The tide is rising for climate tech in Africa. Fueled by a surge in investor interest, the sector is witnessing a wave of innovation, with over 3,000 startups pitching their solutions for a climate-resilient future.
A new report, “Investing in Climate Tech Innovation in Africa,” by Catalyst Fund, dives into the dynamics of this burgeoning sector, offering invaluable insights for investors, innovators, and stakeholders alike.
Africa’s CleanTech landscape is experiencing an unprecedented boom, fueled by a combination of abundant renewable resources, a growing green consciousness, and significant international investment.
But clean energy investments remain concentrated in just a handful of countries while much of the continent’s clean energy potential remains untapped. The IEA estimates that Africa requires $2 trillion in investment to close this gap.
Foreign investors are keenly aware of this opportunity. In 2022, the sector led foreign direct investment into Africa, according to the Africa Attractiveness Report by global consulting giant EY, further cementing the technology industry’s central role in driving investments into the continent.
If you’re a keen follower of the African tech ecosystem, you must’ve heard of the Paystack, Careem, and Opay Mafia(s) by now.
But have you ever heard of the Jumia Mafia?
For people not familiar with the name, though we hope there’s none, let’s give you a brief introduction to the company.
Jumia started as an online retailer in Nigeria in 2012, co-founded by Jeremy Hodara and Sacha Poignonnec, ex-McKinsey consultants along with Tunde Kehinde and Raphael Kofi Afaedor.
The company has since expanded to at least nine other African countries, where it offers several services, including digital payments and delivery.
In April 2019, the e-commerce operator became the first African startup to list on a major global stock exchange when it debuted on the New York bourse.
One fact about Jumia that’s equally as impressive—as its NYSE IPO or standing as the continent’s largest e-commerce operator—but often overlooked is the impact that the company has had on Africa’s entrepreneurial ecosystem.
Jumia has not only made waves in the African tech industry but also inspired a new generation of entrepreneurs who now run their respective exciting startups.
Some of them include:
These are just some of the incredible startups that have been created by former Jumia employees.
Jumia is one of Africa’s earliest tech companies and ranks among the region’s biggest startup success stories.
So it comes as little surprise that former employees and founders have gone on to create their own incredible technology companies, disrupting various industries across the continent.
By sector classification, well over half, or 70% of startups founded by Jumia alumni are either in retail, e-commerce, foodtech, or fintech.
This suggests that Jumia’s early success as an e-commerce giant has created a positive spillover effect, as former employees leverage their experience and networks to create new businesses in related industries such as retail, last-mile delivery & logistics, and digital payments – all crucial components of e-commerce.
Naturally, working in a particular industry provides individuals with valuable insights into the workings of that industry and complementary ones.
Hence, ex-Jumia employees are well-positioned to leverage their expertise and create innovative solutions to meet the needs of consumers in these industries.
And they’re doing so, successfully and with sufficient VC backing.
Collectively, about 14 of such startups we tracked have raised around $330 million in venture capital funding, with over half of them at the seed stage or above.
This shows the talent and expertise that exists within the Jumia ecosystem, which has helped to create a vibrant startup culture out of emerging markets where it operates.
The funding also signals the emergence of a new generation of innovators who are able to attract significant investment and build successful businesses—a positive development for the tech industry.
In addition, it reflects how the African startup ecosystem is becoming increasingly mature and sophisticated, with successful companies spawning new ventures and nurturing the next generation of entrepreneurs.
Altogether, these startups have created around 1,300 direct jobs.
Jumia has served as a springboard for talented individuals who are contributing to the growth of not only Africa’s startup ecosystem but also globally, even after leaving the company.
It’s impressive to see how the e-commerce giant’s success has paved the way for some of Africa’s most brilliant ‘techpreneurs’.
Truly, great companies have the power to inspire incredible founders and fuel the growth of an entire entrepreneurial ecosystem!
By doing so, they help to build a stronger economy and a better future for all.
Not all Africans are poor. This is arguably the key takeaway from the 2023 edition of the annual Africa Wealth Report by London-based Henley & Partners and New World Wealth, which challenges the common stereotype that Africa is uniformly poor.
