The UK government is spearheading an initiative that is pooling together wealthy businessmen from across the continent and incentivizing them to invest in Kenyan and South African startups.
The International Tech Hub network, a UK Government initiative delivered by the Department for Digital, Culture, Media, and Sport, is allowing a group of Kenyan, South African, and UK-based experienced professionals or new angels to join the African Angel Academy in January 2021 to promote a culture of Africans investing in Africans,
In the initiative’s blueprint is the thinking that successful professionals, entrepreneurs, and business leaders have the potential to create significant impact and personal wealth by investing their time, money, and expertise in talented local entrepreneurs.
Kenya and South Africa have two of the most vibrant and active start-up ecosystems on the continent, with Nairobi and Cape Town often termed the “Silicon Savannah” and “Silicon Cape” of the continent.
According to Partech, in 2019 Kenyan start-ups raised a total of US$ 564 million (Ksh61.7 billion) in funding over 52 deals (+18% YoY), while South African start-ups raised a total of US$ 205 million (Ksh22.4 billion) with 66 deals (+78% Year on Year).
Yet, the reality is that building a start-up in both countries is still incredibly tough with statistics showing that 30-60% fail within the first two years particularly if you don’t have access to early-stage capital and networks.
There are now close to 60 angel investor groups on the continent according to the African Business Angel Network (ABAN) actively investing in early-stage companies, but it is indisputable that Africa needs more individual investors to stimulate local economies and create scalable social impact.
Angel investors are high net worth individuals who provide financial backing for small startups in exchange of equity in the company.
“Entrepreneurs have already shown how disruptive technologies and business model innovation can be game-changing and create much-needed jobs for Africa. However, they need support, both early-stage capital and mentoring to achieve their potential. Through this programme, we hope to see more individuals becoming active angels”, says Sheena Raikundalia, Director at UK-Kenya Tech Hub.
The African Angel Academy was designed and launched in 2020 by Viridian, formerly known as Fraser Consulting, the Viktoria Business Angel Network (VBAN) and ABAN.
The program is delivered through an online course that draws on the experience of ten top angel investors, including Tomi Davies (Nigeria), Rebecca Enonochong (Cameroon), Abu Cassim (South African Investor), Stephen Gugu (Principal InVhestia Africa), Alexandra Fraser, and Khaled Ismail (Egypt).
To date, 50 new angel investors from five countries have participated, and three angel groups have been accelerated through the program.
The UK-Kenya Tech Hub and UK-South Africa Tech Hub have committed to supporting the next cohort of the programme, which will be run for 45 new angels or experienced professionals from Kenya, South Africa and the UK who are committed to investing in local Kenyan and South African start-ups.
The online course is coupled with masterclasses from local experts and angels, as well as virtual networking sessions and a start-up showcase.
“Our ecosystems are bubbling up with great technology solutions that meaningfully tackle the myriad of challenges that prohibit economic inclusion and growth for much of our population. Aspiring early-stage investors in South Africa, Kenya and diaspora living in the UK, who are keen to learn how to source and invest in the local technology scale-ups that are solving these challenges, should apply”, says Shirley Gilbey, Director UK-South Africa Tech Hub.
This exclusive program is delivered over 10 weeks from mid-January, and the course is fully funded by the International Tech Hub Network.