After a record 2022, 8 investors explain why it’s ‘still just Day 1’ for Africa's startup ecosystem

Last year was a good 12 months of firsts for African tech startups.

For the first time, the sector attracted over 1,100 unique investors in 2022, which in turn resulted in a record fundraising haul of $6.5 billion, according to data from Partech.

In fact, even some of the excesses of 2021 were eclipsed when the number of investments on the continent rose higher in 2022 than they had a year earlier, boosted by early-stage firms flocking to fund startups in the wake of landmark exits of homegrown companies like Jumia and Paystack.

What drove such volumes when the rest of the world was reining back the collective enthusiasm of 2021? To find out, we polled a few investors who had the highest volume of deals in Africa last year.

It turns out that while later-stage investors, mostly international VC firms, grabbed headlines by writing immense checks, pre-seed and seed-stage investors were instrumental to the growth of the continent’s tech ecosystem.

In Africa, incubators, accelerators, angels and seed investors easily outnumber larger funds — simply because it’s much harder to raise a large fund here. They accounted for more than 70% of the 1,100+ investors that participated in at least one deal on the continent last year.

“This shows that Africa’s investment landscape is still very promising because it continues to grow, and there’s increasing interest in multiple startup ecosystems, including nascent ecosystems. There’s also been an increase in syndicates and investment groups consisting of Africans at home and in the diaspora, as well as an increase in the number of founders of later-stage companies who are now investing in other founders,” said Kola Aina, general partner at Ventures Platform.

“These are all indications of a growing ecosystem,” he added.

However, the investor community also recognizes that there’s still a long way to go and a slew of opportunities left to tap.

“We are slowly building a more durable capital base for African tech. Having 1,000 active investors is not enough,” said Stephen Deng, founder and partner of DFS Lab. “We need thousands of active investors that support the different startup stages, especially on the growth side, offering both equity and debt.”

That said, Africa didn’t go unscathed — several investors noted that they did see deal flow and cadence slow down in 2022 and expect investors to be more careful about who they invest in and at what point.

“We definitely noticed deals were happening slower,” said Karima El Hakim, country director of Plug and Play Egypt.

“A round that would’ve closed in one or two months in 2021 took three or four months in 2022 [ … ] We have definitely seen valuations tighten, and a lot of startups have pivoted into less cash-intensive business models.”

Read on to find out what these prolific investors have to say about hot startup sectors in Africa, investment trends, their predictions for 2023, how to pitch them and more.

We spoke with:

Kola Aina, general partner, Ventures Platform
Zachariah George, managing partner, Launch Africa Ventures
Olumide Soyombo, co-founder, Voltron Capital
Stephen Deng, co-founder and managing partner, DFS Lab
Karima El Hakim, country director, Plug and Play Egypt
Iyinoluwa Aboyeji, founding partner, Future Africa
Maya Horgan Famodu, founder and partner, Ingressive Capital
Kyane Kassiri, partner, RaliCap

Kola Aina, general partner, Ventures Platform

Your firm was among the African investors that wrote the most checks to startups in the seed stage last year. How do you balance writing so many checks and funding the best companies?

We go back to first principles, starting with the core of our thesis. We also have a very wide top funnel such that in 2022, we made initial contact with over 2,500 startups and ideas, and eventually only partnered with less than 1% of that top of the funnel. We also get strong referrals from our community of founders, which improves our signal-to-noise ratio.

There’s a pretty strict house process, regardless of how many deals we do. Over time we’ve continuously optimized that process to ensure we are efficient in how we review deals and how soon we can give founders feedback.

Firms that back a lot of startups are often criticized for not doing their due diligence and labeled lazy for using “spray and pray” tactics. How does this affect the investment landscape? Has this led to unrealistic valuations?

Markets are cyclical — founders and investors adapt to prevailing market conditions. Today, the market dictates a slower and more deliberate pace in the face of global economic uncertainty. This is a development we welcome, as it means that our penchant for due diligence and rigor is now back in vogue. The investment landscape remains unchanged even if things are a little slower; startups with strong fundamentals and good traction will attract capital and do well.

The most active African investors were involved in 15-20 deals, according to a report on African VC activity in 2022. How was that volume of deals possible in a year when investors retreated heavily? Will we see similar numbers in 2023, or will things change?

Despite the gloomy macroeconomic conditions, many investors still believe in what is possible in Africa. We expect to make more investments this year within the context of a few market trends, such as lower valuations, more emphasis on profitability and capital efficiency, more cost reduction initiatives, and opportunities for corporate buyers with strong balance sheets to acquire startups.