The study, a definitive guide to African wealth, takes a close look at private wealth on the continent. Africa’s wealth is concentrated in five key markets: South Africa, Egypt, Nigeria, Kenya, and Morocco but their dominance could potentially be challenged by emerging economies like Mauritius and Rwanda, which could see a potential shift in the dominance of these wealth markets over the next decade.
Dans le paysage commercial dynamique d’aujourd’hui, les startups se sont imposées comme les moteurs de l’innovation, perturbant les industries traditionnelles et façonnant l’avenir.
Ce post vise à démystifier le monde des startups, en éclairant ce qu’elles sont, comment fonctionne l’investissement dans les startups, comment les investisseurs peuvent gagner de l’argent en investissant dans les startups, et le processus de sortie d’un investissement dans une startup.
Une startup est une jeune entreprise à ses débuts, généralement fondée par des entrepreneurs avec une idée révolutionnaire ou une solution unique à un problème.
Les startups se caractérisent par leur potentiel de croissance rapide, leur évolutivité et leur vision de perturber ou de créer de nouveaux marchés. Elles opèrent souvent dans des secteurs axés sur la technologie, mais peuvent s’étendre à diverses industries.
L’investissement dans les startups consiste à fournir un soutien financier à des entreprises en phase de démarrage en échange d’une participation au capital.
Ce processus se déroule généralement lors de différentes phases de financement, où les startups lèvent des capitaux pour stimuler leur croissance. Les investisseurs peuvent participer à ces étapes ou phases de différentes manières, comme l’investissement providentiel, les fonds de capital-risque ou les plateformes de financement participatif.
En règle générale, l’investissement dans les startups se déroule à différentes étapes, notamment le démarrage, la série A, la série B, etc., jusqu’à l’introduction en bourse (IPO) et la sortie, etc., chaque étape représentant une phase distincte de la croissance et du développement d’une startup.
Il est important de noter que toutes les startups ne passent pas par toutes ces étapes, et la chronologie et les besoins de financement peuvent varier considérablement.
Lors de l’investissement dans les startups, la due diligence est cruciale. Les investisseurs analysent en profondeur le modèle commercial de la startup, son potentiel de marché, l’expertise de l’équipe, le paysage concurrentiel et les projections financières.
En menant des recherches approfondies, les investisseurs peuvent identifier les startups prometteuses ayant plus de chances de réussir.
Investir dans les startups offre le potentiel de rendements significatifs, mais comporte également des risques plus élevés par rapport aux voies d’investissement traditionnelles. Voici quelques moyens pour les investisseurs de gagner de l’argent grâce aux investissements dans les startups :
Appréciation du capital : À mesure qu’une startup se développe et atteint des étapes clés, la valeur de ses actions peut augmenter. Les investisseurs qui ont acheté des actions à un stade précoce peuvent bénéficier de l’appréciation du capital lorsque l’entreprise réussit et attire d’autres investissements ou devient publique.
Dividendes ou distribution de bénéfices : Certaines startups peuvent générer des bénéfices à un stade précoce. Dans de tels cas, les investisseurs peuvent recevoir des dividendes ou des distributions de bénéfices, fournissant ainsi un flux de revenus régulier.
Acquisition ou fusion : Les startups dotées de produits ou de technologies convaincants deviennent souvent des cibles d’acquisition attrayantes pour de plus grandes entreprises. Si une startup est acquise ou fusionne avec une autre entreprise, les investisseurs peuvent réaliser un profit de la vente de leurs actions. Par exemple, Instagram, l’application populaire de partage de photos, a été acquise par Facebook en 2012 pour environ 1 milliard de dollars. Cette acquisition a généré des rendements importants pour les investisseurs de première heure.
Introduction en bourse (IPO) : Une autre stratégie de sortie potentielle pour les investisseurs dans les startups est une IPO. Lorsqu’une startup devient publique, les investisseurs peuvent vendre leurs actions sur le marché boursier, réalisant des gains si la valorisation de l’entreprise a augmenté. En 2019, le géant du commerce électronique africain Jumia est entré en bourse, offrant à ses premiers investisseurs la possibilité de sortir et de réaliser des profits.
