Untapped opportunity in Africa’s emerging startup hubs

African startups are in a unique position to leverage innovation to answer some of the continent’s most pressing challenges. To achieve this, an enabling environment is mission critical, according to Abu Cassim, founder and director of Jozi Angels, an angel network that invests in early stage startups.

Growing venture capital (VC) in Africa was a focal point of discussions at the recent Africa Innovation Summit in Kigali, Rwanda. “Exciting opportunities exist in VC frontier markets like South Africa, Kenya and Nigeria along with other international emerging markets such as Indonesia, Poland, Mexico and the UAE,” notes Cassim.

Successfully developing Africa’s VC sector hinges on a number of factors including identifying additional sources of funding for co-investment, for example, suitable combinations of government and corporate funding. Cassim went on to state “Startups stand to benefit enormously if we begin to align our efforts and pool our resources from across all corners of the continent. Forums like the Africa Innovation Summit bring the continent’s pioneers together. Relationships developed here will go a long way to developing common objectives and pan-African networks that will benefit the investment and startup communities.”

Cassim adds that regulatory and tax reform has the potential to give the continent’s investment landscape a much-needed boost. “Changes made to South African legislation are a good example of what is possible. In 2009 the government introduced amendments to the Income Tax Act, with further amendments in 2014. These changes established tax incentives for investors who can claim deductions for funds invested in approved venture capital funds. As at the end of November 2017 there were over 60 registered S12J venture capital funds in South Africa and investment by the VC sector is growing at an impressive 23 percent annually.”

Discussion contributors also included Nairobi-based Héloïse Zimmermann from I-DEV International “Sharing success stories will assist in attracting more capital to the continent. While leveraging local investors will allow the ecosystem to benefit from business networks that each investor brings to the table.”

For more information, visit www.joziangels.co.za

About Jozi Angels
Jozi Angels is an angel network based in Johannesburg, South Africa. They exist to grow the startup ecosystem and facilitate the growth of innovative startups. Through their broader network they have sourced the hottest startups and facilitated several investments. Their members are approved investors serious about providing capital and coaching to early stage companies.

Their mission is to further develop the startup ecosystem through investment, events and education. They facilitate investments in to startups that suit the investor’s professional background while at the same time supporting South Africa’s emergent innovation economy.

Aggregating resources and knowledge through a group they are able to make larger investments and diversify risk. It also allows for more effective deal sourcing and screening. Apart from this, there are intangible benefits such as camaraderie and goal sharing. They operate in a sexy space, investors get ‘hands-on’ in exciting opportunities that may become the next big thing!