Angel investing has emerged as a pivotal component of Africa’s burgeoning startup landscape, where forward-thinking individuals or groups provide crucial financial backing in exchange for equity or ownership stakes. These angel investors often serve as catalysts, propelling early-stage businesses forward by injecting vital capital, expertise, and mentorship.
Gone are the days when angel investing was solely an individual endeavor. Today, there’s a notable shift as investors recognize the strength of collective action. Increasingly, they are coming together to form angel networks, which offer members improved access to investment opportunities and the ability to combine resources for more substantial financial commitments.
A survey conducted by ABAN revealed that in 2022, 41% of angels utilized syndicates or networks. These networks take various forms, with some operating as syndicates where investors pool resources on a deal-by-deal basis, while others establish formal funds fueled by contributions from angel investors, granting them a voice in strategic decision-making.
The most sophisticated angel networks go beyond mere financial collaboration. They employ dedicated professionals to manage the intricate administrative tasks that can overwhelm individual investors, including due diligence and navigating the vast landscape of startup opportunities.
By delegating these tasks to experts, angel investors can allocate more time and energy to providing invaluable guidance and making strategic introductions for the founders within their investment portfolios.
This collective approach to angel investing represents a fundamental shift in the investment ecosystem. Rather than operating in isolation, investors form interconnected networks that leverage their combined wisdom and resources for mutual benefit. This shift reflects a broader trend toward a more collaborative and supportive angel investment environment, where both investors and startups benefit from cooperation.
In this piece, we delve into the seven most active networks driving innovation, economic growth, and nurturing the next generation of African startups.
- Cairo Angels (Acasia Angels) Egypt’s tech renaissance owes much to Cairo Angels, a leading angel investment network in the country. Since its establishment in 2012, Cairo Angels has been instrumental in funding over 36 startups across various sectors, contributing significantly to the continent’s growing tech ecosystem. Notably, they participated in a $1 million seed raise for Nigeria’s last-mile delivery startup, Fez Delivery, in March 2023.
- HoaQ: HoaQ is a community of creators and operators supporting entrepreneurs in building scalable businesses for Africa and its Diaspora. Founded in 2020 by Nubi Kay and Joe Kinvi, HoaQ focuses on backing founders with domain expertise and technical know-how, particularly those who have gained traction within a large defined opportunity. The club comprises professionals from the diaspora interested in backing early-stage startups and diversifying their investment portfolios.
- FirstCheck Africa: FirstCheck Africa is a female-focused fund addressing the capital gap for female tech entrepreneurs in Africa. Founded in 2021, the fund provides between $15,000 to $25,000 to female-led teams, guiding them from the ideation stage to a significant pre-seed round within 12 months. While primarily focused on female-led teams, the fund is also open to investing in mixed co-founder teams where women hold significant decision-making roles.
- Renew Capital Angels: Established in 2007, Renew Capital Angels is a community of accredited investors seeking sustainable impact in Africa alongside financial returns. With operations in nine countries and over 200 members, Renew Capital Angels offers an average check size of $236,000 and has invested in startups like Xente, Wazi, and Badili.
- Dazzle Angels: Dazzle Angels, founded in 2019, is a female-focused angel fund led and funded by experienced businesswomen. Beyond financial investment, Dazzle Angels also offers time, skills, and networks to startups, with a focus on zebras rather than unicorns. The fund has invested in startups like Sorted, CreditAls, and Kweza.
- Midlothian Angel Network (MAN) MAN, founded in 2021 by Wale Salami, connects angel investors with high-growth startups and provides access to industry expertise across its network. Investing in seed and early-stage startups addressing Africa’s challenges with creativity and technology, MAN has backed ventures like Kyshi, Vesti, and SmileID.
- Lagos Angel Network (LAN) Founded in 2012, Lagos Angel Network (LAN) is an exclusive network of angel investors focused on enabling the Nigerian and broader African ecosystem. By educating angel investors, facilitating investments into early-stage startups, and advocating for sustainable policies, LAN has supported startups like Flutter, Big Cabal Media, and Trove.
In conclusion, these angel networks play a vital role in providing crucial funding and support to startups at their earliest stages, helping them transform innovative ideas into successful businesses. Beyond financial backing, these networks offer mentorship, expertise, and connections, fostering the growth of pioneering African startups. As Africa’s tech ecosystem continues to evolve, the importance of these angel investment networks is poised to grow even further.
Source: Benjamindada