June 21, 2024


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Rwanda, Zambia, and Uganda Emerge as Millionaire Magnets for Angel Investors, Fueling a Startup Renaissance

New dollar-millionaire hubs like Rwanda, Zambia, and Uganda are now the go-to spaces for Africa’s angel networks as they actively seek out wealthy investors to revive startup activity in high-value sectors.

By Conrad Onyango, bird story agency

One of Africa’s biggest business angel networks is building specialised hubs for millionaires and creating small, themed networks of investors as it works to expose wealthy business people to the potential rewards of funding startups.

The Africa Angel Academy, which has over 400 “angels” (high net worth investors) spread across 17 countries, is set to train 100 new investors from Rwanda, Uganda, Tanzania, Ghana, and Zambia in August.

The 13-week programme, backed by the Dutch Good Growth Fund (DGGF) and The Dutch Entrepreneurial Development Bank (FMO), will expose investors to learning events, networking opportunities, deal flow and mentorship.

“The outcomes of this effort is a greater volume of angel investments and a more conducive early-stage finance sector for African entrepreneurs” the Academy stated on its website.

According to Disrupt Africa’s Startup funding data, the number of African startups closing deals has dropped significantly and funding dropped by 52.4% to US$ 1.19 billion in the six months to June 2023, after years of steady growth.

In 2022, 303 African tech startups banked US$2.27 billion in the first six months of the year.

The continent started witnessing a slowdown in the first quarter when funding to startups fell by 57.2%. This mirrored a global trend that saw venture capital funding plunge by 49% year-on-year, due to an economic downturn, according to S&P Global Market Intelligence data analysis.

The fintech sector, Africa’s darling over the past few years, was particularly hard hit, with global funding rounds registering a 64% drop from H1 2022.

“The global economic slowdown impacted fintech funding trends across all regions, but the impact was relatively severe in Europe, the Middle East and Africa, with investments targeting fintechs dropping by 75% to $4.28 billion,” said S&P Global analyst Sampath Sharma Nariyanuri.

Another angel investor group, the Africa Business Angels Network (ABAN), with angel investors in over 35 African countries and the diaspora, recently partnered with Rwanda Finance Ltd (RFL) to elevate investor awareness and help entrepreneurs access investment opportunities.

Rwanda Finance has been mandated to transform Rwanda into an international financial destination for investors seeking opportunities across the African continent.

“By combining our resources and networks, we aim to establish a formidable platform that supports early-stage investments and expedites the growth of African startups,” said ABAN Secretary General Fadilah Tchoumba in a joint statement.

ABAN has also added two new thematic angel networks targeting startups in the continent’s Smart Cities and Digital Trade sectors. Last year the association launched Climate Smart Agriculture and Clean Technology angel networks to increase funding for these sectors.

The African Angel Investment Survey 2022 by research firm Briter Bridges shows fintech, agriculture and agri-tech, logistics and supply chains as the most preferred sectors by business angels.

“60% of Angels prefer backing high-growth ventures that are scalable and have proven business models. Companies that generate revenues are usually perceived as less risky investment,” according to the survey.

Brighter Bridges researchers show that while angels mostly find startups through personal networks, the majority (41%) find angel networks and syndicates to be effective routes to investment compared to own (23%) direct investments.

Investment consultancy firm Henley & Partners, in its Africa Wealth Report 2023, lists Uganda, Rwanda and the Democratic Republic of Congo among African countries that have witnessed the highest growth in dollar millionaires since 2012. The millionaire numbers in these countries, as well as Zambia and Namibia, are projected to grow by at least 60% by 2032.

In Kenya, telecoms operator Safaricom has been given the go-ahead by shareholders to provide venture capital to local startups. The mobile operator will create two subsidiaries that allow it to invest in seed-stage and growth-stage startups and will launch a startup call for applications in the coming weeks.

“We will be looking to invest in and support early-stage companies especially in emerging technologies such as analytics, Machine Learning, Artificial Intelligence, and the Internet of Things,” Peter Ndegwa, Safaricom CEO, said.

S&P Global shows venture capitalists are increasingly attracted to startups deploying frontier technologies like artificial intelligence (AI).

bird story agency



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