On Wednesday September 23, the African Business Angel Network (ABAN) in partnership with the Lagos Angels Network (LAN), DEMO Africa and Venture Capital for Africa (VC4Africa), hosted “The African Opportunity: Angel Investing in Africa” Investor Summit at DEMO Africa 2015 in Lagos, Nigeria.
Following the successful edition of last year which resulted in the formation of ABAN, the 2015 summit again brought together early stage investors, fund managers and opinion leaders from across the continent, Europe and the US.
Tayo Oviosu, CEO and founder of Paga the largest online payment platform in Nigeria, helped set the stage by talking about his journey as entrepreneur and more recently of becoming an investor himself. Tayo launched Paga in 2009 with the support of angel investors who offered experience, access to partners and capital. A total of 34 business angels invested in Paga before Tayo went on to raise funds from VC’s and professional investors such as Adlevo, Omidyar and Acumen. He commented on the challenges finding local investors, clearly linking to the need to grow African networks to support African entrepreneurs.
ABAN president Tomi Davies spoke about promoting a culture of angel investing and the ABAN journey, highlighting that innovative early stage ventures requiring less than $1 million in capital, are the most difficult segment of the SME pipeline to reach. Often times they have a minimal track record and lack the collateral needed to secure debt capital from a local bank. Moreover, local Banks and traditional financiers too often do not appreciate the dynamics of the entrepreneur’s specific business and therefore cannot add necessary value beyond capital. It is exactly through direct equity participation that entrepreneurs learn from more experienced entrepreneurs and angel investors with domain specific expertise. ABAN Director David van Dijk added ABAN is a non-profit foundation is part of a shared effort to connect the network, knowledge and capital needed to support the continued growth of Africa’s innovation sectors and to help maximize the continents entrepreneurial potential.
Taking a deep dive into this market segment, a presentation made by Thomas van Halen, Head of Investor Relations at VC4Africa, highlighted several encouraging investment trends, presenting research that looked at 104 early stage transactions in 26 African countries.
Following these introductions, three roundtable discussions brought ‘local investors’, ‘overseas investors’ and ‘ecosystem enablers’ to the stage.
Representatives from Angel Networks in Kenya, Ivory Coast and Nigeria discussed the opportunities and challenges of early stage investing and setting up angel networks. Suzanne Abrogoua, president of the newly founded Cote d’Ivoire Business Angels, spoke about the recent launch of their angel fund with 150 investors already having signed up. Adedotun Sulaiman, Chairman of the Lagos Angels Network described launching an angel group is like launching a startup with all the challenges that come with it. Stephen Gugu, who has been evangelizing angel investing in Kenya the past year, reflected on the large number of international investors who are now taking interest in Africa, “the whole world is here!”. Omobola Johnson, previous Nigerian Minister of Communication Technology, joined the ‘Local Investor Panel’ speaking in her new capacity as a partner with VC firm TLcom.
CEO of Amsterdam based eVentures Africa fund, Vincent Kouwenhoven stressed the need to work with local partners; “A lot of work can be done remotely, via Skype and using other tools, but nothing can replace an in-depth understanding of the local market and having access to the right people locally”. eVentures Africa has invested in 12 African internet companies since launching in 2010 and recently concluded a deal in Zambia, co-investing with local Zambian VC firm Kukula Capital.
Other investors on the ‘Overseas Investor Panel’ included Candace Johnson, president of the European Business Angels Network (EBAN), which represents 20.000 business angels, Pat Wilson, a Partner with Accion’s Frontier Investments Group, and Andrea Barrica, a Partner with Silicon Valley based 500 startups, which has invested in 10 African startups so far amongst others in partnership with African partners Savanah Fund and MEST, the Meltwater School of Technology.
Candace Johnson is also on the board of the Global Business Angel Network, a new initiative to glue together business angel investors from across the world. ABAN, the African Business Angel Network has been working closely with GBAN amongst others inviting local African angel networks to become GBAN lead in their respective country.
Martin Kiilu form the Intellecap Impact Investment Network introduced the third and last panel bringing together different organization and firms that play an ‘enabling role’ in the early stage investing space. Toni Eliasz from InfoDev / World Bank joined Julien Tubbs from online investor platform GUST, Noelle McKean Senior VP with advisory firm Intercontinental Trust and Amee Patel from Accion Venture Lab, an investment initiative providing patient seed capital and support to innovative financial inclusion start-ups.
In his closing words ABAN president Tomi Davies reiterated that the time for Africa is now, that Africa is open for business and that the invitation is open for all to come join us on this amazing journey.