Angel investing in Africa is still in its early days, but it is definitely on the rise. In this Q&A, Disrupt Africa chats to one of the leaders of the angel investor community on the continent – Tomi Davies, president of the Africa Business Angels Network (ABAN), tells us about the progress made so far, and the need to support new angels as they set to work in Africa.
Disrupt Africa: How would you characterise the current state of angel investing in Africa?
Tomi Davies: Angel investing in Africa is still nascent, with the African story starting in Morocco in 2011 when the Maroc Numeric Fund (MNF) set up the MNF Angels. This was quickly followed by Nigeria’s Lagos Angels Network (LAN) and Egypt’s Cairo Angels in 2012.
Since then we have seen the creation of the Cameroon Angels Network (CAN), Ghana Angels Investment Network, South Africa’s Jozi Angels and South African Business Angels Network (SABAN) and Viktoria Angels in Kenya to name a few.
It was the common interest in angel investing on the continent that led the Lagos Angels Network (LAN), Cameroon Angel Network (CAN), Ghana Angel Investment Network (GAIN), Venture Capital for Africa (VC4A), Silicon Cape with the support of the European Business Angel Network (EBAN), the LIONS Africa Partnership and DEMO Africa to create the African Business Angels Network (ABAN) in 2015.
We have noticed an acceleration of angel networks launching in Africa – to what extent are discussions and interest ramping up at your end?
ABAN has grown from the founding group in 2015 to a community of nearly 70 members across over 20 countries. The activities of the Global Entrepreneurship Network (GEN)-based Global Business Angels Network (GBAN) and the World Business Angel Forum (WBAF) have supported ABAN and as I write, we have local angel networks preparing to launch in Uganda, Tanzania, Botswana, Tunisia, Somalia and a few other countries.
What do you think is the catalyst for increased interest or activity in the African angel investing space?
ABAN was created to meet three critical objectives that characterised the vision of the co-founders for angel investing on the continent which are to:
- facilitate the creation of local angel networks in each city in Africa;
- educate Africans with economic capacity on angel investing;
- advocate angel investment as an asset class to African policymakers.
Personally, I would like to believe that the work ABAN and its members and partners have done in the last three years supporting local angel network incubation groups, delivering a curriculum of angel investing Masterclasses and participating in policymaking events across the world has contributed to the increased interest and activity we are seeing today.
To what extent do you see real, substantial deals being done – to a scale which actually has impact?
As a result of these angel groups, local and international venture capital firms, funding for African startups – of which over 70 per cent are generating revenues – jumped by 51 per cent to US$195 million in 2017, according to a report from Disrupt Africa. Countries leading the way in angel investments are South Africa, Nigeria, Kenya, Ghana, Egypt and Tanzania.
Do you see any regional nuances – areas more active than others, more attractive than others?
Well, I’m not sure about more active or attractive but the earlier areas – such as Morocco, Egypt, Nigeria, for example – are definitely seeing more growth in networks and entrepreneur engagement. ABAN is in the middle of a study with the World Bank looking at the angel investment landscape across the continent which should give us further insight into aspects such as this.
What do you think the key emerging themes are for the angel space in Africa this year? What do you think will be important points of discussion at the Africa Early Stage Investor Summit later this year?
What we are advocating is that policymakers provide institutional support to the over 400 innovation hubs across Africa, for working with local angel networks to dramatically grow the number of mentors and advisers available to African entrepreneurs building startups that can create jobs and contribute to economic growth.
One of the key discussion points for November will be how we all collaborate in identifying, educating and supporting capable individuals as business angels who will sustainably partner with the hubs as mentors, advisers and investors for developing the next generation of African entrepreneurs.
Any predictions for the angel space for the rest of the year?
I am expecting to see more local angel networks emerge on the continent as an increasing number of individuals are coming together in groups to invest in early stage ventures using a structured approach that aggregates their capital.