Highlights of 2018 – what the investors said

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As 2018 comes to a close, at Disrupt Africa, we’re reflecting on an active year in Africa’s startup and investor ecosystem.  2018 has seen the ecosystem develop in leaps and bounds. We’ve seen the most funding flowing into African startups on record; a burst in investor networks launching Africa-wide; and the continent’s top entrepreneurs starting to receiving the attention they deserve.  But what were the highlights? A selection of investors from around the continent give us their take.

Clive Butkow, chief executive officer, Kalon Venture Partners:

“For me, there were three main highlights this year:  the amount of capital being deployed to tech startups both in South Africa and Africa; the interest from international investors to invest in African early stage tech companies; and the rise of angel networks, number of accelerators and other entities assisting startups succeed.”

Tidjane Dème, general partner at Partech, managing the Partech Africa fund:

“It’s a difficult question. So much happened.  But if I try and keep to only three highlights, then first, this was a pivotal year in how fintech took off in volume as well as in scope. While an even larger portion of funding has gone into this space, fintech startups engaged in a more diverse set of opportunities and we are finally seeing really interesting and innovative solutions for SMEs as well as consumer lending, savings, insurance, etc.

In the investment space, there was a crucial development for the long term prospect of the ecosystem: the launch of locally managed funds dedicated to Africa backed by strong LPs (limited partners). Local teams, living on the continent and within the context startups are working in, are more likely to bring valuable networks and insights. They will also diversify the geography and the profile of founders. A more important fact, some of these funds received support from global LPs who have never entered this space in Africa. With these barriers down, more such funds will emerge and this is great news for the ecosystem.  

Finally, significant deals in the Series B and C spaces signal the advent of more mature startups, reaching across borders to create scale.”

Justin Stanford, co-founding general partner, 4Di Capital:

“A key highlight for me has been the increasing interest of foreign investors coming to our shores, looking to co-invest with local investors, and bringing experience, knowledge and international networks and market access. Additionally it is clear the ecosystem continues to mature nicely, as the quality of deal flow is improving and the level of pre-baking in the oven that is taking place (angel investment, mentoring, market testing, prototyping) with early-stage startups is increasing. This improves things for us as institutional investors as we have more fleshed out opportunities to consider.”

Nico Blaauw, director for marketing, Goodwell Investments

“Highlights have been the fast enrollment of digitization of products and services as well as supply chains; convergence – with ever more business models aiming to combine benefits and learning experiences of other sectors and technologies; and pioneering tech businesses from five years ago entering maturity phase and attracting new, larger investors invest in economic growth.”

Yele Bademosi, founder and managing partner, Microtraction:

“For me the highlight was the number of Africa focused funds that were announced, across various stages – this shows an increasing maturity of our ecosystem.”

Andrea Böhmert, co-managing partner, Knife Capital

“In my view, 2018 was a year where the ecosystem matured a lot. Not that it is mature – we are still far away from this. But I have seen some very interesting changes that I believe point towards maturity. Let me elaborate. There is more money available then ever and the money comes in different shapes and sizes. That again, doesn’t mean that there is enough and that it is easy to get funded but it does mean that investors, despite all the doom and gloom, consider Africa to be an investment destination worthy of allocating money to. The larger variety of investors also means that entrepreneurs can now start approaching investors who have a more aligned fit, which should ultimately result in more success stories. So in short, the diversity of money investing in Africa is for me one of the key highlights of 2018.

Another one, also pointing toward the increased maturity of the ecosystem, is the increase in discussions that value substance over hype. There are more talks now about grit, perseverance, and how to deal with challenges then the normal “how to become an overnight success by raising a funding round”. Entrepreneurs are starting to value the journey, and how important it is to have the right partners at your side. And service providers across the board are embracing the concept that you need to start building partnerships early.

Another interesting highlight for me was the second week of September where Cape Town was home to a number of events. Two of them stood out for me, the Learning Indaba in Stellenbosch and the AI Expo in Cape Town. Both brought together the AI community from across Africa, both were overwhelmed by the interest and again, both showcased the quality of quantity Africa has to offer in such a cutting edge science.

Lastly, it is great to see how many South African companies are increasing their reach into other geographic territories, competing on global levels. The likes of Clickatell, Entersekt, DataProphet, Snapplify, Mix Telematics – the list is increasing rapidly and demonstrates not just the maturity of the ecosystem but also the maturity of what our companies have to offer.”

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Inspired and excited by the African tech entrepreneurial scene, Gabriella spends her time travelling around the continent to report on the most innovative tech startups, the most active investors, and the latest trends emerging in the ecosystem.

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