Unlocking Africa’s potential: Investor Day at Africa Tech Festival spotlights VC strategies and impact investing
Most of the continent’s venture capital comes from outside its borders, with investors navigating the complexities of working across vastly different economic regions on the continent and creating dual dividends of financial and social returns with a single investment. These topics, and more, were the focus of the Investor Day hosted by Founders Factory Africa (FFA) in Partnership with the Africa Tech Festival at Innovation City in Cape Town on 13 October 2023.
The easiest way to reduce risk in the ecosystem is to collaborate
The day was divided into three panels, with Panel 1 addressing venture capital investing across Africa’s different countries and regions. Panel 2 focused on the dual goal of impact investing on the continent, with financial returns and social change firmly in its mind’s eye. The day’s final panel was an Un-panel, featuring attendees who were given the opportunity to drive a discussion that was on their minds, with panellists nominated by other attendees.
Philani Mzila (Investment Manager, FFA) moderated Panel 1, which featured Octavius Phukubuye (Investment Manager, Microtraction), Mathew Saunders (Head of Investments, Future Africa), and Lumi Mustapha (Head of Legal, FFA) as its guests. This is what Mzila had to say about the discussion between himself, Phukubuye, Saunders, and Mustapha.
“We all know Africa isn’t a behemoth; it’s 54 unique countries. As investors, it’s crucial for us to have a deep understanding of the diverse landscapes in which we operate. Investing in start-ups goes beyond merely providing financial support; it involves a comprehensive appreciation of each country’s unique attributes and the specific hurdles that may arise within those contexts,” Mzila says.
As described by Mzila, there were several key takeaways that Investor Day attendees took away from the panel:
- As investors operating across diverse geographies, you must be well-versed in local intellectual property rights, ensure effective contract enforcement, and adhere to local financial regulations.
- Infrastructure gaps, digital penetration rates, and consumer behaviour are still crucial factors for consideration. However, this should not deter you, as these factors also present opportunities and strategic focus should be intensified in markets exhibiting substantial white space.
- Collaboration is the easiest way to de-risk early-stage investments in unfamiliar markets. Finding strong local partners to invest alongside is critical. The use of venture scouts can also significantly increase local knowledge and context.
Impact investing through venture capital is targeting critical problems on the continent
After Panel 1 wrapped and a short break, Loraine Achar (Investment Associate, FFA) drove the exchange of opinions on Panel 2. She was joined by Opeyemi Solaru (Impact Associate, FFA), Farah Emara (Co-founder, Fresh Source), and Olwethu Mhlana (Founder, Lulibo Market).
“VC investing in Africa has emerged as a promising approach to drive sustainable development and address pressing social and environmental challenges across the continent,” Achar says.
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