Africa's startup investment scene takes a plunge
Africa has over the years enjoyed a seamless and flourishing startup industry with the free flow of top investments. However, the scene has seen low turnovers for startups in recent years.
Between 2019 and 2021, investments in the African startup landscape saw an increase from $1.3 billion to $4 billion. This was a result of worldwide interest and low interest rates.
In 2023, however, investments reduced to $2.27 billion just like pre-2016. This is highlighted by Eghosa Omoigui from EchoVC according to a report filed by Africanews.
An explanation given by the former UN Chief Innovation Officer, Dr. Gabre-Madhin, suggests that the African venture capital is going through the mill due to the unavailability of domestic sources. Hence, she advises the building of sturdy investment hubs in Africa to maintain startups on the continent.
"The most important structural issue is that the base of venture capital in Africa is almost entirely foreign investment," she said.
Additionally, Dr. Gabre-Madhin took the initiative and launched the Timbuktoo Fund at the World Economic Forum (WEF) in Davos earlier this year, which opens African tech entrepreneurs up to $1 billion.
"One of the most important initiatives... is to mitigate single-country risk by going across borders as soon as possible," she said as she expanded that it will take the unity of multiple African countries to see a change in the venture capital landscape.
