francophone Africa accelerating with 14% of deal transaction. Financial inclusion (off-grid tech, fintech and insuretech) represents 45% of deals.
The track record shows the trend is that African tech entrepreneurs are raising more and more funding. Yet, the amount of investment going to African tech startups represents less than $50c per capita that goes into funding the future given that the highest employment opportunity is in emerging tech companies, whilst in Europe the investment is $50 per capita in the USA $150. Currently, less than 1% of global tech investment is into Africa whereas on the global scene, in 2017 the USA attracted $74 billion, Asia $71 billion and Europe nearly $18 billion.
“If we are to create the next generation of successful entrepreneurs competing at a global scale – clearly the challenge remains as an input and output measure to increase the level of capita that African startups attract,” states Christophe Viarnaud, chief executive of AfricArena and Methys.
“It is predicted that in 2050 and 2100, there will be more than 50 cities with more than one million people on the African continent, and the majority of the most highly populated cities in the world will be in Africa. This is a very important factor in terms of fundamental underlying trend which is going to drive increasing investment in Africa, therefore we foresee the investment in African tech startups to exceed the $10 billion annual mark in the next decade.”
Based on internal research conducted in 2018, AfricArena, Silicon Cape and Wesgro expect the funding raised by African startups to increase by 100%+, exceeding $1 billion for the first time and achieve $1 dollar per capita, positioning Africa as the fastest growing area in the world.
“Another interesting thing is the emphasis we put on taking our startups to the bigger stages outside of the continent,” adds Danai Musandu, Investment Associate, Goodwell Investments BV, “I find that strange, as you always find more people rushing to go to Silicon Valley to go see where the big stage and the content is. But we need to have a change of perspective and a change of attitude, where people will say ‘We’re going to Africa, where the big stage of the future is’, rather than the other way around where we’re taking startups out of Africa to put them on foreign stages. I think the biggest barrier is our perspective, we need to change that perspective.”
AfricArena is a pan-African ecosystem accelerator whose mission is to help African startups access market and capital. The primary outcome measure is investment deals done around the event.
Acknowledging the importance of such events, Wesgro CEO, Tim Harris, commented: “Hosting prestigious events such as AfricArena is important in endorsing the Cape as the tech capital of Africa. The event is expecting over 100 investors, with Naspers Ventures being amongst those confirmed. Our investment promotion team has helped land over R1 billion in investment in the Cape tech sector over the last five years - as the gateway to the rest of Africa, we hope we can be a conduit to facilitating more investment into the Africa tech start-up scene.”
AfricArena 2018 Announcements
• Over 70 start ups from over 30 countries will attend, competing in 11 open innovation challenges
• In partnership with We Think Code, AfricArena will run a hackathon on a mobility challenge for the City of Cape Town
• EM Lyon, a world-ranked business school, joins as academic partner and will stream AfricArena live on its Casablanca, Lyon and Singapore campuses
• Over 100 investors from US, Europe, Africa will attend or follow on the live streaming of the pitch sessions
• AfricArena announced partnership with Deep Tech platform ‘Hello Tomorrow’ and a Deep Tech Africa challenge that will take place on Day 2
• Silicon Cape members to receive early bird special of 50% off AfricArena tickets
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