“We did see some unrealistic valuations in 2021 — it was almost as if founders forgot how to build with, say, $200,000. I stayed away from such deals.” Olumide Soyombo, co-founder, Voltron Capital

What differences did you notice in the investment landscape in 2022 compared to 2021? Were deals less or more competitive?

For global venture capital, 2021 was an outlier. But last year was when things started to cool down, starting with public markets and then manifesting at the late-stage startup cycle.

The challenging market conditions impacted fundraising — we noticed that, in comparison to 2021, some rounds took longer to close, some founders had to raise less than they initially planned and at more conservative valuations. Sadly, some investors pulled out of deals.

We also noticed an increase in debt funding, which doubled from 2021 to $1.5 billion, which we believe is an indication of the maturity of the ecosystem and the growing/diverse financial needs of entrepreneurs.

Did your investment strategies change along with the current market conditions?

Not really; if anything, we feel the market geared down to where we were: favoring diligence and rigor over speed.

The African tech market in 2022, for the first time, had over 1,100 active investors and saw more deals signed compared to 2021. What does this say about the current state of Africa’s investment landscape?

This shows that Africa’s investment landscape is still very promising because it continues to grow, and there’s increasing interest in multiple startup ecosystems (including nascent ecosystems).

There’s also been an increase in syndicates and investment groups consisting of Africans at home and in the diaspora, as well as an increase in the number of founders of later-stage companies who are now investing in other founders.

These are all indications of a growing ecosystem.

Looking forward, which sectors will you continue to keep an eye on, and which trends do you expect to take off? Why?

We have seven key areas of interest that we remain committed to: financial services and insurance, life science and health tech, edtech and digital talent accelerators, enterprise SaaS, digital infrastructure, agtech and food security.

That said, we follow innovations closely and are open to exploring new verticals. Currently, we’re excited about AI and climate technologies, because they offer an unprecedented opportunity to create a better, more sustainable future for all while ensuring Africa is not left behind.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

Warm introductions are very nice, but not always accessible to every founder; this is why we have a channel for receiving decks through the application link on our website.

The investment team reviews decks and arranges meetings with founders building companies that align with our thesis.

Our thesis is the most important thing founders should be aware of because that’s our initial criteria for screening. We are an early-stage fund that invests in market-creating innovations solving for non-consumption in Africa.

In 2023, we’re looking to invest in more companies in Francophone West Africa, and East and North Africa. We are also looking forward to backing more female-led companies, and we are usually very excited to invest in pre-seed companies.

Zachariah George, managing partner, Launch Africa Ventures

Your firm was among the African investors that wrote the most checks to startups in the seed stage last year. How do you balance writing so many checks and funding the best companies?

We have strong relationships with most of the continent’s leading incubators, accelerators and venture-building studios. We can cherry-pick the top companies graduating from these programs before their demo days, which is a win-win for both the programs and for us.

Similarly, our solid relationships with Series A and Series B VC funds on the continent (and globally) creates an environment where they refer great companies to us that they really like but are just a bit too early stage for them.

Africa accounts for about 17% of the world’s population, around 4% of the world’s GDP, but only about 1% of global venture capital.

This capital funding-economic value-target addressable market arbitrage opportunity is blatant and is constantly being tapped into (and rightly so) by investors who have done their homework.

They understand African technology-driven ventures will continue to grow and scale from:

increased consumer purchasing power.
higher penetration of smartphones.
better digital connectivity through both e-commerce and social commerce.
greater corporate-startup collaboration from a channel distribution and customer acquisition perspective.

I expect to see similar numbers in 2023, and hopefully even better.

What differences did you notice in the investment landscape in 2022 compared to 2021? Were deals less or more competitive? Did your investment strategies change along with the current market conditions?

Last year was definitely a more circumspect and cautious investment landscape compared to the bull run in African VC in 2021. Deals were a lot more competitive in 2021, because some founders were able to raise at often unrealistic valuations.

Often, we were faced with situations where so-called “hot startups” would find multiple funds vying to get on their cap table (a lot of these were funds outside of the continent without a physical on-the-ground presence to do in-person due diligence or through due diligence partners). As a result, local funds may have gotten pushed out of rounds simply because they couldn’t match the terms that founders were getting from international VCs.