Marché secondaire : Les investisseurs peuvent vendre leurs actions sur un marché secondaire, où des investisseurs privés achètent et vendent des actions de sociétés non cotées en bourse. Cela permet aux investisseurs de sortir de leurs investissements avant une IPO ou une acquisition. SharesPost et EquityZen sont des exemples de plateformes de marché secondaire qui facilitent l’achat et la vente d’actions de startups.
En conclusion, investir dans les startups peut être une entreprise gratifiante mais risquée. Comprendre la nature des startups, effectuer une due diligence approfondie et diversifier son portefeuille d’investissement sont des étapes essentielles pour réussir dans l’investissement dans les startups.
L’Afrique offre non seulement une richesse culturelle et des paysages à couper le souffle, mais elle propose également d’incroyables opportunités d’investissement.
Cependant, investir sur le continent demande de la patience, car les stratégies qui réussissent dans un pays peuvent ne pas fonctionner dans d’autres.
Dans cet article, nous explorons cinq raisons convaincantes pour lesquelles vous devriez envisager d’investir en Afrique, même si vous résidez en dehors du continent.
L’Afrique compte plus de 1,3 milliard d’habitants et est la région la plus jeune du monde, avec près de 60 % de sa population ayant moins de 25 ans et un âge médian de 19 ans.
Le continent affiche également une population en rapide croissance et une classe moyenne en expansion. Selon le Forum économique mondial, d’ici 2030, plus de 40 % des Africains appartiendront à la classe moyenne ou supérieure, ce qui entraînera une demande accrue de biens et de services.
À cette époque, la consommation des ménages devrait atteindre 2 500 milliards de dollars, plus du double de celle de 2015, qui s’élevait à 1 100 milliards de dollars.
Avec l’urbanisation croissante et l’augmentation des revenus disponibles, le continent représente un marché inexploité prêt à être exploré par les investisseurs, offrant un potentiel de croissance considérable dans divers secteurs.
L’Afrique connaît une montée remarquable de l’innovation et de l’entrepreneuriat. Des start-ups fintech aux solutions d’énergie renouvelable, les entrepreneurs africains exploitent la technologie pour résoudre des problèmes locaux et créer des entreprises évolutives.
Le continent a produit au moins sept licornes, des entreprises privées valant un milliard de dollars ou plus.
L’une de ces start-ups est Flutterwave, une licorne fintech nigériane qui révolutionne les paiements numériques à travers le continent. Une autre entreprise remarquable est Andela, une entreprise panafricaine qui met en relation des développeurs de logiciels qualifiés avec des entreprises mondiales.
De plus, Jumia, souvent appelée “l’Amazon de l’Afrique”, est devenue un acteur dominant du commerce électronique.
Ces start-ups innovantes démontrent la montée en puissance croissante de l’Afrique sur la scène technologique mondiale, stimulant la croissance économique et favorisant les avancées technologiques à travers le continent.
En investissant dans les start-ups africaines et les fonds de capital-risque, vous pouvez soutenir ces esprits innovants tout en bénéficiant potentiellement de leurs succès futurs.
L’Afrique a connu une transformation numérique rapide au cours des dernières années, révolutionnant divers secteurs.
Avec la pénétration croissante d’Internet, la connectivité mobile et des solutions innovantes, le continent a adopté la technologie dans tous les aspects de la vie.
Selon la GSMA, l’Afrique ajoutera près de 100 millions de nouveaux abonnés d’ici 2025, portant le nombre total d’abonnés à 613 millions, soit près de la moitié de la population de la région.
De plus, la contribution de l’industrie mobile à son PIB atteindra près de 155 milliards de dollars.
De la banque mobile aux plateformes de commerce électronique, la révolution numérique de l’Afrique permet aux individus de se doter d’outils technologiques, de combler la fracture numérique et de créer des opportunités de développement socio-économique dans tout le continent.
L’Afrique est bénie par une abondance de ressources naturelles qui contribuent de manière significative à son potentiel économique.
Avec d’importants gisements minéraux, le continent détient une part substantielle des réserves mondiales d’or, de diamants, de platine et d’autres métaux précieux. Il est également riche en ressources pétrolières et gazières, avec des pays comme le Nigeria, l’Angola et l’Algérie étant de grands producteurs.
