Demo Africa, a launchpad conference for emerging technologies and trends concluded a successful sixth edition last week hosted by the City of Ekurhuleni in the Gauteng Province of South Africa, the second time it has been held in the southerly african state. This year’s edition marked over 210 startups from across Africa launching to the world in front of an audience of peers, media, technology buyers, venture capital and private equity representatives and angel investors.
Being a launchpad, it is understandable that many of the companies are at their very earliest and thus in the normal capital raising cycle they would only register as promising prospects for venture capital and private equity type monies. However for early stage investors, it offers and continues to offer rich pickings for a pipeline that would deliver good returns whether the funds are put in individually or syndicated across a group to minimize risks.
A key observation is that we are still deficient on the angel investor front – first from a simple head count and second from committed funds. Speaking to many of the entrepreneurs during the Demo Africa boot camps organized before they take to stage, designed to have them investor ready; a common and prevailing thread is poor access to funds that would provide runway to allow for the testing of hypothesis and firming up a minimum viable product. This means that teams often take much longer to get to market.
The African Business Angel Network (ABAN) has been at the forefront of activating investor groups across Africa with an obvious inclination to early stage, which is where the gap is. Several investor master classes have been organized in Africa, Europe and the United States of America and their attendance continues to grow with a target to have at least 2,000 active African angel investors. Sounds like a low target for a continent that has hundreds of thousands of entrepreneurs and healthy representation in the diaspora right? But the operative word here is ‘active’. The challenge is often getting those with available resources and expertise hooked and interested in the intangible which is how many technology businesses are perceived.
Tomi Davies, co-founder of the Lagos Angel Network and President of ABAN has the SI unit of the technically qualified angel investor as ‘an individual entrepreneur or professional who has managed to become a landlord or owns over $250,000 in stocks and bonds and wants to contribute to the development of their country’.
With a keen and more relatable frame of mind towards issues that plague us and their resulting opportunities, we should apply ourselves more towards increasing the local pan-african appetite for technology investments if we hope to see more companies grow, flourish and perchance offer a decent return on the time and capital investment given.