For the past few years, we have been told about Silicon Valley sponsoring African startups and promoting technology in Africa. Like many, we were happy. However, a recent article by the Guardian sheds lights on the fact that even though Silicon Valley is sponsoring African Startups, it is sponsoring African startups owned by non-Africans!!! Interesting right? That means Silicon Valley is not actually sponsoring “African”-owned startups but non-African owned startups… so much for that! For the full article, go to The Guardian.
American venture capital and private equity is dominating Africa, but it’s mostly funding other white foreign founders as black entrepreneurs struggle to raise financing.
… North America-headquartered investors accounted for 42% of all African venture capital deals in the last five years, according to the African Private Equity and Venture Capital Association. Only 20% of venture cash came from Africa-based investors, forcing the continent’s entrepreneurs to seek support from westerners.
Of the top 10 African-based startups that received the highest amount of venture capital in Africa last year, eight were led by foreigners, the Guardian’s analysis of public data revealed.
In Kenya, for instance, only 6% of startups that received more than $1m in 2019 were led by locals, a Viktoria Ventures analysis found. In Nigeria, 55% of the big money deals went to local founders and 56% for South Africa.
Global heavyweights such as Goldman Sachs, Stanford University, Chan Zuckerberg Initiative, Andreessen Horowitz and Sequoia Capital have all invested in startups started by white founders in Africa more frequently than they have invested in firms led by black Africans.
… A white founder is 47,000% more likely to be funded in Kenya than in the US, the Seattle-based author and entrepreneur Roble Musse calculated based on 2018 disclosures. White people make up less than 1% of the population. He discovered that 65% of expatriate founders – mainly from the US, the UK, Italy, Denmark and Germany – had not even lived in Kenya before they started their companies. …