Africa’s rapidly urbanizing, young, and mostly online and mobile-first population is bolstering demand for tech and tech enabled goods and services. As a result, the continent has witnessed the exponential growth of start-ups that are ready to tackle complex local problems that address the growing need and demand from this new wave of consumers as well as help reduce or eliminate existing inefficiencies and gaps that have held back African countries from reaching their full potential. This tech ecosystem growth has been supported by venture capital funding which reached an all-time high in 2021 – estimated between USD 4.5-6.0bn – from local venture capital investors and increasingly from global capital allocators.
In fact, venture capital investment in innovative and technology driven companies across Africa will be enhanced by over USD 11.3 million (c. EUR 10m) in junior capital from Boost Africa and USD 12.5m (c. EUR 11m) in senior capital European Investment Bank backing for start-up fund Atlantica, the latest African investment partner to benefit from the Boost Africa initiative.
“The European Investment Bank is committed to improving access to finance by innovative companies across Africa and around the world. The EIB’s new partnership with Atlantica Ventures will scale up specialist financing for technology and technology-enabled companies across Africa to ensure that technology can contribute to delivering inclusive and sustainable growth.” Said Thomas Östros, European Investment Bank Vice President.
Jointly developed by the EIB and the African Development Bank (AfDB) with financial support from the European Commission and the Organisation of African, Caribbean and Pacific States Secretariat (OACPS), Boost Africa aims at unleashing the entrepreneurial potential of African youth through investment by venture capital funds. The initiative specifically targets 5 main objectives:
- boost entrepreneurship and innovation,
- create new and quality jobs,
- develop an efficient entrepreneurial ecosystem in Africa,
- address financing gaps at the earliest and riskiest stages of business creation
- and develop young entrepreneurs’ skills and expertise.
The new pan-African start-up financing cooperation was confirmed in Brussels ahead of the EU-Africa Summit.
Read more on the innovation driven economic growth across Africa here.