In 2022, we saw valuations normalizing to a level more in line with traction and relevant metrics for a particular sector and market.

Our investment strategy has not changed in current market conditions. We typically invest in companies that:

Have graduated from a world-class accelerator/incubator or venture-building program.
Have at least $25,000 in net MRR and are growing at a minimum of 10% month on month. We rarely back ventures that are pre-revenue unless the tech and IP are truly transformational. The $25,000 net MRR is an absolute minimum — our preference is in the $50,000-$100,000 net MRR range.
Are ready to scale outside of their home market within 12 months of our investment. We see a lot of tech ventures that remain in their home markets for far too long.
Are incorporated in the U.S., U.K., Singapore, the Netherlands and other similar investor-friendly jurisdictions. They, in turn, would have a significant majority ownership in the respective local African subsidiaries.
Are ready for a more than $5 million Series A round within six to18 months.

Looking forward, which sectors will you continue to keep an eye on, and which trends do you expect to take off?

Fintech, insurtech, retail tech, supply chain, mobility, logistics, enterprise SaaS, edtech and health tech.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

We prefer referrals through founders in our portfolio for companies that they already work with; good founders refer the best founders, just like good investors refer other smart investors. We consider select companies that our LPs (we have 250+ LPs in our first fund) have either invested in or advised and have strong expertise in their industry, sector, product or region. We also look at top-tier candidates from leading incubators and accelerators that have demonstrated product-market fit already.

We love founders who thoroughly research us, know our investing track record, why we back certain companies and have the wisdom to do comprehensive studies on how they can benefit certain relevant portfolio companies of ours in addition to just being a high investment-return opportunity for us.

Olumide Soyombo, co-founder, Voltron Capital

Your firm was among the African investors that wrote the most checks to startups in the seed stage last year. How do you balance writing so many checks and funding the best companies?

It really is about the velocity of quality deal flow. It all starts from there. Before setting up Voltron Capital, I had invested in several startups as an angel and built a solid reputation as a helpful investor. Founders recommend founders, and most of our deal flow comes from founders within our network. That creates a level of filtering.

I think in “yesterday’s market,” we got to a point where entrepreneurs were no longer afraid to build, which is a good thing. For example, a solid operator in paid employment with a bold idea was sure to some degree that they would get funded.

As our ecosystem matures, we will see more operators take that jump, which will improve the pool of quality companies we can back.

We did see some unrealistic valuations — it was almost as if founders forgot how to build with, say, $200,000. I stayed away from such deals.

Most local investors are active in the pre-seed and seed stages. The slowdown in pre-seed activity hasn’t been as steep as in other areas.

However, we will see more time pass between stages. Founders will need to learn to do more with less to stay alive till they are able to fundraise again.

The first answer is: valuations. We saw some pre-product, pre-revenue, first-time founder companies raising at $10 million pre-money. Surely, that wasn’t sustainable.

My investment strategy is still to be the first check in most companies, based on my assessment of the founder. Quality founders exist in both bear and bull markets. Also, certain problems don’t stop existing just because we are in a bear market — they still need to be solved.

I think African investors have now woken up to startups as an asset class that can be backed, thanks to some exits and secondaries. I still believe it is just Day 1. We have now seen a Black and local fund manager, Ventures Platform, raise over $40 million. Surely that couldn’t have happened five years ago.

Looking forward, which sectors will you continue to keep an eye on, and which trends do you expect to take off? Why?

I study other markets like India and Latin America a lot. If you want to know what our ecosystem will look like in five to 10 years, you can look at those markets today.

We share many things with those markets, and we can see which industries and trends took off there. We still have key infrastructure issues around logistics, talent management, SME solutions, etc., that still need to be solved.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

We get inbound interest from our website and a lot from founder recommendations and co-investors. I back the founder first, so I always say look for what the founder is risking before they ask me to do the same.

Stephen Deng, co-founder and managing partner, DFS Lab

Your firm was among the African investors that wrote the most checks to startups in the seed stage last year. How do you balance writing so many checks and funding the best companies?

It comes down to having strong convictions around what we think will work in the markets we invest in. We invest alongside the perspective that the “digital commerce” stack is where the bulk of the opportunity lies in African tech. Our thesis provides guide rails that allow us to focus on finding the best founders within a narrower set of candidates.

It also helps that we’re able to invest early, often as the first institutional check for a company. That early upside is critical for any venture investor, but it’s especially important if you’re writing a larger number of smaller checks.

