TLDR:
- African startups raised the lowest funding in three years in 2023.
- Investors at Techstars Demo Day emphasized the need for startups to build real businesses with strong unit economics.
In a panel discussion at the ARM Labs Lagos Techstars Demo Day, investors emphasized the importance of building real businesses with strong unit economics in light of the current venture funding downturn in Africa. Olumide Soyombo, a Founding Partner of Voltron Capital, highlighted the opportunity for founders to reset their building mindset and focus on creating sustainable businesses. Ovo Emorhokpor, Founding Partner of Beta Ventures, stressed the importance of providing real value to customers and building businesses on customer satisfaction.
The panel also discussed the challenges faced by African startups that raised funds in dollars, particularly in terms of reporting revenue amidst inflation and currency devaluation. Biola Alabi, General Partner of Acasia, suggested that export-oriented businesses consider raising funds in local currencies to facilitate easier returns on investments. The discussion also touched on the importance of collaboration between local and foreign investors to better understand the investment landscape.
Looking ahead, the panel advocated for a futuristic mindset in investing, with a focus on building businesses that can thrive in the long term. Despite the cautious outlook, there was optimism about the future of Nigeria’s tech ecosystem, with confidence in the talent and innovation driving the sector towards global solutions.
