Why Now Is The Ideal Time To Invest In Africa, The Fastest Growing Continent In The World

Fueled by a young rapidly urbanizing population, Africa is not only the fastest growing continent on the planet, it’s the only region on the globe where more women than men choose to become entrepreneurs. However, startups led by men receive far more funding than their women counterparts. According to the African Development Bank, the funding disparity between male and female founders in Africa is $42 billion.

That’s not stopping Kenyan founder, Talash Huijbers, from expanding her two-year-old startup, InsectiPro, which rears Black Soldier fly larvae for animal feed and cricket protein for human consumption. Driven by aspirations to reduce the 1,900 tons of organic waste produced every day in Kenya’s capital, Nairobi, and to provide an alternative to costly fish meal-based animal feed, Huijbers says one of the benefits of building a business in Kenya is that she lives in “organized chaos,” which entrepreneurs need to deal with on a regular basis, irrespective of where they reside.  

Read Also: South Africa, Cape Town Healthtech Startup Secures R5-Million

Pre-pandemic, InsectiPro produced two tons of larvae on a daily basis. In addition to her quintessential Kenyan lifestyle and surroundings, Huijbers says Kenya’s thriving, collaborative startup community is what keeps her and her 62 team members on their toes. 

“Every day, there’s something changing,” she shares. “We’re moving machines around.  New people are coming on. We have different visitors with specific expertise come every day. So we learn a lot. Everything is done by practice, and it makes us stronger as a team. If you ask anybody on my team how to work with a Black Soldier fly, they know exactly how to do it because we all work in the field. It’s stressful because a lot of things change every day, but it also remains very exciting.” 

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Meanwhile in Cape Town, South Africa, Zeenith Ebrahim is building JamiiLife, a technology platform that connects health workers with people who are uanble to care for themselves in low-income South African and African communities. Having ceased in person visits since the pandemic started, the startup is now piloting a virtual nurse. 

Prior to starting Jamiilife, Ebrahim led GE Healthcare’s Affordable Care business and Indirect Channel Partners across Africa. In this role, she enabled access to healthcare technology across the African continent. 

“I just want people to have access to a level of care that gives them independence to continue to live their life beyond an illness or age,” says Ebrahim, whose grandmother was bedridden for 16 years. 

Both Huijbers’ and Ebrahim’s startups are prime examples of businesses that could be replicated in other parts of the world in need of food security or more inclusive healthcare access. For decades, the Western world has been piloting solutions to save Africa and other emerging markets, but how often do developed countries look to Africa for ideas and proven business models addressing society’s toughest problems? Not enough.

Investing In Women Founders In Africa

For London-based Geetha Tharmaratnam, CEO and founder at Aequalitas Capital Partners, Africa is home, full of success stories, and unlocked potential. Born in Malawi and raised in Zambia, she spent much of her adult life in Botswana. At age 15, she lost her mother, due to limited access to healthcare—one of the reasons she has a deeply personal interest in investing in Jamiilife when Ebrahim is ready for funding.

After starting her career in private equity in emerging markets, Tharmaratnam became one of the founding team members of the Africa Health Fund. She now sits on the investment committee of a $50 million SME investment fund in Botswana, as well as the board of a conservation impact fund in eastern Southern Africa. 

“Regardless of deal size and geography, performance is extremely high among female entrepreneurs, and I want to invest in more of them,” says Tharmaratnam. “And if you really want to invest successfully in Africa, you need to be doing it in the SME space.” 

Where’s There’s A Gap, There’s Opportunity 

Despite Nairobi and Capetown being one of many innovation hubs in Africa, and the continent’s startup capital growing from $400 million in 2015 to $2 billion in 2019, a deep investment gap pervades the ecosystem—one that calls for more in-country investments to take place and more investments in small to medium sized businesses (SMEs). Like Tharmaratnam, Jim Chu, founder and CEO of Untapped Global, which facilitates investments in frontier markets, is changing that.  

An avid investor in Africa and other developing economies, Chu has observed up close that SMEs are the bedrock of society around the world. Years ago, while looking for a way to support a clean water organization in Haiti, he saw a need to equip local SMEs with the proper technology to become investible, and to connect them with international investors. To amplify the SME opportunity, he recently published an op-ed on the Untapped Global blog, highlighting the $5.2 trillion investment gap in SMEs in developing countries and the $3.9 trillion chasm in the global south (Africa, Latin America, and Asia), which he refers to as a “VC blindspot.” He pointed out that a number of investors from in the U.S. are looking for the “Uber unicorn of Africa.” 

As Chu references, 70% of the sub-Saharan Africa economy is informal, and includes small businesses such as motorbike taxis, water ATMS, and mobile irrigation services. Most of their transactions are peer-to-peer. To formalize and digitize them, Untapped Global designed a Smart Asset Financing platform that enables accredited investors anywhere to invest in SMEs across Africa and other frontier markets.

“For investors who are already actively investing in emerging markets, we want to make investing in their own economy profitable and something that they can feel a personal connection to,” says Chu. “We want them to feel that investing in their own country doesn’t need to come at the expense of their pocketbook. We also want to enable smaller investors to invest in their own countries. Many are unable to, due to the lack of safe and transparent options. For investors in developed countries, who are new to emerging markets, we’re offering them real investment options that lead to healthy financial returns and a lasting positive impact.” 

An Eternal Commitment To Hustle

Meanwhile, Tharmaratnam is currently in the process of closing a transaction with  Sara Dhewanto, a founder from Indonesia, who pitched her mobile payment and remittance system, Duithape, to Tharmaratnam when they were both guests on “The Nest,” a monthly Zoom show that’s part of Untapped Global’s investment network. The series connects aspiring entrepreneurs in frontier markets with angel investors around the world. Tharmaratnam was so impressed with Dhewanto she wanted to invest her company immediately. 

“What I’m hoping will change is not just a blind spot for VC investors outside of the US, but also the VC blind spot for many people on the continent,” says Tharmaratnam. “It’s not that Africa is poor. There are plenty of places where there is poverty in amounts that are unacceptable, but there’s also wealth. We need to unlock the capital that is on the continent, because for as many problems as there are in Africa, African entrepreneurs are used to stubbornly finding solutions, and it’s always within the context of community. They’re fixing problems for themselves and others. They have an eternal commitment to hustle. They’re going to make things work, no matter what.”

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