Months after announcing a €65 million fund for African startups, the French government is all set to begin investing.
French development finance institution, Proparco has been given access to €50 million from the pool to begin investing in African startups. Speaking with Venture Burn, Siby Diabira, head of Proparco’s Southern Africa and Indian Ocean region disclosed that the institution has set up a venture capital team to identify worthy investments across the continent.
— Christophe Viarnaud (@capemaverick) November 16, 2018
She also disclosed that the investment will be disbursed in two ways. First, funding will go to other venture capitalist firms. Proparco’s investments have already gone into a few African funds an investment into Kenya’s Novastar Ventures II fund currently in its final stages.
Secondly, Proparco is going to invest directly into African startups.
According to Ms Diabara, the funds will not concentrate on a particular sector, but will focus on startups providing viable solutions for people.
“I think for us the main focus point is looking for startups that will change the day-to-day life of people,” she says.
But interestingly, when asked if Proparco will focus on particular geographical regions, Siby responded that it will only target places with the “best opportunities.” This is unexpected as France usually prioritises investment in Francophone Africa.
Nevertheless, it did have us thinking about Nigeria and how Nigerian startups indeed present “the best opportunities.”
Why Nigeria Startups Represents the “Best Opportunity”
The Nigerian startup ecosystem is by far one of the most advanced and sophisticated on the African continent.
Nigerian #startup Terrragon, one of Africa's biggest data and #martech companies buys Indian founded Singapore mobiletech startup Bizense in cash & stock deal considered 1st of its kind for #African #tech companies.https://t.co/muYvQdquNA pic.twitter.com/AfVVVriUbY
— Sam Abraham (@IamSamAbraham) November 14, 2018
Over the last 5 years, Nigerian startups have provided remarkable innovative solutions for problems ranging from agriculture, ecommerce, finance, logistics and even shipping.
Although, they’ve not all attained traction, investor confidence has increased incredibly. Over the last three years alone, the value of startup funding has skyrocketed.
Last year, the combined value of VC funding into Africa was $195 million. This year alone, the top 10 funding rounds in Nigeria have a combined value of $74.3 million.
Nigerian startup @fibrelifestyle, rental solution provides exclusive listings for rentals and guarantees rental payments for landlords, minimizing upfront payments by qualified tenants. #AESIS2018 pic.twitter.com/flyX7MLZQr
— Rebecca Enonchong (@africatechie) November 12, 2018
With a population of over 180 million, Nigeria holds boundless opportunities. And it has continued to show that with the right investment, just about anything is profitable.
But not everybody thinks Nigeria and other more ‘developed’ African countries should get investment priority. Recently, the World Bank launched a Francophone Africa-targeted accelerator because it saw a lack of geographical diversity in VC funding in Africa.
While that is understandable, it still goes on to prove that Nigeria is arguably the tech capital of Africa. Therefore, if the ‘best opportunity’ is what Proparco wants, it should look no further.
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