short Africas Startups Struggle in Q1 Amid Low Venture Investment

The Southeast Asian venture capital boom of the late 2000s and early 2010s was the result of a number of factors. Several nascent startup scenes in the region had already attracted investors, creating a favorable investment climate. Additionally, vigorous economic growth in certain countries like Indonesia and Thailand coupled with improving global awareness of Southeast Asia’s potential as an emerging market helped drive interest in seed and early stage investments. While this boom has since abated, it laid the foundation for future growth in Southeast Asia’s startup community.

It was during the height of the Great Recession that Michael Goldberg decided to start his own business. Goldberg, who is now a startup adviser with Exchange Capital Partners in San Francisco, was out of work and wanted to do something creative with

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African venture capitalists continue to provide crucial funding for startups, despite a recent dip in results. The continent is still home to some of the most innovative and successful companies in the world, and its startup scene is predicted to only continue growing in popularity.

One data point that caught our eye was The Exchange’s report showing that total venture capital invested in startups decreased by 26% in Q3 of 2016 from the previous quarter. Additionally, the number of deals closed decreased by 27%. As we look at trends over time, it seems as if the quarter was a step backward for the startup scene in terms of investors and deals. One possible cause could be concerns about market overheating following peak VC funding rounds back in 2015 and 2016.

It’s been reported that Africa is still a hotbed for tech investment, with multiple rounds of funding hit recently. Shuttlers, a Nigerian shared mobility company, raised $4 million in a round led by iWorth Ventures. Chargel, based in Senegal, recently raised $2.5 million from Sabre Ventures and Wafa Tanzania Ltd.

African startups are beginning to see a slowdown in the amount of money they are raising. Despite this, many still maintain a large presence online and in terms of overall technological advances. Due to this, there is growing concern amongst partners and venture capitalists that African startups lack the necessary infrastructure and support to truly become billion dollar businesses.

As a continent itself, Africa is home to over 1.2 billion people, generating a GDP of over $2 trillion. Yet despite this wealth, the startup scene in Africa is still relatively undeveloped. Notwithstanding some exceptional early stage startups such as takealot and socialcam – both founded by South African entrepreneurs – the number of significant high-growth ventures has yet to materialize on the continent. This partly owes to the inherent complexity of launching businesses in Africa – due to environmental and cultural challenges,

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Ava Patel

Ava Patel is a cultural critic and commentator with a focus on literature and the arts. She is known for her thought-provoking essays and reviews, and has a talent for bringing new and diverse voices to the forefront of the cultural conversation.

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