How to untap the African venture market

The African start-up sector is booming, and the continent as well as its ventures are more than promising: especially young entrepreneurs contribute to the development of the private sector in Africa and are on the rise, particularly in the tech industry.

However European and German investors show reluctancy and skepticism when it comes to investments into African ventures. The current image of the continent, uncertainty and a lack of knowledge about the potential in many African countries may be the reason.

We aimed to strengthen the exchange of experiences among targeted investors that are already active in African markets and those who are not (yet), while presenting the two success-stories of Mobile Afya and Tanél Health. Therefore, we offered a platform for a dialogue on opportunities, best-practices, challenges and risks, and to promote investment in Africa, notably through co-investment with local funds.

Among others, the following points were addressed in the discussion:

1. The African venture market is still a white spot for many investors and is often perceived as too risky; therefore more public money is needed to de-risk investments and attract more commercial money; the exchange between public financing institutions and private investors may also be strengthened to recommend and ensure follow-on investments
2. The exit strategies are not always clear and need to develop to sustain the venture world; therefore financial institutions and corporates need to grow and to be build up in parallel
3. A fast exit is not always the only way to go and investors should at the same time have a look at companies and investment cases with no specific exit strategy but that intend to grow organically, to foster a sustainable development of given sectors on the African continent
4. The start-up sector on the African continent is booming and hundreds of companies are generating substantial revenues, but these success stories only rarely reach Germany and its investor scene; therefore more stories need to be told and the information and knowledge exchange to be strengthened to make the African venture market more attractive