In 2022, 600+ startups were funded in Africa resulting in  US$3,333,071,000 raised in various sectors, in different economies across the African startup ecosystem. Of this funding, about 319 were deals that occurred from the venture capital space.

However, from that moment till now, we have all come across different conversations indicating that venture capital as a system is broken and needs to be fixed. The first is in relation to the approach i.e. the process leading up to a deal. The second is in relation to the purpose i.e. what makes up every deal. 

The Typical VC Approach 

VCs and startups have an interlaced relationship. On one hand, we have these startups who seek suitable investors to finance their business and on the other hand, we have VCs who invest, provide guidance and contribute to the startups they have invested in. In this relationship, each has several responsibilities to the other apart from just receiving and sending funds respectively. In fact, the responsibilities of a startup founder will include being a better builder, making sure he does everything in his power to see the startup succeed and other tasks like regular updates to his investors, creating a peaceful and excellent relationship with all partners (investor management) and ultimately keeping to the terms of his contracts. The investors must also create goodwill for the companies, support the founder’s vision, introduce good opportunities and collaborate to manage the fund. 

Before all of this, however, we have a major challenge. One that has been mentioned repeatedly. The question of “How do startup founders get funding?” As it is, startups must leverage their network. This means it will be easier for certain persons who school at Stanford University to get funded than somebody of equal capacity somewhere in a lesser-known university to get that same funding. While this is an interesting topic to discuss, we have a bigger challenge. Venture capital is considered a dogmatic one-way process of getting your pitch decks right, networking your way through and getting investors. It defeats the purpose for which it was created in the first place: Innovation. 

 What does this mean?

There are two types of startup founders. The one that fits into the VC box and one that doesn’t fit. The one that fits is fluent in his speeches, has mastered pitches and can present his ideas and business excellently. He has a perfect tone and fortunately, a top-tier education background. He has mastered the art of becoming a founder and because the VC system supports such founders, VCs often fall into bad investing. 

We have seen many such failures in recent times. Great organisations crashed because the team were not whom they said they were. 

 We encourage VCs to ask 5 fundamental questions to avoid bias and push innovation in emerging markets like Africa.

  1.  What biases are clouding my judgement? 
  2. Is Innovation happening here?
  3. What assumptions do I have about the founder, the business model and the market?
  4. How can I check my facts? I.e. due diligence 
  5. Do I absolutely believe in this? 

With these five questions, VCs will move from a state of dogmatic investing to backing pure innovations and disruptive ideas. 

This brings us to the second question. 

The VC algorithm 

What is the reason for venture capital? Do VCs still back disruptive and innovative enterprises? To invest. Why? To get returns? To push innovation? Or both? 

It has been argued in recent times that venture capital investments are not as risky as they used to be and in fact, investors are now going for less risky options. Arguments on social media spur that they are more interested in backing companies for the purpose of big, massive returns rather than the former (for pushing innovation). However, when we see an ecosystem like Africa that is unique and different, we need investors who truly believe in her to push and create opportunities. 

While this is reasonable, it is not factual and cannot be properly ascertained. There are factors as mentioned in the first part of this conversation that might cloud the judgement of an investor but in the grand scheme of things, an investor does not know which investment will bring more returns or which is more likely to fail. 

The entire business of investing is a game of chance that we love to play in. We hope that all our venture investments yield great returns and even though that might not be feasible, we are not sure which will become a unicorn, wind up or give average gains. Investors are thus encouraged to do their proper due diligence and invest in companies that seem like good investment opportunities and have fair chances of greater returns while having innovation and creativity at the forefront of their minds. 


The VC industry has existed for decades. It has many ways it can be adjusted, and it is the job of every investor to close the gaps that are wide and encourage an even more transparent and elevated system of operation. Regarding if the system is broken or not, we opine that it is not perfect but as the world evolves and we support the startup ecosystem, we envision more technologies that will make VC investment an easier and more structured method of investing throughout the world.


The AfricaTech Awards Ceremony 2023
Viva Technology and the International Finance Corporation (IFC)  announced the top 45 startups long-listed for the second edition of the AfricaTech Awards, a pan-African initiative recognizing companies driving innovation and development impact across the continent.  
The 2023 AfricaTech Awards is part of IFC’s strategy to strengthen tech ecosystems in emerging markets and help innovative startups scale. IFC recently announced a $225-million venture capital platform to support tech entrepreneurs across Africa, the Middle East, Central Asia, and Pakistan. IFC also expanded the IFC Startup Catalyst Program by $60 million to help seed funds, incubators, and accelerators finance and mentor early-stage startups and prepare them for later-stage investment. 
More info here

ABAN launches 2 new sector-focused angel investor networks
The Africa Business Angel Network (ABAN) has launched two new thematic angel networks aimed at supporting startups that are building solutions in the smart cities and digital trade sectors on the continent. 
More info here

i3 announces applications to support African startups in healthcare supply chains
i3 is supporting the commercialisation of 60 promising early and growth-stage companies. 
i3 is funded by the Bill & Melinda Gates Foundation and sponsored by AmerisourceBergen, Merck Sharp & Dohme (MSD), Microsoft and Chemonics
More info here

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