Investors were making it rain for African startups in 2016! We are seeing accelerating innovation, increasing numbers, and growing investment. The tech sector probably took the biggest step forward in the past year, raising almost $160 million dollars for startups, an increase of nearly 17% from the year before, according to a Disrupt Africa article.
This growth is amazing to me. Just 5-years ago, I was running a telecom company that was building mobile infrastructure for MTN, one of Africa’s largest mobile operators. Despite all our hard work, we would be lucky if we could even make a Skype call on the shaky internet connection! Now we are seeing startups leveraging that infrastructure I helped build, to disrupt all types of industries, from the financial services sector to agriculture.
With investors now tuning into Africa, I’m excited to see the brightest talent move towards entrepreneurship and realise they don’t need to leave their home countries to chase the dream. This will have a huge impact on economic development for many African countries, not to mention the world.
However, cash may be the greatest driver for innovation, but it can also easily hamper it as well.
Over the past few years, I’ve had the great opportunity and pleasure to speak to many entrepreneurs who are radically transforming the landscape of business in Africa. Recently, I’ve been hearing a lot of entrepreneurs tell me that the most important asset they have is their time.
I never thought of crowdfunding as a “time saver,” but many entrepreneurs are now.
Despite the record number of investors and cash flowing into the continent, capital raising is still very time consuming for entrepreneurs. It’s easy to get caught up in the chase for capital and forget about the immediate needs of the business, and thus fail. Entrepreneurs and businesses are now looking for innovative ways to access capital.
Crowdfunding platforms, like Movement Capital, have provided a viable solution for many. Businesses can tap into an existing network of investors who understand the African market context and are actively looking for good investment opportunities.
I don’t know how 2017 will end up, but I suggest carrying an umbrella!