The Number of Local Venture Capital Funds in Africa is on the Rise and Nigeria is in the Lead

By October 26, 2018 Investment News

The number of venture capital funds with headquarters in Africa and with Africans in leadership positions is on the rise, according to a new report by TechCrunch.

The report, drawn from data on Crunchbase, the investment and funding information platform, shows that there are “51 ‘viable’ Africa-focused VC funds globally”.

Of the 51 VCs, 22 have headquarters in Africa and are managed by Africans. Furthermore, 9 of the 22 funds were formed since 2016 and 9 of them (41%) are from Nigeria. Microtraction, Neon Ventures, Beta Ventures, and CcHub’s Growth Capital fund are four of the Nigerian VCs that have been formed in the last year. Ventures Platform and EchoVC are the Nigerian funds with the most investments, with 23 and 20 respectively.

Other highly active funds from the pool of 51 include Musha Ventures with 36 investments in African startups, Singularity Investments with 18, and Golden Palm Investments with 17.

Another trend noted in the report is the gradual increase of Africans in leadership positions of VC funds based outside the continent. Nigeria’s former Minister of Information and Communication Technology, Omobola Johnson is a senior partner at TLcom Capital’s $40 million fund. Yemi Lalude is Managing Partner of TPG Growth’s $2 billion Africa fund. And Tidjane Deme is a General Partner at French VC firm, Partech which has raised $70 million for its Africa fund.

In 2018, South African startup, Jumo, has raised the most capital with $52 million in a round led by Goldman Sachs and Kenyan fintech startup, Cellulant, raised $47.5 million in a round led by TPG’s Growth Fund.

Safaricom’s Spark Venture Fund is the only corporate venture arm that made Crunchbase’s list of 51 VCs.

Earlier in October, soko Insights released a report saying that there were about 207 private equity firms doing business in Sub-Saharan Africa. According to Asoko Insight, South Africa is the main target of investment on the continent with 39% of the total offices set up by these investment firms. Kenya comes second with 14% and Nigeria is third with 13%.

Source: Pulse