Venture Capital investments have been the saving grace of startups, as most times they fund the entire start-up process from seed fund till the startup starts paying ROI to other investors.
Venture Capitalists funds are mostly gotten in exchange for percentage equity in the funded startup or organization, though these investments are considered risky by a lot of standards.
Venture capital passes these startups through serious scrutinization before investing thereby decreasing the level of failures they are met with.
For startups that need funding, they write and submit letters to these venture capital firms who if the startup meets their criteria will be funded in exchange for equity.
Africa as a continent still has several developing countries and a lot of startups that need funding to survive are emerging.
The prospects of venture capital have slowly but steadily increased in Africa over the years that both local and international investors are populating the investment market.
In Africa, South Africa, Kenya, Nigeria, Egypt and Ghana were named the top five countries to attract VC investments in Africa between 2014-2019, and over six hundred VCs deals were sealed within the same time range.
Five industries in Africa Venture Capitals are investing in:
Financial Industry
Fintech has attracted the bulk of investment in the financial industry with its innovative and scalable blueprint.
It has over the years experienced the highest investment boom and more are willing to invest in a good fintech startup especially as the market is far from being saturated in Africa.
So far, South Africa, Kenya and Nigeria have been leading in the number of fintech startups in their respective countries.
Clean Tech Industry
This is another industry receiving a lot of attention in Africa, as the cleantech involves reducing all the negatives that can potentially cause harm to the environment.
VCs are investing to create renewable energies, solar panels are now being made and used in mass in Africa.
The cleantech industry is slowly gaining ground in Africa as the need to create a clean and toxic environment becomes apparent.
The New Forest company is a VC-funded company that plants trees and sells timber.
Health Industry
COVID-19 did shed light on the shortcomings of the health industry, now fundings from VCs and other bodies are provided for health tech.
Health tech is any integration of technology into health practices that improves health care and promotes general well-being.
Agricultural industry
Agriculture is the basic food production channel in most African countries, therefore it is not misplaced that it is getting the attention it has on.
Agritech is innovative way of integrating technology into agriculture. Both local and International VCs are investing heavily to finance food production.
Data Analytics industry
Data is required by various organizations and individuals at various stages. VCs are investing in both train data analysts and mine data in Africa.
Data is needed to make informed decisions hence the plunge into data research. Africa is one of the continents with no well-documented database, this industry is set to change that narrative for good.
About the Author
Chibuzor Elizabeth Chijioke a graduate of Abia State University is a Nigerian-based entrepreneur and content writer. She trained as a digital marketer at Innovation Growth Hub. She is committed to teaching people how to apply technology to better their lives and businesses. She spends her leisure reading sci-fi and fantasy novels.
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