Local venture capital fund formation is on the rise in Africa, led by Nigeria

TechCrunch | 10/23/2018 | Staff
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Jake Bright is a writer and author in New York City. He is co-author of The Next Africa.

Africa’s VC landscape is becoming more African with an increasing number of investment funds headquartered on the continent and run by locals, according to data from Crunchbase.

Study - Emergence - Venture - Arms - Africans

The study also tracked the emergence of homegrown corporate venture arms and more Africans in top positions at outside funds. These results derived from a year-long project to boost Crunchbase’s Africa data capture and increase awareness of its platform across the continent’s tech ecosystem.

Drawing on its database and primary source research, Crunchbase identified 51 “viable” Africa-focused VC funds globally—defining viable as formally established entities with 7-10 investments or more in African startups, from seed to series stage.

List - Investments

Those who made the list with 7 investments indicated they would reach 10 by early 2019.

Of the 51 funds investing in African startups, 22 (or 43 percent) were headquartered in Africa and managed by Africans.

African - Funds - Percent

Of the 22 African managed and located funds, 9 (or 41 percent) were formed since 2016 and 9 are Nigerian.

Four of the 9 Nigeria located funds were formed within the last year: Microtraction, Neon Ventures, Beta Ventures, and CcHub’s Growth Capital fund.

Research - Viability - Number - Investments - Fund

The research prioritized organizational viability and number of investments over fund and round size. Therefore, the range in typical investment values across the group was wide, with some offering $25K seed investments, and others doing $1 to $10 million rounds at the series A and B stage.

In the group of 51 total funds, TPG’s Growth Fund led the largest round on the continent in 2018 (so far): $47.5 million to Kenyan fintech startup Cellulant.

Round - South - Africa - Jumo - Goldman

This has only been topped by the $52 million round to South Africa’s Jumo, but that was led by Goldman Sachs—which (by the information we have) hasn’t invested significantly in African startups,...
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