| | DECEMBER 20228CIOReviewIN MY OPINIONTECH IN AFRICA ­ THE MOST UNDERFUNDED BILLION DOLLAR OPPORTUNITYI am a partner at Knife Capital, a South African Venture Capital firm, founded in 2010, and investing in innovation driven ­ technology enabled (South) African companies at Series A and B stage. By globally accepted understanding, Venture Capital provides funding support for technological innovation in start-ups as scaling technical innovation is considered the fastest way to generate value and realise the returns investors require. Tech start-ups account for nearly 70% of total venture investments.Investments in so called Key Enabling Technologies from cleantech, micro-electronics, nanotechnology, photonics, industrial biotechnology, advanced materials and advanced manufacturing sectors hold deeply transformative power over our daily lives and are as such considered the most attractive investments for VCs as they stand at the forefront of the next wave of innovation and are instrumental in bridging the digital-physical divide.The tech revolution continues to redefine what is possible for individuals, countries and societies. Technology can help to address inequalities, manage the climate crisis, transform food production, democratise education and health care ­ with all of it even more relevant given the African context. As such Venture Capital could be a key driver for Africa's progress on many levels. Africa has suffered from underinvestment for decades. The amount of Venture Capital invested in Africa equals to about 2% of the global Venture Capital industry, with South Africa holding about a third of it. The question therefore arises ­ can (South) African Venture Capital really support technology companies? And does the size of the investment capital available influence the kind of innovation and technology that is able to succeed? And how big could this opportunity be for investors if the market was adequately capitalised? Africa is one of the fastest growing venture capital markets globally. Venture Capital deals pumped more money into Africa in 2021 than the preceding seven years combined, breaking all sorts of records and marking a 104% increase from 2020. However, the median deal size in Africa is $1.65m compared to $14m in the United States. With a difference of this magnitude, it is obvious that only companies that require lesser investment amounts will be successful. And that despite receiving funding, companies are still being throttled in comparison to their international competitors, having to adapt their business model to either do with less or simply do less. Life Sciences and Cleantech are known to be capital intensive until they provide any return to investors ­ however investments across the globe, especially in Cleantech due to increased ESG requirements are booming.According to The Africa Report "While close to 93% of climate tech investments went to the USA, China By Andrea Böhmert, Partner, Knife CapitalAndrea Böhmert
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