“The African startup ecosystem is now mainstream, and venture capital is on its way to becoming the number one asset class on the continent.”
That is the view of Ceasar Nyagah, investment officer at Partech Africa, which is itself one of the most active VC firms on the continent. Founded in Silicon Valley in 1982, Partech now has a team spread across offices in Paris, Berlin, San Francisco and Dakar, and its Partech Africa Fund achieved a final closing at EUR125 million (US$143.5 million) early last year.
The firm is an investor in the likes of MoneyFellows, TradeDepot, Gebeya and Kudi, with Nyagah saying Partech has so far invested in 10 African companies across six countries in sectors such as financial services, informal retail, customers support, logistics, education and health.
He said Partech likes startups that solve the continent’s fundamental problems.
“We like entrepreneurs that seek to solve the difficult but massive problems the continent faces,” Nyagah said.
On a personal note, Nyagah started his career in investment banking before moving into sell-side advisory.
“I then worked in operations before moving to the investor side of the table, initially in private equity and now in VC. I see myself as having come from helping companies raise money to looking to give them money,” he said.
He was attracted to working in VC because of the increased attention the African startup space was receiving.
“The attention had always been there but this time you could see that the ecosystem was getting to interesting levels of maturity, indicated by the amount of money being allocated to the space,” said Nyagah.
“The environment in terms of infrastructure like mobile and internet penetration was ready in addition to a large demographic that was tech savvy. As luck would have it, the opportunity arose to join a team that had been doing this for a long time. Since then it’s been a joy to work with Partech and to meet so many great entrepreneurs across the continent.”
Funded by a mix of DFIs, HNWIs and corporates, Partech’s Africa fund is mostly agnostic in terms of sector, but looks for major impact. Its sweet spot is Series A and B, and it invests across the continent. Nyagah said it brings more to the table than just cash, however.
“In fact, we only invest if we can bring more than just capital,” he said. “We are very active in opening doors for startups within our networks. We are also very involved in strategic planning and share our experiences with entrepreneurs as they seek to solve the continent’s most pressing problems.”
More investors are joining Partech in backing African tech, with Nyagah saying more dedicated funds were being raised by traditional players investing on the continent.
The “fly in, fly out” way of doing things is reducing, and investors are setting up to have boots on the ground,” he said.
Nonetheless, Partech still believes that early-stage financing is lacking on the continent.
“That is rapidly changing but we do need more pre-seed and seed investors within an enabling ecosystem for startup survivability,” said Nyagah.
From a Partech perspective, the plan for the future is more of the same.
“We will continue to seek out entrepreneurs and teams looking to solve the biggest challenges on the continent and building relationships and partnerships with them to support their ambitions,” he said.