A recent report from the African Business Angel Network (ABAN), revealed that the Fintech sector has maintained its position as Africa’s most prominent sector, with 30% of Angel investors participating in fintech funding deals from 2016 to 2024.
This year’s report draws on a rich combination of primary and secondary data, showcasing the critical role angel investors play in nurturing Africa’s innovation and investment landscape. Insights were gleaned from survey responses by over 110 angel investors who have backed startups across the continent’s 54 countries.
The fintech sector also continues to attract the most significant share of funding, supported by specialized investment funds like RaliCap, Lendable, and Quona Capital. While fintech is not always perceived as a high-impact sector, its contributions to financial inclusion and its ability to enhance other industries through integrated solutions underscore its transformative potential. Nevertheless, in recent years, a diversification trend has emerged, fueled by venture funding slowdowns and saturation in certain fintech verticals.
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Since 2023, there has been a trend toward diversification, resulting in increased participation in non-fintech deals. Angel investors are increasingly exploring opportunities in sectors like logistics and mobility, healthcare, education, and agriculture. These industries offer promising financial returns.
This year’s findings reveal agriculture and agtech as the most popular sectors among angel investors, given their potential to drive significant social and economic impact. However, despite this growing interest, agtech funding volumes declined in 2023, reflecting broader market trends.
Angel Investors as Catalysts for Early-stage Growth
Angel investors are pivotal in bridging the funding gap for early-stage startups. Collectively, they have invested over $35 million in African startups between 2008 and 2023, primarily in seed (47%) and pre-seed (40%) funding rounds. These investments provide patient capital, enabling entrepreneurs to validate and scale innovative solutions.
Most angels typically write small cheques ranging from $1,000 to $25,000. However, as they gain experience, some expand their roles to include mentoring, governance, and follow-on funding for mid to late-stage startups.
Several angels also transition into managing larger funds or targeting later-stage startups with more structured investment strategies. Notable examples include Acasia Ventures and Voltron Capital, which have evolved to play more significant roles in Africa’s investment ecosystem. The diversification of Africa’s angel investing ecosystem signals a maturing market with a broader focus on sectors that offer both impact and returns. With initiatives like ABAN’s Climate Smart Agriculture Network and support from international stakeholders, the future of angel investing in Africa looks promising.
As angel investors continue to drive innovation, mentorship, and growth, their contributions will be instrumental in shaping Africa’s entrepreneurial and economic landscape. This year’s Africa’s Angel Report not only sheds light on these trends but also underscores the importance of building sustainable and impactful investment practices across the continent.
