ABAN – African Angel Investment Survey 2024
For the third consecutive year, the African Business Angel Network (ABAN) is developing its annual African Angel Investment Survey, with sponsorship from the Dutch Good Growth Fund (DGGF) and the support of Briter Bridges and the African Angel Academy (AAA). The ABAN African Angel Investment Survey 2024 aims to dive deep into key trends emerging in Africa’s angel investing landscape, offering a detailed account of the progress made and the direction it is heading.
The State of Angel Investing in Africa
Angel investing in Africa has shown remarkable growth and resilience. The report reveals that angel investors are stepping in to bridge the funding gap for early-stage companies, providing essential capital to help these businesses achieve key milestones and attract larger investments. Despite the funding decline within Africa's startup ecosystem, angel investors remain committed to supporting innovative companies with the potential to generate significant economic growth and social impact.
Profile of Africa’s Angel Investors
Angel investing in Africa is accessible to people in different age groups. Close to two-thirds (62%) of surveyed angels are between 36 and 53 years old, with an average age of 43. Additionally, 21% are youths between 18 and 35 years old. Despite being male dominated (62%), female angels participate actively in the ecosystem, particularly in the 40-49 age group (50%) and founder demographic (22%). Angel investment activity is concentrated in Africa’s top investment destinations, with South Africa (15%) leading, followed by Nigeria (10%) and Kenya (8%). Regionally, West Africa (28%) has the largest share of angels, followed by Southern and East Africa at 25% each.
The majority of angels are highly educated, with 69% holding advanced degrees, and 62% having received their education outside Africa. Business (37%) and accounting and finance (16%) are the most common degrees among angels. Professionally, most angels have experience as operators managing a small or large business. Survey results showed that the largest proportion of angels are founders or entrepreneurs (33%), followed by C-level executives (25%), and investment professionals (21%).
Key Findings from the 2024 Survey
The survey reveals several key trends and insights into the state of angel investing in Africa. Angels are optimistic about the African innovation ecosystem, with 72% indicating they had invested in the past year. They favor disruptive, scalable, and proven business models, with a preference for companies that generate revenue from both companies and consumers. Agriculture and agtech have emerged as the most popular sectors, surpassing fintech.
Angels provide more than financial assistance to startups. They offer business advisory, mentoring, access to networks, and governance support. Many angels also provide follow-on funding based on strong performance and growth metrics. Economic growth through job creation, poverty reduction, and financial inclusion is a top priority for many angels. Social impact, such as empowering youths and women, and environmental sustainability are also significant motivator.
Challenges and Opportunities
The report highlights several challenges faced by early-stage companies in Africa, including the limited availability and diversity of capital. However, angel investors are playing a crucial role in addressing these challenges by providing essential capital and support to help these companies scale effectively.
The ABAN Angel Investment Survey 2024 underscores the importance of collaboration among ecosystem players to unlock the full potential of angel investing. Established and emerging players must work together to drive meaningful contributions to Africa's economic, social, and environmental development.