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Scaling Africa’s tech ventures to exit this decade

The last decade was an important experiment in Africa tech ventures moving out of the “labs” and becoming real businesses that saw investors backing them with so much capital that from 2014 to 2019, the total number of VC deals doubled every year until the advent of COVID-19, which disrupted global economic activities in 2020. However, 2020 saw some notable exits including World Remit’s acquisition of Sendwave for $500MNetwork International buying DPO for $288M and Stripe taking over Paystack for $200M to enter the African market as Egypt’s Fawry gain unicorn status. The IPO of Fawry the third Africa tech venture reach market capitalization of over $1 billion after Jumia and Interswitch was oversubscribed 30 times. 2020 ended with another notable exit, with two initial shareholders in Ghanaian fintech startup, Zeepay, exiting from an initial investment of about USD24,000 in 2015 for USD940,000 on December 21st, 2020 – a remarkable 3,800% return on investment (ROI) in 5 years. This suggests that the risk profile of emerging tech ventures in Africa may be high but the returns could be outrageously rewarding. Case Study II: the early investors in Nigeria’s IrokoTV who invested $80,000 for 10% stake over 5 years realized an ROI of 3000% after selling the same stake (secondary shares) for $2.4 million. Case Study III: The angels who invested in the seed round of Paystack back in 2016 made ~1,440% ROI. That is 14.4x their money in 5 years.

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