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I put together a "Top 10" predictions for African venture investment in 2021. Here we go...See the final product on @CSISAfrica website in the New Year!
1. @Jumia_Group gets taken private by @Stripe. Since Stripe needs SMEs to adopt its platform, it needs to seed the e-commerce ecosystem wherever it does business. What better place to do that than in Africa, where online commerce is growing 75% faster than the...
...global average. Fallen (and now rising) angels like Jumia proved to the market this year that it can reduce operating costs (reducing operating costs by nearly 50% in ’20) and seed the broader continental e-commerce ecosystem.
2. @Andela is acquired by @Toptal. Turning the page on what has been a challenging past 18 months with lay-offs and office closures, Andela cashes in on the remote-first approach now normalized by Covid-19. Building on its...
...acquisition of Skillbridge, Toptal - the world leader in connecting businesses with software engineers, acquires greater global reach by acquiring Andela (and potentially other remote ‘talent marketplaces’ businesses around the world) and signals it will go public in 2022.
3. Software eats the last mile. Fierce competition in “logistics marketplace” startups, @Kobo_360, @LoriSystems and @appTrella, and new platforms like Salesforce-backed @Angaza, have transformed how manufacturers send and how consumers afford things. Expect logistics and...
...pay-as-you-go platforms to merge more in 2021 as the continent looks to make real the promises of the Africa Continental Free Trade Agreement.
4. @Plaid for Africa emerges. What @Paystack was to @Stripe, @Mono_HQ, a Nigerian startup, will be to Plaid in 2021. By far the fastest growing sector in African venture is fintech (more than 50% of all venture funding went to the sector. The combination of slow moving banks...
..., ignorant regulators and savvy consumers is a blessing for the future seekers. Until now the focus for many entrepreneurs has been on leapfrogging the old institutions - Neobanks, quasi-credit/lending platforms or crypto exchanges. While these are important...
...a more immediate opportunity is simply creating a single API that the old (institutions) and new can talk through. Borrowing directly from Plaid, Mono has a head start on creating an open financial data system on the continent.
5. @SpaceXStarlink redefines everything. Despite the oft-repeated story of Africa’s digital revolution, the continent remains largely unconnected and captive to a few dozen ISPs and a number of mobile operators that provide...
...4G (internet connection rates range from less than 10% in Somalia to around 60% in South Africa). They chronically underdeliver, offering limited bandwidth at high cost. Starlink unravels this, and lets African companies truly “go remote”. Getting around captured regulators...
...and setting up a distribution, installation and support network won’t be easy, but if anyone can, it’s probably Elon Musk. Almost overnight @SpaceXStarlink will change how over a billion people connect to the world.
6. Early investing explodes. With nearly $5trn pushed into the US economy in '20, investors will be looking anywhere for yield. Alongside that ersatz QE, a growing group of angels, fresh from the tech IPO craze, will emerge and form rolling funds, angel syndicates or funds...
...with dramatically different risk appetites. A series of strategic exits ( @Paystack to @Stripe, @DPOGroup to NI @SendwaveApp to @WorldRemit) have defined the continent’s exit multiples are, helping institutional and accredited investors cover the continent with more interest.
7. DeFi Bull Run. Throughout the 2000s, journalists endlessly cited “7 out of 10 of the fastest growing countries in the world are in Africa.” In 2020s, they will cite “3 out of 10 of the biggest users of crypto are in Africa.” The widespread adoption of crypto, and...
...its parent decentralized finance (DeFi), is driving investment into the region by global investors - from Asian entrepreneurs looking to grow exports into Africa to Western “crypto evangelists” that are calling for the end of centralized finance - with deep ...
..pockets. Interestingly, the single greatest driver of DeFi in Africa is retail use by small traders transacting w/ East Asia. Even though Africa constitutes a small portion of global volume on aggregate, its consumer use is a larger share of activity than any other region.
8. Healthcare advances, but not the way you think. In November, @Google’s @DeepMind announced it had solved a 50 year problem - mapping the shape of proteins, which allows vaccines to be created and trialed faster than ever before. Over the next decade, a new generation of ...
...vaccines developed using DeepMind’s AlphaFold technology will eradicate dozens of NTDs, but work will start next year. The @GatesFoundation will push grant financing to get these clinical trial and distribution organizations off the ground through startups like @LifestoresNG.
9. The African Defense Industrial Complex Grows. African states have long had the desire to build a defense industry, but export controls and limited capacity have prevented them from doing so. The inevitable shift to additive manufacturing by companies like...
... @RelativitySpace is bringing down the cost of designing and developing dual-use technologies - like drones, rockets, advanced robotics and artificially intelligent sensor systems. The commodification of these technologies now makes the industry fundable by venture and ...
PE funds. Space is even easier to get to: you can now send cargo to LEO for $2,600/kg! As countries like Turkey look for export markets, new collaborations will be struck with local partners in Egypt, RSA & Nigeria. Watch companies like Dragonfly Aerospace and Aerobotics.
10. GPT3 will create the new “Call Center” for content generation. @OpenAI’s natural language platform, GPT3, isn't just a simple tool for generating fun tweets, it will create a new industry where high value content generation will be outsourced to GPT3 Centers in Nigeria
