Between 2019 and 2021, there was a buzz around African startups, with venture capital pouring in, reaching $4 billion in 2021 from just $1.3 billion in 2019.
With interest rates at rock bottom in many Western countries, investors flocked to African startups, seeing them as potential goldmines for big returns. But by 2022, the hype was cooling down as investors became more cautious.
Now, fundraising is no cakewalk in the park for founders or investors. Startups are finding it tougher to raise money, and even experienced fund managers are struggling to convince investors to put their money into venture capital.
Angel investors, too, are pulling back, especially as interest rates rise, making other investment options look more appealing.
Fund closes are taking longer, with many venture firms raising funds below their initial targets. Despite these hurdles, Bernard Ghartey, Investment Manager at Norrsken22, sees a silver lining.
