The African Catalyst

Amplifying Africa’s Burgeoning Tech Scene

Author

CatalyzU Team
April 23, 2024

Hello African Catalyst,

Seasoned VC experts know that identifying high-potential startups hinges on understanding how they gain traction and scale. Data shows that investors continue to emphasize these metrics during the early stages of a startup.

Paystack, Interswitch, Andela and Jumia are good examples of African startups that were able to leverage traction metrics in their early stages to demonstrate the potential value of their business models, helping them get access to funding and a higher valuation. 

In a tough funding environment, founders with strong traction and sustainable growth tend to attract money and have higher chances of long-term viability. 

For this reason, I’m looking forward to unpacking Traction and Growth metrics at our webinar tomorrow, 24 April. This event is our second webinar in the VC Metrics series.

We’ll unpack what they are, why they matter and how to craft narratives around them. To join the conversation, sign up here.

See you there,
Anthea
Head of Platform & Community

PS: Fellows on our new ‘How to Startup’ Fellowship, in partnership with Future Africa, will have the opportunity to delve deeper into startup metrics VCs care about with lecturers like Iyinoluwa Aboyeji, Africa’s only 2x unicorn founder, and Mia von Koschitzky-Kimani, co-founder of Future Africa. If you’d like to find out more, check out the fellowship here.

African startups raise $466 million in Q1

Over 120 African startups successfully raised funding in the first quarter of 2024. The total funding raised, however, represents a decline YoY (-47%) and QoQ (-27%) compared to 2023 signalling a continuation of the tough funding environment we saw last year. 

Quick facts:

  • Nigerian startups lead the way attracting 35% or approximately $160m of total funding.

  • The Uber-led $100m investment in Moove is the largest single equity deal so far this year.

  • Transport and Logistics emerged as the most attractive sector (32% ~ $151m).

Check out Africa: The Big Deal for a full funding report.

Highlights from our ‘How to Startup’ Launch in Nairobi

Speakers L-R: Mia von Koschitzky-Kimani, Peng Chen, Michelle Hassan, Karl Nchite

"The more confident you are about what you are building, the easier it is to find the right investors to talk to." - Peng Chen, HustleSasa

On 19 March 2024, CatalyzU in partnership with Future Africa, launched the ‘How to Startup’ Fellowship at an event that fostered and celebrated entrepreneurship. Reflecting on a successful evening in Nairobi, we're overwhelmed with excitement for the future of African startups. More information on the new fellowship below.

Vacancies

👉To find out more, email Benjamin Udokwu.

Describe your current job.
I work as a management consultant at one of South Africa's largest independent management consulting firms. Although my role changes according to the project I work on, I often work with large South African corporations, assisting them with strategising and implementing their strategic initiatives. I am currently working at a large South African food retailer, assisting them with a strategic initiative to attract new customers to their brand and grow their market share.

One career highlight since completing the CatalyzU fellowship?
The growth of my network. The VC space is a tough one to break into, the industry largely recruits from networks for any open positions. As such, growing your network is vital.

What's one trend you're currently obsessed with?
ClimateTech has been my long-time passion, and I'm so excited to see it get the attention and investment it's been receiving lately. Especially, within a South African context, innovative energy solutions have been all the rage given the country's energy crisis, and I have no doubt that it is only the beginning for innovative, sustainable and clean startups to change the way South Africans live, and empower us to live more independently. 

Any lightbulb moments during the Fellowship?
VCs need to be "in it" for the long run. Prior to the program, I never truly understood the dilution effects of multiple funding rounds. On the surface level, one thinks that the more money coming in the better. But the inverse relationship between funding and equity means that the more resources founders bring, the lesser the share of the business they now own. From an investor perspective, investing in a startup is a long game, you need to be able to defend your stake in a startup through each funding round to maximise your returns post-exit.

The type of person would you like to have coffee with next and why?
I'd love to sit and chat with Dev Patel, the star of Monkey Man. He braved the pandemic on an island, multiple injuries on set and limited resources to bring his vision to life, and not only has he succeeded in producing an excellent movie, but he set a historic precedent that I have no doubt has inspired South Asians across the globe. Dev Patel produced a movie, with a predominantly Indian cast, that didn't follow the typical Bollywood format. He respectfully infused different cultural nuances and pertinent societal issues into an entertaining and mind-blowing piece of art.

One piece of advice for incoming fellows?
Be the person that asks too many questions. You're more likely to spark interesting conversations and build relationships. Moreover, the VC industry is largely built and sustained on the relationships you build, so this will serve you well in the future.

To hire candidates like Shailin, fill out this form.

  • Forbes Africa has released its latest 30 under 30 cohort. Our very own Luke Mostert made the cut for this year’s class.

  • Founders Factory Africa partnered with Flat6Labs for the upcoming Tech Startups Bootcamp in Nigeria (14-15 May 2024). To participate, see details here.

  • Are you a founder of an African Fintech or embedded finance start-up trying to raise a $200k-$2M round? Be considered for funding from the Verdant Frontiers Fintech Fund. Learn more.

  • TLcom Capital doubles the previous amount to raise $154mn for start-ups in a move that could help ease sector gloom - read more here.

  • From 5-6 May, Botswana will be hosting the Forbes Africa 30 under 30 summit in Gaborone. More details here.

  • Kigali will be playing host for this year’s Africa CEO Forum, taking place on the 16-17 May 2024. Registration details here.

  • Where business meets innovation, VivaTech takes place in Paris from 22-25 May 2024. More information here.