| | DECEMBER 20229CIOReviewand Europe, Africa had only 0.2% of deals".Energy Access Ventures (E3) has recently closed its second fund, investing in early stage African cleantech companies but with an average of $5m investment into 15 companies, the allocation of the first fund, shows that this is just a drop in the ocean. Even more importantly is the question, who supports these investments when they require scale up funding of a different magnitude. For Life sciences, the continent is showing an increase in bio-technology investments, especially in food security, but a large number of the investments are Grant driven and don't scale beyond Proof-of-Concept stage, due a limit of funding available to scale.More than 60% of venture capital in Africa flows into FinTech and more than two-thirds of mega-deals are attributable to the sector. Africa is recognised as a global hotbed of financial innovation, driven by mobile money with the continent accounting for about half the world's mobile-money customers. The reason for this is that about 30% of the total African population are still without access to traditional banking and other financial services. Fintech has the potential to leapfrog the traditional banking sector and expand financial inclusion across the continent. But with Africa as a continent being as diverse as it is, the success in one country does not automatically mean that expansion into the next country can follow the same go-to-market approach, again requiring deeper pockets to invest into customer acquisition to get to scale. Investments from influential global investors like Peter Thiel, Jeff Bezos, Tiger Global, Dragoneer and many other global investors and corporates demonstrate that Africa as an investment destination is starting to get globally recognised beyond the traditional impact investment focus, signalling a change in risk and return perception in African startups. Leading Silicon Valley VC Andreessen Horowitz made its first ever investment in an African startup, joining Carry1st's Series A, accompanied by Google and Avenir Growth, another $2 billion growth stage investor. But while the investment from such highly recognised global investors is very positive, it does not solve the problem for the majority of African tech startups. Tech funding is dominated by money from outside Africa, with international investment accounting for 73 per cent of VC deals in 2020. This could go some way to explaining why nearly 20 per cent of funded African startups have their headquarters in North America ­ it is a useful strategy for those who need to meet the compliance requirements of foreign VCs. In order to widen the diversity of tech startups securing investment, Africa needs more local funding sources and more with deeper pockets to enable African funders to raise the funding required to properly scale. In conclusion, Africa is the world's second largest and second-most populous continent, after Asia in both cases.Africa is home to some 30 percent of the world's mineral reserves, eight per cent of the world's natural Gas and 12 per cent of the world's oil reserves. It has the world's youngest population, highest growth rate in digital first adoption and most importantly, is a continent that has so many fundamental problems to solve and is leapfrogging rather than following established patterns. Innovation in technology, business models or simply totally rethinking how to approach solving for problems is what Africa is all about ­ the dream of any investor looking for large opportunities and pioneering into unchartered territory. The diversity of the nature of investments available in unparalleled ­ from leapfrogging technology, using first world technology to solve third world problems. Impact innovation to cutting edge innovation applicable globally. Africa needs more Venture Capital to be globally competitive ­ to seed innovation and then take it to scale. Success breeds success, so we need to deliver success stories with less capital intense solutions to enable larger capital allocations to African Fund Managers. If Africa's tech sector had the capital in proportion to its potential ­the return for all stakeholders would go so much beyond. 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
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