African tech startups received a total of over 185 million USD over the course of 2015. A significant proportion of this investment was dedicated to “social enterprises”, i.e. profit-making companies with social impact as their main goal.
Some African entrepreneurs have voiced concern over the disproportionate amount of funding and attention given to these social enterprises as opposed to startups that could potentially serve the African middle class. Agosta Liko, a Kenyan entrepreneur who founded a digital payments system, has publicly drawn attention to this problem – at least as it applies to his home country, Kenya.
“When you look at Kenyan tech, sometimes it feels like you need to put up a picture of a poor lady on the side of the road selling mangos to get funding,” Liko said, speaking at a recent summit for African innovators. “I think we need to look at other markets. What has happened in our ecosystem is that everyone is so focused [on] the guy at the bottom that they forget the viability of the middle. When you look at the middle class in Kenya, you’re looking at 3 to 5 million… We believe this is the [market] to serve.”
Whereas many economists believe the focus of African investment should lie in improving productivity in traditionally important sectors like agriculture, foreign investors are seeing the value in deploying their capital to support enterprises that cater to Africa’s middle class. Africa is set to experience an “imminent boom in consumer spending”, with spending predicted to reach 1.4 trillion USD in 2020.
Given the potential spending power of the African consumer base, which comprises nearly 1 billion USD, foreign investors are beginning to focus on opportunities in Africa in consumer-driven sectors like retail, food and beverage, and hospitality.
Naseba has spent over a decade building a network of contacts with investors based around the world – including the Middle East. Our team of investor analysts specialises in understanding the needs and mandates of investors. Our investors have expressed strong interest in deploying capital in Africa, and we are currently sourcing African investment opportunities on their behalf.
On October 4th, 2016, we will be organising a private investor meeting in Dubai to introduce pre-screened Middle Eastern investors to pre-qualified African investment opportunities.
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