According to a tech report, 311 companies in Africa secured a combined US$491M in 2019 with Nigeria and Kenya emerging as the premier investment destinations attracting US$122M and US$149M in funding respectively.
This growth is not surprising considering that funding is probably the most important component for a startup especially if the intent is to grow quickly, for faster development, better marketing, or sales.
There’s no doubt that without a reliable funding source in place, startups will struggle to receive significant traction, develop next-generation products, hire top tier talents, and more.
I recently had a chat with David Van Dijk co-founder of the African Business Angel Network (ABAN) on Tech Trends where he sheds more light on how we can improve funding for the African tech ecosystem.
CFA: David, glad to have you on the show today.
David: Thank you CFA. I’m delighted to be on the show.
CFA: Interestingly, you’ve been here in the ecosystem for a very long time. How has the experience been pre-Covid, post-Covid, and today? What are your thoughts?
David: So, that’s an easy question. 2020, in many ways, is almost a confusing year because, on the one hand, we have these headline-making assets, we have record-breaking deals, we have more money coming into the ecosystem than ever before.
At the same time obviously, we read the news about startups having insufficient funds, working capital. So, there’s a lot of mixed signals in terms of what COVID has brought in 2020.
Overall, I’m extremely positive and it feels that this year is almost like a coming of age for the ecosystem. We’re simply doing more deals, and the access we’ve been kind of waiting for. So, yeah, I’m very positive about what’s happening.
CFA: You and your platform have played a role in the evolvement of the ecosystem across the continent. How would you rate the ecosystem you see today?
David: The ecosystem today is not like five or ten years ago. A lot of things have happened. We’re definitely at a stage where things are professionalizing, both the startups, the founders, and the investors have become more active.
At the same time, it feels like we’re only scratching the surface. There’s so much more that can be done, that has to be done. So, really it’s important to give every promising, innovative founder an opportunity to start or grow a company.
CFA: I like the fact that you used the phrase “has to be done”. So tell me, what’s the technology investment landscape like today?
David: I think that there are enormous opportunities. I think that the increase in the number of investments and an increase in the size of investments illustrate or demonstrate that people see the opportunities across the continent.
You could definitely argue that the majority of investments go to a handful of countries. So, they’re leading the way and other countries are catching up if you will. I think that if Covid has shown us one thing, it’s that the future is digital.
You can watch the full interview here.