The makeup of our team is core to this strategy. The majority are based in Africa and deeply plugged into each ecosystem we invest in.

“Spray and pray” tactics don’t work in Africa. Startup building on this continent is unique, and the market will not hesitate to reject untailored approaches whether you invest in one team or a dozen.

Deep-pocketed investors during the past bull years have certainly pushed some teams toward unrealistic valuations. That will be corrected as speculation gives way to pragmatism in the coming months and years.

Several of our deals were follow-on investments to ensure our existing portfolio had the runway to succeed in leaner times ahead. At the same time, we know the opportunities we’ve identified in Africa’s economy are massive and not going anywhere.

In 2023, I believe most investors are shoring up their existing portfolio and being much more careful about new deals and more sensitive about entry valuation and unit economics. The fintech wave has also slowed down, which has pushed many investors out of their comfort zones, but I do look forward to an increasing diversity of investments by sector.

What differences did you notice in the investment landscape in 2022 compared to 2021? Were deals less or more competitive? Did your investment strategies change in tandem with the current market conditions?

2021 was a world of unbridled activity. We did about half as many new deals in 2022 compared to 2021. The best founders will always have competitive rounds, but overall, competition cooled in 2022.

Our strategy has not shifted given these market changes, as we built DFS Lab with a very realistic view of the maturity of Africa’s VC space. We’ve been talking about an overheated market for years, which turned into warnings in 2021.

I think the slowdown has really highlighted the strengths of our strategy, and we now find ourselves in a place of opportunity.

We are slowly building a more durable capital base for African tech. Having 1,000 active investors is not enough. We need thousands of active investors that support the different startup stages, especially on the growth side, and offer both equity and debt.

We’re also going to need to get much more realistic about the number and average size of potential exits. It’ll take more time, but we’re getting there.

I see that Africa-focused funds led by African teams are starting to mature, and we no longer have to hope for U.S. investors alone to lead rounds. However, I believe a lot of funds that started during the last few years are adjusting to a reality that’s quickly leaving momentum-driven investors behind. We’ll see the best adjust and excel in this landscape.

Looking forward, which sectors will you continue to keep an eye on, and which trends do you expect to take off? Why?

We continue to be investors in Africa’s digital commerce tech stack. This is the stack of tech-enabled products and services that are digitizing how everyday business is done on the continent.

We care deeply about “arterial” sectors like food, raw materials, construction and clothing that underpin the overwhelming majority of each market’s consumption and export budgets.

We believe we’re going to see increased investment in B2B verticals, as B2C continues to be tough to approach sustainably. As we see more companies effectively digitize these big, fundamental value chains, we’ll see adjacent opportunities like fintech open up again. We’ll be keeping a close eye on whether these adjacent opportunities are built in-house or offered through third parties.

Another trend we believe will accelerate is the need to become asset light. Cash-heavy businesses suffer during funding downturns, but companies in Africa, especially those that have a physical component, often need to bootstrap asset-heavy infrastructure to start out.

We’ll be looking out for hybrid approaches that blend both in-house and third-party assets that can find a “Goldilocks” zone of capital and control.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

We review everything that comes through email. Before getting on a call, it helps if founders read some of our writing and can help us understand how their business fits into our digital commerce thesis. If it doesn’t, we’re always open to hearing about why we need to update what we think we know.

Karima El Hakim, country director, Plug and Play Egypt

Your firm was among the African investors that wrote the most checks to startups in the seed stage last year. How do you balance writing so many checks and funding the best companies?

We rely on our ecosystem, which includes three country offices across the continent, and a team in EMEA of over 200 employees with VC experience and a deep understanding of tech and innovation trends. Furthermore, we have a solid network of local and regional investors we regularly collaborate with. All this allows us to take a more nuanced approach when conducting diligence.

Beyond that, our model lets us capitalize on the insights of our corporate partners and validate industry demand for prospective investments. We can conduct due diligence in similar businesses across multiple markets, which helps us validate pain points, roadblocks and overall global excitement in the space.

Early-stage VC funding didn’t get affected by the same slowdown as the Series A and B+ rounds globally. In Africa, it’s even less evident, given greenfield opportunities in vertices like fintech and supply chain solutions, a massive young demographic and a liquidity spillover from the Gulf countries into north Africa.

I cannot speak on behalf of other VCs mandated to invest in Africa, but we are growing the footprint of our open innovation platform in the continent and aim to mirror this strategy with our investments in early-stage African startups.

