Funding slowdown? Not in Africa.
While much of the world is experiencing a shrinking of available funding for startups, Africa is bucking the trend, with two venture capital firms this week unveiling targeted funding and support for African startups.
Egypt’s VC firm Flat6Labs launched a US$95m seed fund to boost early-stage technology startups in Africa over the next five years; while Factor[e] Ventures – which also focuses on early-stage tech startups – launched Delta40, a new venture studio that will deliver capital and hands-on support to African founders and startups focused on climate tech.
This commitment to the African startup ecosystem comes in the lead-up to the inaugural GITEX AFRICA, the continent’s largest all-inclusive tech event taking place in Marrakech in May and follows a booming 2022 for the African tech ecosystem.
While global venture funding saw a historic decline in 2022 across much of the world, falling amid recession fear, Africa bucked the trend with funding for the tech sector increasing to US$6.5 billion last year, up from US$6 billion in 2021, according to the Partech 2022 Africa VC report.
The Africa opportunity is massive
For many VCs, including Flat6Labs and Factor[e] Ventures, the opportunity Africa presents over the next 10 to 20 years is huge.
Not just because the country is growing from a lower base, but also because of the major shifts taking place – in demographics, urbanisation, and in tech adoption.
And leveraging the momentum of last year’s record year for African tech startups is crucial.
“Africa is one of the most exciting regions to invest in tech and innovation, with huge untapped potential and unique business opportunities,” says Ramez El Serafy, general partner at Flat6Labs’ new Africa Seed Fund (ASF).
“We will leverage our experience and knowledge to guide the startup founders to create truly scalable, investment-ready, Africa-based companies.”
The ASF fund, which extends Flat6Labs’ reach into new African countries including Nigeria, Ghana, Kenya, Morocco, and Senegal, will invest in more than 160 early-stage tech startups over the next five years and will focus on sectors that accelerate digital inclusion and industries that contribute to addressing social and environmental challenges, such as greentech, agritech and climate tech.
Factor[e] Ventures is taking a similar approach in driving long-term positive change with its new venture studio Delta40, whose aim it is to increase incomes and tackle climate change in Africa by building and investing in tech ventures.
