Silicon Valley sponsoring African Startups ? Think Again!

Silicon Valley
Silicon Valley

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.

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Silicon Savannah_Africa_1American 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.

Silicon Savannah
Silicon Savannah

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. …

11 thoughts on “Silicon Valley sponsoring African Startups ? Think Again!

  1. Thanks for pointing out this hypocrisy. I’ve heard about white-owned startups in Africa or at least doing business there, but I didn’t know it was that widespread. That’s such a bummer since there are African-owned startups happening in the continent. I remember reading an article from National Geographic of all things (surprisingly enough) that showed some tech people as well as entrepreneurs in Rwanda, Kenya, and Uganda. There’s even a term for the fast-growing tech sector in East Africa called Silicon Savanna. I wish these African-owned startups would get more attention and business.

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      1. Of course! It’s also why I’m glad when you promote these businesses on your blog from time to time like cell phone makers, automobile creators, medical engineers, etc.

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  2. Andreas Schlüter

    Well, Monsanto tries to improve African Agricutlure, US AFRICOM tries to make Africa safe, the Gates Foundation tries to make Africa more healthy and Silicon Valley tries to improve Africa´s economy, one joke follows another!
    Hoax after hoax! The true concept for the Southern Hemisphere is designed by the numerically tiny US Power Elite that is looking at the World like an industrial farmer is looking at his estate, cattle, crops, weed (to be sorted out)!
    See: „One Thing Must be Clear to the World: The US Power Elite Regards the Whole Globe as Their Colony!“: https://wipokuli.wordpress.com/2016/10/26/one-thing-must-be-clear-to-the-world-the-us-power-elite-regards-the-whole-globe-as-their-colony/
    And for their real concept: „An Existential Question and two very Different Answers“: https://wipokuli.wordpress.com/2020/04/22/an-existential-question-and-two-very-different-answers-eine-existentielle-frage-und-zwei-sehr-verschiedene-antworten/
    Stay safe!
    Cordial regards

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  3. Totally ignorant on this. Interesting post. Keep it up Dr. Y!

    I’m in the middle of building a startup. Read more about my adventures at startupwithmorgan.wordpress.com.

    Thanks!

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