Are the days of the African unicorn numbered?


Hopes of seeing an African unicorn on the horizon have been floated around for years, but increasingly, investors are changing their focus.  The emerging consensus is that Africa needs to forget about “mythical” unicorns, and focus on building more successful local companies.

The latest blow to much discussed African unicorn came at the Africa Tech Summit Kigali in February, in a panel session exploring the investment environment in Africa “from seed to scale”.  Panelists were asked whether an African unicorn can be expected in the near future.

The unanimous answer? No.

Stephen Gugu, founder and director of Viktoria Ventures summed up the unicorn challenge: “For you to get to the point where you have a unicorn, in Africa, you would have to scale to several markets.  And that comes with various frictions – regulations, infrastructure, as examples.  So I don’t really see unicorns coming out.”

To go further, some felt that the obsession with unicorns is irrelevant in Africa.  

What is more important is building more well-performing companies continent wide, said Collins Onuegbu, director of the Lagos Angels Network.

“Why does everyone push for unicorns?” he asked. “It’s a mythical creature.”  

“There’s a lot of very successful companies [which aren’t unicorns], we need to build more of those,” Onuegbu said.

The days of the African unicorn may well be numbered, as investors on the continent increasingly call for the mythical creature to be forgotten.

In November last year, panelists at the African Angel Investor Summit held in Cape Town suggested a new focus for investors in Africa: the “gazelle” – startups that have seen strong revenue growth over a sustained period.

Keet van Zyl, partner and co-founder of South African VC firm Knife Capital, went on to write this guest post on the topic.

“While I am all for stretch goals and would love to see some African unicorns in the club, the endless pursuit of unicorn status at the expense of building sustainable companies is not constructive for the ecosystem. Unicorns aren’t real, and neither are the valuation expectations of many local startups that believe they will be worth over US$1 billion within five years. I’d rather back some scalable high-growth gazelles on their path to sustainability or exit,” van Zyl writes.

We started 2018 with a call to action from Tomi Davies, president of the African Business Angels Network (ABAN), who said “Now is the time to invest in Africa”.

Setting out his tips on angel investing on the continent, Davies returned to the land of gazelles when touching upon what expectations angels should have (… revenue share, rather than exits).

“Africa has gazelles that yield 20 per cent month-on-month growth year after year, not unicorns,” he said.

Do we still hope to catch a glimpse of the African unicorn one day? You bet.  But for now, the legend seems set to lose some of its infamy in favour of the creatures we can already see for real – the gazelles, which will multiply in numbers with the right funding and support.


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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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