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Monday, Feb 17th

No Silicon Valley for Africa say early stage investors

No Silicon Valley for Africa say early stage investors

Silicon Valley will not be replicated in Africa, diversity in human capital is key to success.

These were two central takeaways from the Africa Early Stage Investor Summit hosted in Cape Town South Africa recently and organised by investment ecosystem platform VC4A and pan-African not-for-profit organisation the African Business Angel Network (ABAN).

According to organisers, though there are lessons to be learned from Silicon Valley, African VC faces unique constraints in scale, capital and exit opportunities.

"Rather than spend time 'unicorn hunting,' investors should push founders to build profitable, sustainable, and locally-adapted businesses," reads a statement by the organisers.

The message to the 110+ investor organisations from 25 African nations attending the Summit was that more collaboration is needed in designing instruments and financing structures tailored to African ventures.

Moreover, the issue of access to talent and diverse skill sets was underpinned as being key to success going forward.

"In the coming decade, Africa will hold the majority of the global youth population, bringing a wealth of opportunity and innovation. Yet accessing strong talent and building diverse teams remains a stark challenge for most ventures. Investors want to see more female and locally-led organizations with thoughtful human capital strategies," noted the organisers.

Keet van Zyl from Knife Capital said: "It is easy to invest money in Africa right now, but it is hard to make money in investing here. The key is to be exit centric - we only invest in entrepreneurs who are focusing on building sustainable businesses that can exit."

Ben White, CEO of VC4A says, "This conversation succinctly captures the challenges venture capital faces in Africa and why we need to keep working to strengthen and support the entire African venture ecosystem."

Babajide Sodipo, Regional Trade Adviser with the African Union (AU), announced a new partnership between the AU and ABAN formalising their joint ambition in supporting entrepreneurs and SME's across the continent.

David van Dijk, ABAN Executive Director added: "It's great to see so many connections being made. More importantly we are excited by the level of engagement. Now is the time to take an active role and to be part of the next great African success story. We invite all actors and stakeholders to join the conversation."

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