We hope to see more local and regional players that can help high-growth startups navigate the valley between Series A and growth rounds. We now have an abundance of seed-stage deal flow, and investors with the capabilities to lead Series A onward will play a key role in defining the winners of the next decade.

We definitely noticed deals were happening slower. So a round that would’ve closed in one or two months in 2021 took three or four months in 2022. That said, competitive deals remain competitive; most VCs still had money to deploy, so in the case of good opportunities, investors were willing to move fast.

We have definitely seen valuations tighten, and a lot of startups have pivoted into less cash-intensive business models.

We’ve also seen a lot of currency risk over the past few months, so it’s been important to account for this when looking at new investments.

This says that “growth” is going to be the predominant theme for the years to come. We’ll see growth on a macro level, growth tickets (we should start seeing bigger checks hitting the continent with liquidity spillover from the Gulf region), and hopefully more consolidation and exits that will return capital to LPs and stimulate reinvestment.

We have seen more regional funds from the Middle East look to deploy and expand into key markets like Kenya, Nigeria and Morocco. We believe this is a testament to the growth and maturity of the ecosystem, which is now attracting regional money.

We’ve also seen quite a large number of startups consider expanding into farther markets like Pakistan or UAE rather than immediate neighboring countries. This is an interesting phenomenon, and we’re excited to see how this will affect the path to exit, and potentially look at other markets for IPOs (Saudi [Arabia], UAE, etc.) over the U.S.

Looking forward, which sectors will you continue to keep an eye on, and which trends do you expect to take off? Why?

Fintech and alternative financing solutions will continue to be the top pick for VC investment, both in the early-stage and later-stage rounds. Africa has around 10 unicorns, of which eight are fintechs.

I can also see the health tech and edtech sectors take off, B2C included, given the demographic growth, better infrastructure (bandwidth and smartphone penetration) and higher adoption of technology.

We are also excited about logistics and the rise of some interesting deep tech solutions.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

We like to receive pitches through partner VCs, portfolio company recommendations and through our innovation hubs and commercial deal flows.

We are open to all channels. You can even drop us a note on LinkedIn or via email with a deck that fits our general criteria: tech or tech-enabled business, focus on African market (even if it’s not the right market for our team, we can always redirect to the right office), post-MVP or revenue-generating business, and a lead VC investor commitment.

Iyinoluwa Aboyeji, founding partner, Future Africa

In 2022, we signed 35 deals despite the market conditions because that was part of our investment mandate.

While we have slowed down on making new investments, like the rest of the market, we have managed to shore up the liquidity of our most successful founding teams as tourist capital pulled back. Obviously, considering how we started, we felt it would be wrong not to provide founders with much-needed support.

In 2023, I expect there should be a paradigm shift. After a long time, there is now less access to cheap capital, and while market pullbacks like this are great for funding great startups, you really have to be careful to ensure you are backing painkillers, not vitamins.

In 2021, especially toward the end of the year, there was a lot of frothiness. We definitely felt it, since we are quite valuation sensitive. We learned a lot of good lessons from how heady the market was.

A big lesson was that fundamentals really matter. You will rarely see us value a company at more than 10x revenue. We also look very closely for signs of arrogance and dishonorable behavior, and we take positive and negative references even more seriously.

We used to offer a membership that provided angel investors access to our deal-by-deal syndicates. Even though we lost revenue when we ended the membership, we ultimately stopped it because the economics of those deals made us price takers for “hot companies” even when we considered them a bit overvalued.

We carried a lot of these lessons over to our investment strategy for our next fund. We are going to be writing fewer checks and will be extremely thesis-focused.

The market is maturing very quickly. I believe that’s a good thing because there’s much more activity now. We are now a long way away from 2014, when we begged investors to back companies like Andela.

However, we need to see more depth, segmentation and diversity in investment strategy in Africa’s investment landscape.

This would look like more investment at later stages (we can’t all invest in only pre-seed and seed), more collaboration between investors and opportunities to generate follow-on capital for companies that are scaling.

We need more investors focused on venture debt (like WTI) or on secondaries (like Zanbato). We need to collaborate on our own version of startup accelerators (like Techstars and Y Combinator) so that we don’t need to look outside of Africa for deal flow.

Looking forward, which sectors will you continue to keep an eye on, and which trends do you expect to take off? Why?

Our next fund will be focused on early-stage businesses that enable African youth to contribute to global GDP by participating in the digital economy.

