Unlocking Africa's VC potential: The power of collaboration in a challenging year

Source: https://www.pexels.com/

Startups struggled as investors pulled back from the market. However, local VCs showed that through collaboration and resilience, co-investing with like-minded partners and working closely with portfolio companies could still result in successful exits.

This is according to Savca CEO, Tshepiso Kobile, who last week welcomed over 200 delegates, including key industry experts, investors, fund managers, and regulators, to the Savca VC Conference 2024.

Under the theme “Synergy with Collaboration”, discussions centred on the evolving funding landscape and highlighted the growing potential for collaboration – not only in pursuing returns but also in better supporting investee businesses.

Africa is ripe for VC opportunity

In a panel discussion on the African VC investment landscape, Natalie Kolbe, Managing Partner at Norrsken22, noted that while the last decade has seen capital flow into Africa increase tenfold, there is still vast room for growth.

Looking at where capital is being invested, Daryn Munnik, Investment Associate at Launch Africa, said that while 85% of all tech seed funding still goes to the “big four” – South Africa, Nigeria, Kenya, and Egypt – other African countries are starting to generate interest.

In terms of funding, Munnik said that African companies are generally asking for far less at a lower valuation, but with high revenue potential.

Emerging trends driving regional VC growth

Shifting the conversation to internationalisation strategies, Kolbe notes that certain country-specific trends have developed.

For African companies looking to grow internationally or move offshore, Kiara Suttner, Partner at HAVAÍC, advises founders to first establish a strong presence in their home market.

A glimpse into the LP mindset

From a Limited Partner’s (LP) perspective, panellist Paula Mokwena, CEO of Fireball Capital, says that greater collaboration between African and international VCs is key to showcasing local businesses on a global stage.

Expanding on the availability of capital, Heleen observed that VCs across the world has seen access to large markets, which we lack, so there is a need to grow quicker. Many institutions currently have capital.

This, coupled with the roll-out of more formalised manager development programmes and institutional investors becoming more aware of impact, position VC well for this growth.