Investment by Venture Capital in African Startups

African startups are on an upward fundraising trend in 2020 and global investors are taking note of it. Last year the amount of venture capital channelled into African opportunities surpassed the $725.6M raised in 2018 by nearly $500M.

Global Investors in African Startups

There were over ninety African companies that raised over a million dollars each in 2019, with Nigerian companies attracting the lion’s share of over $650 million.

As these African start-ups mature, traditional players such as Goldman Sachs are investing, and large corporate venture arms and sovereign wealth funds are also beginning to circle. Twiga Foods, a Kenya-based food logistics startup, closed a $23.7 million Series B round led by Goldman Sachs, while Goldman also led a $20 million Series A funding round for Nigeria-based freight logistics company Kobo360. Both investments plan to support pan-African expansion.

The entrance of established players signals the growing maturity of Africa’s startup ecosystem as African companies are not only attracting global capital but require the sizable investments these investors desire.

As it did in India, Corporate venture capital (CVC) is also playing a key role in supporting the emerging startup ecosystem in African countries. There is a difference between a traditional VC or PE firm and a Corporate Venture Capital (CVC). The startups have an advantage from CVC funding. Because Unlike conventional VCs, Corporate venture capital gives more time to repay. As a result, the startups get more time to scale post-investment.

One of the bigger names in CVC, Visa has announced that it will buy a 20% stake in Nigerian firm Interswitch for $200 million.

GV also know as Google ventures and Toyota’s venture arm is also planning to invest African companies. Yamaha has shown interest in Nigerian motorcycle transit startup MAX.ng.

Furthermore the big corporate like Mastercard and Shell are also investing in African startups.

Asian Investments in African Startups

2019 also saw Asian entities entering into the African Startup ecosystem. Softbank one of the most prominent players in Asia participated in a $1.25 billion round of fundraising for Airtel-Africa. The telecom company Airtel-Africa is a subsidiary of Airtel India.

Opay, a mobile payments startup in Africa, owned by Chinese investor also raised $50 million in a Series A round from investors including Sequoia China.

Mobile phone device creator, Transsion, which operates in Africa and is owned by China, partnered with Kenya’s Wapi Capital to fund early-stage African fintech startups.

Apart from CVC and VCs, some sovereign wealth funds are also keen on investing in the African market. Abu Dhabi’s state fund is planning to invest $250 million through two funds focused on technology start-ups in the Middle East and North Africa.

Moreover, Qatar Investment Authority has also invested $200 million in the Airtel India subsidiary, Airtel-Africa

The African market has already seen a huge jump in fundraising from the established players giving a very positive sign for African. Jack Ma of Alibaba and Jack Dorsey of Twitter have recently visited the African countries. This has created a buzz among the African ecosystem as they are anticipating more investments in the coming years.


Africa is expecting more and more global investors and bigger players to invest in their companies. The ecosystem is expecting that the negative narrative that African companies are too risky for mainstream venture capital is changing now.