VC4Africa Says $26.9 Million Invested In African Startups In The Past Year

New research by startup funding platform VC4Africa shows considerable progress made by early-stage growth companies across Africa. This is an annual study on the various startups across Africa and the study aims to gather facts and data about startups in Africa in relation to funding and growth.

The VC4Africa 2015 report shows an increasing number of African businesses successfully growing their operations over time. They generate an increasing amount of revenue and add new jobs to the African market place.

VC4Africa aims to be the world’s leading social network for entrepreneurs and investors in Africa.

The VC4Africa community has over 17,000 members in 159 countries, including 600 investors.

2000 entrepreneurs in Africa present their companies on the platform: early stage ventures that require investments less than USD 1 million. Each venture is scalable, makes smart use of technology, or is disruptive in their application of a business model.

There is little information available on this emerging segment and there are few comparative studies. Therefore, VC4Africa reached out to entrepreneurs and investors part of the community to find out more about their progress and gather data. While VC4Africa’s data sets do not represent the total African investment space, the research certainly indicates key trends.

The VC4Africa Report which is available as a summary and the extended edition goes deep into Venture Financing in Africa and highlights it’s findings in the report. The report breaks down insights across 5 indicators: employment, performance, investments, investors and ecosystem. Here’s a brief summary of the the 5 indicators, in other words, the summary of the summary of the report, Inceptosummary.

Employment

According to findings, over the course of 2014, the average team size for a venture increased by 54%, resulting in 5.7 jobs per venture. The same ventures expect to quadruple their team size by the end of 2015. Growth.

Performance

49% of the ventures start generating revenue in their first year of operation. By their fourth year, 34% of the ventures expect to book more than USD 100K in annual revenue.

Investments

44% of the ventures are successful in securing external capital investment. The average capital secured per venture increased from USD 129,348 in 2013 to USD 205,374 in 2014, otherwise an increase of 59%. Nigeria had the most investments in the year.

Investors

Of the 600 investors part of the community, 82% invested in an African venture. Angels represent one-third of the network, followed by Venture Capital firms and Social Impact Funds.

Ecosystem

The ventures that participate in sector events, or join an incubator or accelerator, secure on average USD 126,090 in external investment. This is 23% more than their counterparts who do not participate in such programs.

You can read the summary of the report here or become a Pro member of VC4AFRICA and get the full version.