How Angel Investing is Powering
Africa’s Startup Ecosystem

• 1. Providing Capital and Mentorship 

Angel investors do more than provide financial backing; they offer strategic guidance, access to industry expertise, and key business networks. Many early-stage African entrepreneurs lack structured mentorship, making angel investors crucial in bridging knowledge gaps and refining business models. 

For instance, Tomi Davies, through his work with the Lagos Angel Network (LAN), has mentored and funded over 100 startups in Africa, providing them with the support necessary to navigate early-stage challenges. One of LAN’s early investments was Tizeti, a Nigerian startup providing affordable solar-powered internet. Thanks to LAN’s mentorship and funding, Tizeti expanded rapidly, serving thousands of households and businesses across West Africa. 

• 2. Early-Stage Risk-Taking and Funding Gaps 

Traditional banks are often reluctant to provide loans to startups due to a lack of collateral and high perceived risk. Angel investors fill this critical funding gap, injecting anywhere between $10,000 to $500,000 in the early stages of a business before venture capitalists step in. 

A notable example is Andela, a Nigerian startup focused on training African software engineers. Initially funded by local angel investors like Iyinoluwa Aboyeji, Andela built its proof of concept before attracting major investors like Mark Zuckerberg’s Chan Zuckerberg Initiative and GV (Google Ventures). Today, Andela is one of Africa’s most recognized tech companies. 

• 3. The Power of Diaspora Investment 

Africa’s diaspora community plays a significant role in angel investing. Many African entrepreneurs abroad reinvest in their home countries, leveraging their international networks to provide capital, mentorship, and business partnerships. 

A prime example is Flutterwave, a Nigerian fintech startup that received substantial support from diaspora investors before securing $170M in Series C funding. Co-founder Olugbenga Agboola, with backing from diaspora angel networks, successfully positioned Flutterwave as a leading payments infrastructure provider in Africa, processing billions of dollars in transactions annually.

Flutterwave (Nigeria) 

One of Africa’s most successful fintech companies, Flutterwave, began with angel funding from diaspora investors and local business leaders before attracting global venture capital. Today, the company is valued at over $3 billion and operates in more than 30 countries. 

Paystack (Nigeria) 

Initially backed by angel investors like Michael Seibel (Y Combinator) and Justin Kan, Paystack built an innovative payment platform that enabled African merchants to process online payments efficiently. Stripe later acquired Paystack for $200M, marking one of Africa’s largest startup acquisitions. 

Andela (Nigeria) 

Andela started as a small coding school in Nigeria before gaining angel investment from local tech leaders. With early support, it expanded operations, eventually attracting investments from the Chan Zuckerberg Initiative and Spark Capital. Andela now connects African developers with global companies, transforming Africa’s software engineering talent pipeline.

If you’re interested in supporting Africa’s startup ecosystem through angel investing, here’s how you can get started: 

1. Join Angel Networks 

   • African Business Angel Network (ABAN): The largest pan-African network for angel investors. Lagos Angel Network (LAN): Focuses on Nigerian startups. Viktoria Business Angels Network (VBAN): Based in East Africa.

2. Identify High-Growth Sectors 

   • Investing in the right industry is crucial. Africa’s fintech, agritech, healthtech, and e-commerce sectors are experiencing massive growth due to increasing digital adoption and economic expansion. 

3. Partner with Local Accelerators 

   • Accelerators like Google for Startups, Y Combinator, and Seedstars provide early access to promising African startups. Many investors begin by mentoring or judging startup pitch events before making investments.

4. Consider Co-Investment and Syndicates 

   • If you’re new to angel investing, syndicate investing allows multiple investors to pool funds, reducing individual risk while supporting a greater number of startups.

Angel investing is a transformative force in Africa’s startup ecosystem, providing essential capital, mentorship, and global networks for early-stage businesses. With an increasing number of high-growth startups emerging across the continent, there has never been a better time to invest in Africa’s future. 

For those looking to enter the African startup investment landscape, joining an angel network, identifying promising industries, and leveraging diaspora co-investment are crucial steps to making a meaningful impact. 

If you want to be part of Africa’s next wave of innovation, now is the time to start investing.

Information Sources:

• African Business Angel Network (ABAN)

• When Cash is Not Always King

• How Paystack’s Angel Investors Fueled Its $200M Exit

• The Role of Diaspora Investment in Africa

• Tomi "TD" Davies shares his framework to invest in African Startups | Beyond the Pivot Podcast Ep. 8