De plus, l’Afrique possède d’importantes réserves de bois, des terres agricoles fertiles et une gamme diversifiée de faune et de flore.
Ces ressources offrent d’immenses opportunités de croissance économique, de développement industriel et d’investissement étranger.
Avec la bonne stratégie d’investissement, vous pouvez profiter de la richesse des ressources du continent et contribuer à son développement durable.
L’Afrique connaît une transformation remarquable vers des économies plus diversifiées et plus fortes. En mettant l’accent sur l’innovation, l’entrepreneuriat et le développement durable, plusieurs nations africaines réalisent des progrès significatifs.
Le continent a assisté à une montée en puissance des avancées technologiques, favorisant la transformation numérique et le contournement des barrières infrastructurelles traditionnelles.
Des pays comme le Nigeria, le Kenya et l’Afrique du Sud sont devenus des pôles technologiques, attirant des investissements mondiaux et favorisant l’émergence de start-ups locales.
Les gouvernements africains soutiennent également des secteurs tels que l’agriculture, les énergies renouvelables et la fabrication pour stimuler la croissance économique et réduire la dépendance aux matières premières.
Les collaborations régionales, telles que la Zone de libre-échange continentale africaine (ZLECAf), promeuvent le commerce intra-africain, ouvrant de nouveaux marchés et encourageant l’intégration économique.
Cette dynamique vers des économies plus diversifiées et plus fortes est sur le point de libérer le potentiel immense de l’Afrique, d’autonomiser sa population et d’offrir aux investisseurs des opportunités passionnantes à travers le continent.
Investir en Afrique offre un monde d’opportunités pour ceux qui résident en dehors du continent.
Avec un marché inexploité, des ressources abondantes, une infrastructure en croissance, un écosystème entrepreneurial dynamique et des politiques favorables, l’Afrique est prête pour la croissance économique et le développement.
Africa is not only rich in cultural heritage and breathtaking landscapes but also offers incredible investment opportunities.
But investing in the continent requires patience as strategies that succeed in one country may not work in others.
In this post, we explore five compelling reasons why you should consider investing in Africa, even if you reside outside the continent.
Africa has over 1.3 billion people and is the world’s youngest region, with almost 60% of its population under 25 years old while the median age is 19.
The continent also boasts a rapidly growing population and an expanding middle class. According to the World Economic Forum, by 2030, over 40% of Africans will belong to the middle or upper classes, and there will be a higher demand for goods and services.
By that time, household consumption is expected to reach $2.5 trillion, more than double that of 2015 at $1.1 trillion.
With increasing urbanization and rising disposable incomes, it presents an untapped market ready for investors to tap into a vast consumer base, which offers tremendous growth potential across various sectors.
Africa is witnessing a remarkable surge in innovation and entrepreneurship. From fintech startups to renewable energy solutions, African entrepreneurs are harnessing technology to solve local challenges and create scalable businesses.
The continent has produced at least seven unicorns—private companies worth $1 billion or more.
One such startup is Flutterwave, a Nigerian fintech unicorn revolutionizing digital payments across the continent. Another standout is Andela, a pan-African company connecting skilled software developers with global companies.
These innovative startups demonstrate Africa’s increasing prominence in the global tech landscape, fueling economic growth and driving technological advancements across the continent.
By investing in African startups and venture capital funds, you can support these innovative minds while potentially benefiting from their future successes.
Africa has witnessed a rapid digital transformation in recent years, revolutionizing various sectors.
With increasing internet penetration, mobile connectivity, and innovative solutions, the continent has embraced technology in all facets of life.
According to GSMA, Africa will add nearly 100 million new subscribers by 2025, bringing the total number of subscribers to 613 million – almost half of the region’s population.
More so, the contribution of the mobile industry to its GDP will grow to almost $155 billion.
From mobile banking to e-commerce platforms, Africa’s digital revolution is empowering individuals, bridging the digital divide, and creating opportunities for socio-economic development across the continent.
Africa is blessed with an abundance of natural resources that contribute significantly to its economic potential.
