Access to capital has long been regarded as one of the most significant challenges facing entrepreneurs across Africa. The challenge is even more acute for tech startups, which are typically light on physical assets and cannot easily access capital from traditional sources like government grants and bank loans.
However, tech businesses are also high-growth and can deliver significant upside when they succeed. As a result, early investors in tech startups can sometimes get mouth-watering returns on investment.
The combination of poor funding for African tech businesses and the risk appetite of venture capitalists have made the African tech ecosystem a near-perfect marriage for both. Venture capitalists, after all, pride themselves on backing early-stage businesses with high-growth potential despite the associated risks.
