African startups increasing inclusion, and catering to feature phones hold a lot of potential; while South Africa remains the easiest market for investors in Africa, said panellists at the inaugural AHUB.
A panel of investors at the inaugural AHUB held during this year’s AfricaCom conference were asked to give their views on exciting trends and sectors to watch in the continent’s entrepreneurial ecosystem.
“We don’t like following trends, but it seems like a lot of money is going into fintech. The follow-on rounds are easier to get there,” said Wayne Gosling, co-founder of Team Africa Ventures.
“We’re very excited about the health space. We think there’s a lot of money to be made there, and of course it has the social element,” said Eric Edelstein, chairman of Entrepreneur Traction.
“Base of pyramid solutions. Increasing inclusion, whether that’s financial, health, etcetera,” said Oliver Drews, chief executive officer (CEO) of Clifftop Colony.
For her part, Loren Treisman, executive of Indigo Trust, said solutions catering to the prevalence of feature phones across Africa deserve more attention.
“One thing I think a lot of people are ignoring is applications depending on ‘dumb phones’. “If you want to talk about inclusion, that is where to start,” Treisman said.
“Sometimes it’s a small profit per user because incomes are low, but the market and potential is still massive,” she said.
Turning to the question of which African markets are most attractive, the panellists concurred that South Africa remains the easiest market in which to be an active African investor.
“There’s a lot more low-hanging fruit in South Africa. So if you we do want to expand into other markets, we do it through a South African startup,” said Manuel Koser, founding partner at Silvertree Capital.
“Nigeria and Kenya are very difficult markets. There are great entrepreneurs, but nonetheless the markets are very difficult to navigate […] Why bother,” Koser said.
“The way I see this African tech entrepreneurship story evolving is around the four tech hubs, but those four hubs are very different markets,” said Drews.
“I think Kenya, because it is driven by the US capital market, will go a slightly different way than Joburg or Cape Town. Nigeria is a market of huge deals. So the four hubs will go slightly different ways, and that makes it more difficult to collaborate,” he said.