With vast mineral deposits, the continent holds a substantial share of the world’s reserves of gold, diamonds, platinum, and other precious metals. It is also rich in oil and gas resources, with countries like Nigeria, Angola, and Algeria being major producers.
Additionally, Africa possesses extensive reserves of timber, fertile agricultural land, and a diverse range of flora and fauna.
These resources present immense opportunities for economic growth, industrial development, and foreign investment.
With the right investment strategy, you can benefit from the continent’s rich resources and contribute to its sustainable development.
Africa is experiencing a remarkable shift towards diverse and stronger economies. With a focus on innovation, entrepreneurship, and sustainable development, several African nations are making significant strides.
The continent has witnessed a surge in technological advancements, fostering digital transformation and leapfrogging traditional infrastructure barriers.
Countries like Nigeria, Kenya, and South Africa have emerged as tech hubs, attracting global investments and nurturing homegrown startups. African governments are also supporting sectors like agriculture, renewable energy, and manufacturing to stimulate economic growth and reduce dependency on commodities.
Regional collaborations, such as the African Continental Free Trade Area (AfCFTA), are promoting intra-African trade, opening up new markets, and encouraging economic integration.
Africa’s total exports are projected to reach approximately $952 billion by 2035, driven by the growth of regional trade and enhanced connectivity, according to a new report by Standard Chartered.
This momentum towards diverse and stronger economies is poised to unleash Africa’s immense potential, empowering its people and offering investors exciting opportunities across the continent.
Investing in Africa presents a world of opportunities for those outside the continent.
With an untapped market, abundant resources, growing infrastructure, a vibrant entrepreneurial ecosystem, and favorable policies, Africa is poised for economic growth and development.
Disclaimer: This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients.
Investing your hard-earned money can be daunting, especially with the multitude of options available in the financial market. However, one avenue that has consistently proven to be lucrative over the years is the stock market.
Stocks offer individuals the opportunity to become part-owners of companies and share in their profits.
We will explore what stocks are and why you should consider investing in them.
What are stocks?
Stocks, also known as shares or equities, represent ownership in a company.
When you buy stocks, you are essentially purchasing a small piece of that company, granting you a share of its assets and earnings.
How stocks work
Understanding how stocks work is vital for investors seeking to grow their wealth.
When an investor purchases shares of a company’s stock, they become a partial owner and gain the potential to benefit from the company’s growth and success.
As the company performs well, the value of its stock tends to increase, allowing investors to sell their shares at a higher price and earn a profit.
Let’s say an investor, John, decides to purchase 100 shares of ABC Company at a price of $10 per share. John believes that ABC Company has strong growth prospects due to its innovative products and increasing market demand.
After a few months, ABC Company announces positive earnings results, and the market responds favorably. As a result, the stock price of ABC Company rises to $15 per share. John decides to sell his 100 shares at this higher price. By selling his shares at $15 per share, John earns a profit of $500 ($15 – $10 = $5 profit per share × 100 shares).
This demonstrates how investors can benefit from the appreciation in stock prices but it’s important to note that stock prices can also decline, resulting in potential losses.
As a shareholder, you may benefit from both capital appreciation (an increase in the stock price) and dividends (a share of the company’s profits distributed to shareholders).
Stock prices are influenced by various factors, including the company’s financial performance, market conditions, industry trends, and overall economic outlook.
As an investor, you have to analyze these factors to make informed decisions about buying, holding, or selling stocks, either independently or with the help of an investment advisor.
Investors can choose between different types of stocks, such as common stocks and preferred stocks. Common stocks provide voting rights and the opportunity to receive dividends, while preferred stocks offer a fixed dividend payment but typically do not carry voting rights.
Stocks are bought and sold on stock exchanges, such as the NYSE, NASDAQ, BRVM, NGX, JSE, etc. Investors can trade stocks through brokerage accounts, either by placing market orders (buying or selling at the prevailing market price) or limit orders (specifying a desired price range for buying or selling).
Investing in stocks carries risks, as stock prices can fluctuate, and investors may experience losses. Diversification, thorough research, and a long-term perspective are key to managing risks and maximizing returns in the stock market.
