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Venture capital (VC) is becoming an increasingly crucial catalyst for economic growth in Africa, especially as the continent focuses on inclusive development. Launch Africa Ventures’ Managing Partner, Jana Du Plessis, recently shed light on this growing trend during an interview with CNBC Africa.
For the past 15 years, venture capital investment in Africa has demonstrated significant growth, albeit nascent compared to other global markets. An impressive total of approximately $20 billion has been invested so far, with a noticeable surge during and post-COVID. “At the height of 2022-2023, around $6.5 billion was invested in early-stage technology companies,” Du Plessis noted, emphasizing the robust interest in African startups despite global economic uncertainties and downturns.
Currently, the African tech landscape comprises about 6,000 companies actively seeking capital, with a remarkable 1,000 startups receiving funding in the past 18 months alone. The region has also witnessed the emergence of 13 unicorns, companies valued at over a billion dollars, further highlighting the dynamic VC space in Africa.
Beyond investment, Du Plessis is deeply involved in tackling challenges unique to the African venture capital environment. Her recent novel delves into the critical issue of illicit capital flows—a problem costing Africa over $90 billion annually, equating to 4% of the continent’s GDP. In the VC realm specifically, $2 billion out of a $15 billion total investment since 2019 has been lost to illicit activities.
“I am passionate about storytelling,” Du Plessis said, “and I chose to author a novel that brings attention to this pressing issue in an engaging yet informative format.” Her fictional work, set across nine African cities, uses the creative tale of two intelligence operatives to explore the real-world consequences of financial leakage predominantly occurring within the private sector, often overshadowed by governmental corruption narratives.
In forging a path forward, Du Plessis emphasizes the pivotal role of technology transformation, especially among Africa’s younger generations. Over the past few decades, mobile technology has revolutionized many sectors on the continent, a leapfrog innovation that now finds its equivalent in artificial intelligence (AI). “We are witnessing a rising tide of innovation among young African entrepreneurs, particularly in the AI space,” she highlighted.
Nevertheless, for Africa to fully harness this technological wave, key infrastructure developments are necessary. This includes establishing data centers and supportive regulatory frameworks. As Du Plessis articulated, “Artificial intelligence represents our next mobile phone moment. We must be prepared with the right environment to ensure technological advancements improve the quality of life for Africans across the board.”
Ultimately, empowering the African VC space requires a concerted effort across sectors to foster sustainable ecosystems where innovative ideas can flourish—paving the way for a prosperous future for the continent.
