Average startup raise in Africa in 2015 $326k – survey

By Gabriella Mulligan

The average investment value raised by African startups in 2015 was US$326,000, showing significant growth on previous years, according to survey results released by the African Business Angel Network (ABAN) and VC4Africa.

Disrupt Africa reported in October African startups were asked to complete the 10 minute“Venture Finance in Africa” survey hosted on the VC4Africa portal, which aimed to compile a large dataset on the performance of African growth ventures to date.

This year’s survey was open to any African startup wishing to respond; contrary to previous years, when the research covered only members of the VC4Africa community – giving this year’s survey a broader scope.

The results of the survey have now been released, with certain key findings revealing growth in ecosystem activity over the past years.

48 per cent of respondents said they successfully raised external investment in 2015, up from 44 per cent in the previous year.

The average capital secured per startup in 2015 was US$326,000; showing significant growth compared to the 2014 average of US$206,000, and the 2013 average of US$130,000.

However, these comparisons may be impacted by the wider scope in participation for the 2015 research.

The results found that most capital and the largest investments are secured in South Africa; while the most investments take place in Nigeria, closely followed by Kenya. Altogether, the research recorded investments in 26 African countries.

From the research, ABAN has drawn three conclusions as to trends prevalent in the ecosystem.

First, there is a growing interest from members of the African diaspora in investing in their country of origin, ABAN said.

There are also an increasing number of business professionals turning investor locally, the report says.

Finally, there is a growing appetite for cross-border investing across Africa.

“Here at ABAN we see that these trends highlight a change in mindset and a growing recognition of the opportunities and entrepreneurial talent coming from Africa,” said David van Dijk, director general of ABAN.

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