Pros of investing in stocks
Cons of investing in stocks
Why should you invest in stocks?
While there are risks involved, investing in well-established companies or diversified portfolios can provide significant returns over time.
Stocks can be a veritable source of extra income. Many companies distribute dividends to their shareholders, providing a regular stream of income. Dividend stocks can be an attractive option for those seeking consistent returns.
In addition, the flexibility and liquidity that stocks offer allow you to adapt your investment strategy based on changing market conditions or personal financial goals.
While investing in stocks can be rewarding, it’s important to conduct thorough research, diversify your portfolio, and consider your risk tolerance before diving in. It’s also advisable to seek guidance from a financial advisor who can provide personalized advice based on your financial situation and goals.
Overall, stocks represent ownership in companies and offer individuals the potential for long-term growth, dividends, and voting rights. Investing in stocks can be a powerful tool for wealth creation, but it’s crucial to approach it with careful consideration and informed decision-making.
Final Remarks
For those considering an entry into the stock market or diversifying their current portfolio, remember that knowledge is your most potent weapon. Invest time in understanding market trends, diversify your holdings, and never hesitate to seek advice from seasoned professionals. Your financial journey in the stock world begins with a single step, but make sure it’s a well-informed one. If you’re curious and eager to tap into this potential goldmine, start today by researching companies, understanding market dynamics, and staying up-to-date with the latest happenings. The world of stocks awaits – are you ready to dive in?
Disclosures: This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients.
A rapidly growing digital economy in Africa is drawing investments from the world’s biggest tech companies into the continent’s data center market, which is largely untapped.
For over a decade, Africa has been experiencing a massive boom in mobile internet adoption, outpacing other regions globally.
This fast-growing mobile economy has enabled the emergence of several mobile-led tech solutions on the continent, such as mobile money and online shopping.
And the startups providing these services have drawn attention, and billions of dollars in venture funding, from the world’s biggest tech companies and investors.
In 2022 alone, African startups secured $6.5 billion in venture funding, an 8% increase from the previous year, while global VC investments declined -35%.
But it’s not just startups and software solutions pulling investments in Africa’s digital economy.
Foreign capital has also flown into digital, hardware infrastructure, especially data centers.
Oracle, Microsoft, Amazon, Equinix, and Huawei are some big names building or buying data centers across Africa.
Regional operators such as MainOne, Africa Data Centers, Raxio, Icolo.Io (Digital Realty), and IXAfrica as well as the likes of Telecom Egypt, NTT Global Data Centers, Paratus Namibia, Rack Centre, Teraco Data Environments (Digital Realty), and Wingu are also big players in the space.
In 2022, the market also witnessed the entry of investors like Vantage Data Centers, Airtel Nigeria, Cloudoon, Open Access Data Centres, and Kasi Cloud.
For instance, Open Access Data Centres opened more than 20 data center facilities in South Africa and Nigeria.
Together, they’ve invested well over $4 billion in data center projects across Africa since 2021 at least.
But, what exactly are data centers, and why are big tech players racing to build them in Africa?
The first things that come to mind when we hear words like “online”, “digital”, “digital world” or “technology” are probably the internet, social media, mobile apps, business software, etc.
But have you ever wondered where all the information on the internet we access through smartphones or computers is stored?
Well, data centers are like giant warehouses that store and protect all the data we see online.
They’re super crucial for the internet to work smoothly and are the major enablers of online services—think digital banking, social media, streaming services, video calls, and about everything we do online.
Just as a library stores and organizes books for easy access, data centers store and manage an immense amount of digital information.
And with the increasing amount of information and data to store as the digital economy continues to grow rapidly, they have become even more critical.
How does this concern Africa?
There’s a massive opportunity to build these data centers on the continent and make lots of money from it!
Emerging technologies such as AI, IoT, or cloud computing are not new in Africa.
But there has been a recent surge in the adoption of such enterprise digital solutions, especially among mid-to-large businesses across several sectors—a trend mainly induced by the Covid-19 pandemic.
In South Africa alone, the use of cloud computing is expected to grow 25%, generating up to $1.5 billion by 2024.
