StartupCon 2019 - Funding Trend in Africa

Here is an insightful deep-dive session by Ingressive Capital on the funding trend in Africa at the StartupCon 2019.

Ingressive capital is a leading seed-stage VC which helps to fund the next upcoming African innovators.

“In addition to being one of the few active seed-stage VCs in the region, Ingressive Capital (IC) leverages its global network to assist with growth and scale. They plug startups into new major clients, new investors, talent, and provide financial support.

Through IC’s network of limited partners (investors in their fund) including those who runs Y Combinator, Techstars, WTI and over 10 other top funds and accelerators, they help companies get follow-on funding from abroad.

Their sister company, Ingressive LLC, serves top international tech businesses and investment funds seeking to enter and operate across Sub-Saharan Africa, or support / acquire local startups.

Ingressive has served more than 50 global firms and investors who have gone on to make over 30 investments in the region. Ingressive LLC also holds a network of technical talent including 10,000 developers and designers. This work is leveraged to support portfolio companies as well.”

The Opportunity Assessment

Ingressive Capital invests in regions that benefit from peaceful political transitions, government-backed connectivity initiatives, and increasingly business-friendly regulations and tax incentives.

Africa holds more mobile users than the US and UK combined at 650 million. Sub-Saharan Africa anticipates mobile penetration to reach 93% by 2020. Africa holds the world’s fastest-growing middle class with consumer spending set to hit $1.4 trillion by 2020.

3 of the world’s fastest-growing economies by GDP, youngest consumer demographics with an estimated 41% of its 1.2 billion people under 15 years; and 75% of the population under 35 years.

Funding History – At A Glance

In the year 2016, there was funding of around USD 120 9.1 million into 146 companies
In the year 2017, USD 560 million was pumped into 124 companies
2018 marked the investment value crossing a billion dollars. USD 1.92 billion was pumped into 454 companies.

Some globally famous VCs are tapping the potential of the African startup ecosystem. It includes Andreessen Horowitz, Social Capital, Greatcroft, Partech Venture, Google Developers Launchpad, Facebook, Tiger Global, CAA, TPG, IFC, WTI, and many more.

Ecosystem News

Uber buys Careem for $3.1 Billion
Nigeria’s Jumia lists on the New York Stock Exchange
New exit opportunities come to light in local markets as we observe successful listings in local markets; MTN Nigeria Communication Ltd. listed in May 2019 reaching a valuation of $5.54 billion within the first 20 mins of trading indicating increased local investor engagement
Nigeria’s fintech, Interswitch, to plans dual listing in Nigeria and on the London Stock Exchange with an anticipated $1.5 Billion valuation
Egypt’s fintech, Fawry, launched on Egyptian Stock Exchange and were oversubscribed 30x
Match Group, the parent company of Tinder has acquired Harmonica, an Egyptian dating app focused on the Muslim demographics
Mobile phone tower operator, Helios Towers is reportedly reviving plans for an initial public offering. It is considering filing for the share sale sometime this year at a possible valuation of US$3 billion
Top players in the transportation space recently raised significant funding: ○ Gokada -raised $5.3m backed by Yamaha ○ ORide – raised $50m backed by Chinese funds, Sequoia China, Source code capital, etc.
Max.ng- raised $7m backed by Adventure Capital

Ingressive Capital – Launch And Activities

Ingressive was launched in 2015 to drive funding, mentorship and tech resources to Sub-Saharan Africa. 50+ clients to date having done 30+ deals in West Africa.

In 2017, with many of the clients and partners from Ingressive, Ingressive Capital was launched. It was established as a fund to provide the portfolio companies with access to international accelerators, incubators and growth funds through LP base.

Below is what Ingressive Capital has to offer:

Democratized Funding – Access via an online application, origination partners, and Ingressive community initiatives
Biz Dev & Partnerships – Through Ingressive initiatives and their investor network, proven access for founders
Follow-on Funding – Their limited partners and advisors run top global incubators, accelerators, and funds
Talent – Community of over 10,000 developers and designers and growing