For most people around the world, Silicon Valley is either an American comedy television series created by Mike Judge, John Altschuler and Dave Krinsky, or a region in the southern San Francisco Bay Area of Northern California which serves as a global center for high technology, innovation and social media.
But unknown to many, another Silicon Valley is taking shape in Africa, thousands of miles away from San Jose, Palo Alto, Santa Clara, Mountain View, and Sunnyvale in California.
The only difference is Africa’s Silicon Valley is still in the early stages. At least, that’s what over 300 active and aspiring investors representing Africa’s early stage investing ecosystem thought when they gathered recently for two days in Cape Town, South Africa, for the Africa Early Stage Investor Summit organized by VC4A and ABAN.
The summit, now in its fifth year, attracted the highest ever number of early stage African investors from over 35 countries.
“It was the largest and most successful summit we have run with over 60 speakers participating in 7 panels, 4 investor masterclasses, 3 keynotes, 2 roundtables and 1 fireside chat,” said Ben White, CEO of VC4A.
“It’s amazing to see this industry rise in Africa. The passion and commitment shown by speakers and participants alike to partner with entrepreneurs to unlock the continent’s opportunities demonstrates how much there is to still achieve and I have no doubt that this ecosystem will prosper,” White added.
Participants representing 110+ investor organizations gathered to share expertise, experiences, and foster collaborations to bolster the ecosystem of capital provision for African entrepreneurs.
In the end, they all reached the same conclusion: Africa’s Silicon Valley is possible and is taking shape but challenges around capital, collaboration and investments should quickly be addressed.
The summit came not long after the Africa Investment Forum weeks ago in Johannesburg also in South Africa.
The Africa investment forum was attended by at least seven heads of state and governments, as well as a thousands more people.
The aim was the same: How to attract more investments into Africa, support business and entrepreneurs to build the Silicon Valley of tomorrow.
At the Africa Early Stage Investor Summit, participants seemed to agree that there was hope but also challenges.
According to many, to turn Africa into a booming business hub, collaboration would be required to build a thriving industry, and in designing instruments and financing structures tailored to African ventures.
For that to happen, investors must be activists in attracting more capital and resources into African markets, especially from larger corporates, growth equity investors and development finance institutions (DFIs). This will only be achieved by a resourceful human capital and diverse teams.
Africa’s Silicon Valley may still be in early stages, in building alliances, attracting investments, and in forging ideas, but many factors seem to indicate that Africa is ripe for a business revolution.
This is especially true, because in the coming decade, Africa will hold the majority of the global youth population, bringing a wealth of opportunity and innovation.
But for now, Africa still seems to be a place where many investors come, invest and exit.
This is because as Keet van Zyl from Knife Capital put it “it is easy to invest money in Africa right now, but it is hard to make money in investing here. The key is to be exit centric – we only invest in entrepreneurs who are focusing on building sustainable businesses that can exit.”
But having conversations around business and investments and entrepreneurship “succinctly captures the challenges venture capital faces in Africa and why we need to keep working to strengthen and support the entire African venture ecosystem,” said Ben White, CEO of VC4A.
And there are already many steps being taken and many things happening.
For instance, one key announcement at the Summit came from Nikunj Jinsi from IFC Venture Capital that the World Bank Group has launched L’Afrique Excelle, a program to showcase the best startups from Francophone Africa. The program, following the first XL Africa cohort, will target and select high growth business in order to provide much needed support to the region’s nascent ecosystem.
“With the conversations around the current lack of resources availed to Francophone Africa, and the importance of public-private partnerships, having frequently surfaced in the Summit sessions, this news was highly welcomed and appreciated by all in attendance,” said White.
While still in the early days, angel investors are experimenting across the continent and seeking ways to professionalize within their home markets.
ABAN president Tomi Davies presented “Finding Product/Market Fit: The State of Angel Investing in Africa” – a first ever scoping study by ABAN in partnership with infoDev/The World Bank Group on angel investing in Africa. The ABAN network has grown from 5 to 80 active networks and it is important to now have research that captures this emerging investor segment.
Babajide Sodipo, Regional Trade Adviser with the African Union, announced a new partnership between the AU and ABAN formalizing their joint ambition in supporting entrepreneurs and SME’s across the continent.
“It’s great to see so many connections being made. More importantly we are excited by the level of engagement. Now is the time to take an active role and to be part of the next great African success story. We invite all actors and stakeholders to join the conversation,” said David van Dijk, ABAN Executive Director.
Africa’s Silicon Valley is taking shape but the world isn’t paying attention.
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