Endeavor Catalyst Set to Amplify Investments in Africa's Booming Startup Scene

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US investor Endeavor Catalyst is gearing up to significantly increase its investments in Africa over the next five years, potentially doubling the share of African startups in its portfolio. Since 2017, the New York-based venture capital firm has made 40 investments in the region, including notable companies such as Tymebank in South Africa and Flutterwave and Moniepoint in Nigeria, all of which have reached unicorn status.

Currently, 8% of Endeavor Catalyst's global investments are in Africa, but executives anticipate that this figure will rise with the continent's growing digital adoption and tech talent. Allen Taylor, a founding partner of Endeavor Catalyst, stated, "We are going to be doing a lot more investing here because this is where growth is coming from."

In 2021, the firm achieved its first exit in Africa by investing in InstaDeep, a Tunisian AI startup acquired by BioNTech for $682 million. Last year, they also invested in Zededa, a Moroccan-founded AI company, highlighting their belief in the ubiquity of AI in future tech landscapes.

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Endeavor Catalyst is part of a network of Silicon Valley investors that have significantly contributed to the rise of Africa's startup ecosystem, often providing funding that local venture capitalists cannot match. The firm invests up to $2 million in companies led by founders from its Endeavor network, an exclusive global startup founders club. Later this year, they plan to raise a new fund of up to $350 million.

Despite a recent slowdown in US investment in African startups, the largest funding round this year was the $53 million raised by LemFi, a remittance startup from Nigeria, which included investors from the US, including Endeavor Catalyst. According to Michele Wanjiku, who leads the firm's Africa operations, 25% of their African investments are in fintech, with another 25% in consumer tech. Looking ahead, they expect to invest more in software-as-a-service businesses as the ecosystem develops.

Step Back

This optimistic outlook comes as African startups seek favorable economic conditions following challenging years that have seen the collapse of promising ventures. In Nigeria, improved GDP growth and reduced inflation have been welcomed by entrepreneurs as signs of recovery.

Ireayo Oladunjoye, Endeavor’s managing director for Nigeria, noted, "Many are now coming out of the valley and they can see stability in our economy."

Notable

Antler, a Singapore-based startup venture firm, will begin investing in Nigerian startups this year, marking its second presence in Africa after Kenya. It was one of the top five active venture capitalists last year, according to Pitchbook.