Why Africa-focused investment firms need to become more diverse


The African investment space is relying on “pattern recognition” that excludes, or at least is less favourable to female and African founders, and that needs to change.

That is according to Nnena Nkongho, a principal at VC firm DiGAME, who told the latest episode of Disrupt Podcast that lack of diversity within investment firms themselves was making it less likely that founders from those groups, as opposed to male, expatriate entrepreneurs, would secure investment.

“One key way to remediate this is to have more investors that are from those groups, and who have different networks,” she said. “The challenge is that traditionally Africans and women don’t raise as much money, so their opportunity scope is limited. They have less possibility to support those types of founders because they are less successful in obtaining capital.”

To remedy this, investment firms needed to ensure they become more diverse, employing more women and Africans and plugging into their expertise and networks.

“You hope that existing investment firms recruit, promote and expand the role of women and Africans in their midst. And the other way is that women and Africans found their own firms. Either works. But what doesn’t work is saying that we can’t find people to drive these efforts,” Nkongho said.

Failure to do this would be to do the ecosystem a disservice. 

“Diverse perspective or diverse teams outperform. It is really to our own detriment as a society if we are not able to support entrepreneurial efforts in proportion, at a minimum,” Nkongho said.

Failure to diversify would be a failure from both commercial and moral perspectives – investors are missing out on good businesses, while excluding Africans and women is “ludicrous and wrong”.

“We are missing out on the talents of, in the case of women, half the population, and that seems to me just wrong,” Nkongho said.

Though investment firms need to take action, there is also an extent to which the number of female and African founders raising money will increase as the ecosystem develops.

“Without this concept of giving back, obviously with profit motives aligned to it, ecosystems don’t grow and thrive, so I do hope that as people come up in the ecosystem and it matures we will see more of this circular economy,” said Nkongho.

It will also begin to change as types of capital available in Africa broaden beyond VC, as currently there is not a dedicated LP base for African funds.

The ecosystem is starting to see the emergence of dedicated programmes, especially female-focused ones, and while Nkongho says they have their benefits as they encourage people to get involved and learn valuable skills, they are not the end in themselves.

“Let’s have these programmes, but let’s not lose sight of the primary goal which is to get the right businesses funded by putting people in pipelines and writing cheques. That’s the best way to do it,” she said. 

“I’m all for initiatives that assist people in getting to the right place, but then when people are put up for consideration you want there to be a systemic process that doesn’t downplay their abilities or falsely assess their ability to succeed on not so great criteria.”

The latest episode of Disrupt Podcast is available now, featuring an in-depth interview with Nkongho as well as a deep-dive into the continent’s e-health ecosystem.

You can listen on Soundcloud, Spotify, Apple Podcasts, and all other podcasting platforms.



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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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