And seeing this growth, global cloud services providers such as Amazon Web Services, Microsoft, IBM, and Oracle are expanding their presence in Africa with new cloud regions being set up.
Be it enabling consumers to buy food or clothes online or make money transfers via mobile apps, these activities generate huge volumes of data that need to be stored adequately.
This, in turn, creates a higher demand for data centers.
For investors, this presents a great opportunity to fill significant gaps, as most of Africa’s data is currently stored outside the continent.
That leads to slower connections and data privacy concerns.
Messages sent from the continent’s southern tip to Europe and back can take as long as 180 milliseconds, causing frustration for individuals trading stocks or playing video games, per The Economist.
But significant multi-billion dollar investments in data centers are set to change this scenario.
These investments will significantly reduce internet latency and bring it much closer to African users, paving the way for a remarkable advancement in the continent’s digital economy.
More so, African governments are keen to build their data centers to ensure data sovereignty and stay competitive in the increasingly AI-powered world.
As investors increasingly realize the opportunity in Africa’s data center market, the continent has seen a flurry of activities in the space over the last few years.
This ranges from the launch of new or expansion of data centers to millions of foreign investments pouring into operators.
Data from ReportLinker, an AI-driven market intelligence platform, indicate the sector recorded up to $2.6 billion in investments in 2021, including $200 million in debt and equity raised by WIOCC.
Around $5.4 billion is expected to be invested in the next four to five years alone but going by investment trends last year, the continent might smash those estimates!
In 2022, Vantage launched a $1 billion campus in Johannesburg to house three data centers.
Khazna Data Centers is entering Egypt with a $250 million hyper-scale data center.
And in April, Raxio Data Centres secured up to $170 million—from Proparco and the Emerging Africa Infrastructure Fund—for data center projects across multiple African countries.
Alongside huge capital raises, Africa’s data center market has also been seeing major investments in the form of mergers and acquisitions.
One such example is the $320 million acquisition of West Africa operator MainOne by US-based Equinix in 2021.
In the same year, Digital Realty bought Nigeria-based Medallion Data Centers and South Africa’s Teraco Data Environments.
Meanwhile, African Infrastructure Investment Managers (AIIM), a private equity firm, acquired Ngoya Etix Data Centers, all for undisclosed sums.
Most of these deals go unnoticed as digital infrastructure such as submarine cables, fiber optics, telecom towers, and data centers belong in the not-so-shiny segment of the tech ecosystem.
But they’re crucial to the continued functioning of the digital world as most people know it.
Despite the investment deals and figures, Africa still needs way more data centers to match other continents than is currently being built.
Currently, Africa has 17% of the global population but only about 2% of all colocation data centers globally—quite a gap!
For a better perspective, the continent has only 0.1 data centers per million internet users, far behind the global average of 0.9.
And as of last year, it only had five more data centers than the Indian city of Mumbai alone.
To reach the global average, Africa needs around 450 more data centers and 1,500 more to match North America or Europe.
In addition to the growing demand for cloud-based services among businesses, more of these facilities are needed to support Africa’s growing digital population.
The existing data centers on the continent are also very much concentrated in a few African countries.
For instance, Nigeria, Kenya, and South Africa together host about 60% of sub-Saharan Africa’s commercial data centers.
The latter alone has the most data centers in the region and is expected to account for the bulk of Africa’s $5 billion data center market by 2026.
The major data center markets will continue to attract the lion’s share of investment into the sector.
But the good news is that smaller economies such as Ethiopia, Morocco, Algeria, Ghana, Cote d’Ivoire, Zambia, DRC, Namibia, and Rwanda are starting to attract noticeable funding.
They’ve received up to $700 million of capital investment annually for two years now, per research firm Xalam Analytics, which closely monitors the industry.
Big tech’s increasing investments in Africa’s data center capacity expansions indicate significant growth potential for the market.
And it comes as Africa’s digital revolution needs more capacity to support its growing smartphone and internet users, 4G expansion, and 5G rollout.
The increasing number of data centers across the continent also creates new opportunities for telecom players.
It’s a huge opportunity for investors that big tech companies are moving fast to capture, as the numbers show.
Amid a rapidly growing digital economy, we can expect more data center capacity expansion across various countries in Africa.