We have a very clear sense of the kind of businesses these will be, which, beyond fintech, will include:

New and scalable approaches to enable talent-acquisition skills for remote jobs.
Data-driven infrastructure that helps our young workforce participate in the global economy.
Businesses built on research that helps Africa at scale adopt more sustainable approaches to agriculture, manufacturing, energy and mobility.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

Founders should be able to answer why they want to work with us specifically. We provide much more than capital, so we want to hear more details about why you want us as a partner on your cap table.

We receive pitches exclusively via introductions these days. We used to allow anyone to reach out and send us additional information via a form, but we’ve learned that this can open up legal risk.

Now, it’s really a test of founders’ resourcefulness and whether they can find someone in our network who can connect us. We also occasionally reach out to founders who are doing the work we like.

Maya Horgan Famodu, founder and partner, Ingressive Capital

Most investment firms leverage the power rule: Twenty percent of your investments will yield your target returns. To improve the odds, a more extensive portfolio is needed.

That said, every company does diligence differently. Valuations are typically driven by demand and supply: If there’s excess capital (supply) and a limited number of tech companies (demand), the price goes up (valuations) and vice versa.

In the current market, supply is limited, so I envision valuations adjusting to current market conditions.

It’s simple: This is Africa. We still have many problems that need to be fixed, and Africans are leveraging tech to solve African problems.

I believe there will be more scrutiny regarding diligence and a focus on liquidity to validate the African success story. Deal quantities will be driven by available capital in the market.

It’s essential to note that funds need to return gains within a specific time to limited partners — the sooner you deploy capital, the longer your runway.

Looking forward, which sectors will you keep an eye on, and which trends do you expect to take off? Why?

I see the fintech space evolving to deliver more financial products to B2B and B2C markets. I am keeping an eye on the health care, agriculture, logistics and edtech sectors.

We’re looking at agriculture and logistics because food security is a real problem for the growing global population; health care is important given the relatively untapped market, and edtech is based on the younger population’s ability to consume information, especially now that knowledge is more accessible to consumers than ever before.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

We empathize with founders running fundraising processes — it’s mentally tasking, stressful and draining, especially when founders just want to build. So, we’ve implemented a new system on our website this year to make the process seamless, efficient and timely.

As for what they should know, founders should be able to answer this question: How significant is the problem you want to solve?

Kyane Kassiri, partner, RaliCap

Your firm was among the African investors that wrote the most checks to startups in the seed stage last year. How do you balance writing so many checks and funding the best companies?

RaliCap is both a fund and a collective.

On the fund side, we have raised a blind pool vehicle from fintech VCs. In fact, more than 15 VC firms represent the largest chunk of our LP base.

The RaliCap Collective is the backbone of our fund machine. It is composed of more than 180 strategic fintech operators like VISA, Mastercard, Stripe and many others. They help us source deals extremely early on, fast-track the due diligence process and support our portfolio companies with hands-on work.

It is only because of our focus on our two subverticals (fintech infrastructure and commerce enablement) and our community-first, operator-led approach to investing that we are able to make educated bets at high velocity.

Foreign VCs pausing their Africa strategy clearly changed the fundraising dynamic on the continent. African investors got their leverage back, and valuations cooled down.

We’ve been doing deals at valuations of $2.5 million, $3 million, $3.5 million and $5 million lately. We’re bullish on the current entry price opportunity. Markets will recover and prices will rise again in the next few years. In the meantime, our LPs (mostly VCs) will fuel up our winners. It’s a convenient setup and the timing is lucky.

Beyond the number of active investors, one of the key metrics to assess the health of a tech ecosystem is the AUM available to fuel its winners.

We have come a long way from solely relying on foreign funding a few years ago to now witnessing the blossoming of our local growth champions such as TLCom, AfricInvest, Partech, Novastar, Norssken22 and Algebra.

We’re still early in the maturity cycle but are directionally correct. The next phase of market validation will happen through a wave of successful exits, which is right around the corner.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

Founders can reach out to us via Linkedin or Twitter. We answer 99% of our inbound emails. For Linkedin and Twitter, due to the enormous amount of DMs, we only answer when the company is highly relevant to our thesis.

Before reaching out to us, the founder should know that we invest anywhere from the idea stage to pre-seed, but prefer the idea-stage. It’s never too early to come speak to us, even if you’re still looking for a co-founder. If you wait until you’re properly ready for an institutional round, you might be too late for us. We want to be your partners in the company-building journey.