Angel investing has emerged as a significant part of Africa's startup scene, where visionary individuals or groups extend financial support in exchange for equity or ownership stakes. These angels often become the catalysts that propel nascent businesses by injecting much-needed capital, expertise, and mentorship.
Gone are the days when angel investing was considered a solitary pursuit. Today, we can see a paradigm shift as individual investors recognize the power of collective action. They are increasingly banding together to create angel networks that offer members enhanced access to investment opportunities and the ability to pool resources for more significant financial commitments.
A survey conducted by ABAN showed that in 2022, 41% of Angels leveraged a syndicate or network. These networks assume diverse forms, with some operating as syndicates where angels combine their resources on a deal-by-deal basis. In contrast, others establish official funds fueled by contributions from angel investors, granting them a voice in strategic decision-making.
The most sophisticated of these angel networks go beyond mere financial collaboration. They employ dedicated professionals who assume the responsibility of managing the often cumbersome administrative tasks that can overwhelm individual investors. These tasks encompass due diligence, the meticulous process of evaluating potential investments, and navigating the extensive landscape of startup opportunities.
By entrusting these seemingly tedious aspects of investing to experts, angel investors gain the freedom to allocate more of their 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 transformation in the investment ecosystem. Investors no longer operate in isolation but, instead, form interconnected networks that leverage their combined wisdom and resources for mutual benefit. This shift reflects a broader trend towards a more collaborative and supportive angel investment environment, one where both investors and startups reap the rewards of cooperation.
In this piece, we look at the seven most active networks that are fueling innovation, driving economic growth, and nurturing the next generation of African startups.
Cairo Angels (Acasia Angels)
Egypt's tech renaissance owes much to the efforts of Cairo Angels, one of the country's leading angel investment networks. Cairo Angels was founded in 2012 and has played a pivotal role in providing startups with funding. Over the years, they have been instrumental in funding over 36 startups across various sectors, contributing significantly to the continent's growing tech ecosystem.
In March 2023, they participated in a $1 million seed raise for Nigeria's last-mile delivery startup; Fez Delivery.
HoaQ is a community of creators and operators backing entrepreneurs in building scalable businesses for Africa and its Diaspora. It was co-founded by Nubi Kay and Joe Kinvi in 2020. They look out for founders with domain expertise, and technical know-how, and who have attained some traction within a large defined opportunity.
The club is made up of professionals from the diaspora, who are interested in backing early-stage startups, looking to diversify their investment portfolio and put their savings to work, and interested in learning about early-stage Ange investments. They are inclined to participate in pre-seed, seed, or Series A round of funding.
HoaQ has notably invested in startups in over 60 startups such as Brass, Truq, Clafiya, Kunda Kids, Payday, Spleet, etc.
This Angel network is a female-focused fund that is hoping to address the gap of access to capital for female tech entrepreneurs in Africa. The fund was founded in 2021 and it provides between $15,000 to $25,000 in female-led teams and sees them through the ideation stage to a significant pre-seed round within 12 months.
The fund is also open to investing in mixed co-founder teams, with at least one woman but the caveat is that the woman is a true partner and decision maker, with a significant, equitable split of the founder equity.
The fund was founded by Eloho Omame and Odunayo Eweniyi, they have invested in startups like Jumba, Akiba, Pivo, Foondamate, etc.
Renew Capital Angels
This network was founded in 2007. It is an active community of accredited investors seeking sustainable impact in Africa alongside financial returns. This diverse network of individuals and families operates in 9 countries with 200-plus members and offers an average check size of $236,000. They've invested in startups like Xente, Wazi, Badili, etc.
This is a female-focused angel fund was founded in 2019, and is led and funded by experienced businesswomen. The angels not only invest money, but they also invest their time, skills, and networks, which they believe is where the true value lies.
They have a thesis of looking for Zebras and not unicorns, and equality for and empowering women is an integral part of their culture and DNA. They have invested in startups like Sorted, CreditAls, Kweza, etc.
Midlothian Angel Network(MAN)
Founded in 2021 by Wale Salami, MAN connects Angel investors with high-growth startups. They also provide their member Angels with access to a wide range of industry expertise across their network in assessing investment opportunities. Their members invest in seed and early-stage startups solving Africa's challenges using creativity and tech in Africa.
According to Crunchbase, their most recent investment is a $300,000 investment into Mainstack in Dec 2022. They have also invested in startups like Kyshi, Vesti, SmileID, Payday, etc.
Lagos Angel Network (LAN)
LAN is an exclusive network of Angel investors founded in 2012, it aims to enable the Nigerian and broader African ecosystem by educating angel investors, helping to facilitate angel investments into promising early-stage startups and advocating for sustainable private and public sector policy. Lagos, often referred to as "Africa's Silicon Valley," benefits greatly from LAN's presence. They have invested in startups like Flutter, Big Cabal Media, Trove, etc.
In conclusion, these networks facilitate much-needed funding for startups at their earliest stages, transforming innovative ideas into thriving businesses. But their significance transcends financial support. Seasoned investors within these networks go further to share their experiences, offering invaluable mentorship and counsel.
Through partnerships and connections, startups also gain access to resources that can help them navigate the complexities of the ecosystem.
These networks have already left their mark, which is fostering the growth of pioneering African startups. With the continent's tech ecosystem still unfolding, the role of these angel investment networks is set to become even more crucial.