And as large numbers of data centers along with large power capacities come up, Africa can be called—and rightly so—the next frontier of the data center industry.
Le continent africain devient rapidement l’une des nouvelles destinations les plus prometteuses pour les investisseurs des marchés émergents.
En fait, depuis plus de 20 ans, le Forum économique mondial a identifié que plus de la moitié des économies à la croissance la plus rapide dans le monde se trouvent sur le continent. Avec des ressources naturelles abondantes, une main-d’œuvre jeune et de plus en plus éduquée, une stabilité politique relative et des perspectives indéniables de croissance économique, il n’y a aucun doute sur la vitalité pour les investisseurs.
De bout en bout, l’Afrique fait partie des rares marchés émergents à l’échelle mondiale ; l’expression, inventée par des économistes au début des années 1980, définit l’investissement dans les pays en développement. Comme toute décision d’investissement, il y a des risques inhérents, mais voici cinq raisons pour lesquelles notre direction croit que l’Afrique mérite une chance :
Actuellement, l’Afrique représente environ 17% de la population mondiale, mais seulement 3% du PIB mondial. Ces données attestent non seulement d’un échec historique à exploiter le potentiel de développement du continent, mais mettent également en évidence les formidables opportunités à venir. Si l’Afrique continue de maintenir et d’accélérer ses réformes structurelles, beaucoup croient que le continent peut imiter la montée rapide de la Chine au cours des 50 dernières années.
Les révolutions industrielles, qu’elles soient entraînées par la vapeur, les chaînes de montage ou les ordinateurs, ont historiquement été lentes à balayer le continent africain. Cependant, l’ère de l’Industrie 4.0, de l’énergie propre, de l’intelligence artificielle et de l’innovation numérique promet d’être différente. Contrairement aux précédentes vagues de changement industriel, avoir une part dans l’ère numérique ne nécessite pas une expertise étendue ou des investissements massifs en capital. Au lieu de cela, les innovateurs et les entrepreneurs des marchés émergents sont en position de puiser dans les flux de talents et de connaissances numériques et de les convertir en biens, services et modèles commerciaux.
Au cours de la dernière décennie, les actions africaines n’ont pas été une success story – du moins pas par rapport à des régions similaires. Les indices MSCI US et MSCI Developed World ont augmenté respectivement de 232% et 159% au cours des dix dernières années, tandis que le MSCI South Africa et le MSCI EFM Africa ex. South Africa n’ont gagné que 33% et 23%. Cela dit, certains se demandent si les actions africaines ont été à la traîne à cause de problèmes sur le continent. La réponse courte : pas vraiment. Cependant, cela présente une opportunité unique pour les investisseurs – une plus grande part de capital dans les entreprises dans lesquelles vous choisissez d’investir.
La diversification est la pratique qui consiste à répartir les investissements afin de réduire l’exposition aux risques associés à un seul type d’actif. Cette pratique vise à réduire la volatilité de votre portefeuille d’investissement au fil du temps. Si vous attendiez patiemment une opportunité d’investir dans des actions internationales, l’Afrique se présente comme une option digne.
Selon le Forum économique mondial, d’ici 2030, plus de 40% des Africains appartiendront aux classes moyennes ou supérieures ; en conséquence, il y aura une demande accrue de biens et de services. Sans parler du fait que la consommation des ménages devrait atteindre 2,5 billions de dollars (oui, billions), plus du double de celle de 2015 qui était de 1,1 billion de dollars. Une augmentation du capital ne peut signifier que plus d’opportunités de croissance économique et de développement à travers le continent, ce qui amène de plus en plus d’investisseurs à se tourner vers l’Afrique.
C’est là qu’intervient daba. Notre plateforme simplifiée fournit ce que nous appelons des « investisseurs de tous les jours » avec des analyses d’investissement et des ressources pour la création de richesse, afin de rendre leurs décisions d’investissement dans les marchés de capitaux privés et publics africains durables.
Pour en savoir plus sur daba et comment rejoindre notre communauté mondiale croissante d’investisseurs, visitez dabafinance.com ou connectez-vous avec nous sur LinkedIn !