Top 7 investors who invest in African businesses
Amazing business prospects abound in Africa, but most can’t get off the ground without funding. As a result, thousands of driven individuals in Africa give up on their business concepts and endeavours due to a lack of funding. One of the biggest risks to businesses worldwide, particularly in challenging economic conditions like Africa, is a lack of financing. In reality, most people claim that it is difficult for business owners to get finance on the continent, especially if they are just starting out. They assert that no one wants to make investments in companies in Africa. What’s this? It isn’t fully accurate.
This article will examine prominent individuals, groups, and investment companies spending millions of dollars annually on African enterprises. Contrary to popular belief, after reading this, you will understand that the issue is not a lack of money but rather a lack of understanding and proper information, which is what I am presenting to you today. The fact is that many African business owners who require funding are just unaware of the variety of options and opportunities accessible to them. More money has been pouring into Africa over the past ten years. In addition to the US, Europe, the Middle East, and China, a large portion of it originates in Africa.
I now give you an overview of seven of the most active financiers, investors, and grantmaking organizations that assist enterprises and initiatives across Africa.
- Tony Elumelu Foundation
The Tony Elumelu Foundation has contributed $100 million to the Tony Elumelu Entrepreneurship Program (TEEP). The program was started by Mr Tony Elumelu, a well-known Nigerian businessman and philanthropist. Each year, it chooses 1,000 entrepreneurs from all around Africa for training, mentorship, and funding program. The fund anticipates that the 10,000 start-ups and young companies chosen from all of Africa over a ten-year period will create one million new employment and an increase in income of $10 billion for the continent’s economy.
All 54 African nations’ nationals and authorized residents are the focus of the TEEP Fund. Any African-based for-profit company that has been operating for less than three years is eligible to apply, including brand-new ventures. A $5,000 grant is given to each participant in the program.
- International Finance Corporation
The International Finance Corporation, or IFC as it is more frequently known, is a member of the World Bank Group and a development finance agency. It is the biggest organization dedicated solely to the needs of the private sector in underdeveloped nations like Africa.
The IFC has made over $25 billion in investments in financial institutions and enterprises in Africa, and as of 2017, it had a portfolio worth more than $5 billion. A business or entrepreneur can get in touch with IFC directly by sending an investment proposal to the field office that is most convenient for where the proposed project will be located.
The SMTP Group in Madagascar received a $3 million investment from the IFC in 2015 to help it grow its chicken business there. In 2016, the IFC invested $7.5 million in Zoona, a provider of financial services that facilitates domestic and international money transfers in Zambia, Malawi, and Mozambique.
- Bill & Melinda Gates Foundation
Bill Gates, a multibillionaire, and his wife Melinda, established the private Bill & Melinda Gates Foundation. With an endowment of $44.3 billion as of December 2014, the foundation, which was established in 2000, is regarded as the largest privately run organization in the world to operate in full transparency. The organisation has three offices in Ethiopia, Nigeria, and South Africa—the nations in which it spends most of its resources and expertise. However, the foundation is also present in Burkina Faso, Ghana, Senegal, Zambia, Kenya, and Tanzania.
The foundation gave Sidai Africa, a social company active in Kenya’s livestock industry, a gift of $4.48 million in 2016. Sanergy, an organization that offers urban slum residents alternatives for hygiene and sanitation, received a $2.4 million grant from the foundation in June 2017.
- Helios Investment Partners
A private equity and venture capital company focused on Nigeria, South Africa, and Kenya, Helios Investment Partners was established in 2004. The company regularly invests between $15 million and $200 million in a single deal, managing a $3 billion portfolio. The companies in the telecommunications, media, financial services, power, utilities, travel, leisure, distribution, fast-moving consumer goods, logistics, and agro-allied sectors are the main subjects of the study.
Interswitch, a supplier of payment services in Nigeria, received a $92 million investment from Helios in 2010. A solar energy startup in Tanzania called OffGrid Electric, which is expanding throughout East Africa, received a $10 million investment from the company in 2016. On the continent, it also invests in Bayport, Equity Bank, GB Foods, MallforAfrica, and several other companies.
- Innovation Prize for Africa
The Africa Innovation Foundation awards an annual grant known as the Innovation Prize for Africa to creators and innovators with ground-breaking ideas and solutions that could benefit Africa. Ten nominees are chosen annually through a rigorous procedure that is supervised by a distinguished panel of judges. Each nominee receives a $ 5,000 gift card, and the top three ideas each win a shared reward of $150,000. Only entries in the foundation’s five priority areas—agriculture and agribusiness; environment, energy, and water; health and well-being; ICTs; manufacturing and services—are eligible for grants.
Dr Valentin Agon of the Republic of Benin earned the award in 2016 for his creation, Api-Palu, an anti-malarial medication made from plant extracts that are substantially less expensive than other anti-malarial medications currently on the market. Dr Ali El-Shafei of Egypt received the $100,000 main prize in 2017 for his invention, the SEMAJIB, a multifunctional magnetic smart bearing with intriguing uses in electricity production.
- The Chan Zuckerberg Initiative
The founder of Facebook, Mark Zuckerberg, and his wife, Priscilla Chan, established the Chan Zuckerberg Initiative. The goal of this group is to “advance human potential and promote equality” with a pledged endowment of 99% of their Facebook shares, which are worth $45 billion.
In 2015, Facebook founder Mark Zuckerberg made a $10 million investment in Bridge International Academies, a for-profit education brand that operates a network of reasonably priced private elementary schools in East Africa. The business Andela, which trains African engineers and programmers and then outsources them to leading IT firms in the USA and Europe, received a $24 million investment from the Chan Zuckerberg Initiative in June 2016.
Mark Zuckerberg’s unexpected first trip to Sub-Saharan Africa in 2016 was a powerful external endorsement of the continent’s rapidly developing startup scene. The Facebook CEO, who is also one of the wealthiest men in the world, visited startup innovation centres in Lagos and Nairobi while on the trip. Zuckerberg is an example of the increasing number of prosperous Western businesspeople who are funding high-impact African companies.
- Omidyar Network
A foundation and an impact investing company make up Omidyar Network, a charitable investment company. It makes global investments in both for-profit and nonprofit businesses. The company was established by billionaire and eBay founder Pierre Omidyar, and since its opening in 2013, it has granted over $50 million in grants and stock investments to numerous companies across Africa.
Bridge International Academies, a for-profit organization that manages a network of low-cost primary schools in East Africa, received a $1.8 million investment from the company in 2009. A start-up called BudgIT, which gives Nigerian residents access to and comprehension of public expenditures, received $400,000 from Omidyar Network in 2014. Omidyar Network invested $1.2 million in Hotels.ng, a Nigerian internet hotel listing and booking business, in cooperation with Echo VC in 2015. The company gives grants and invests up to $4 million in equity in companies and organizations with a strong potential for social impact.
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