A detailed analysis conducted by the African Business Angel Network (ABAN) in collaboration with the Briter analytics platform has unveiled interesting trends in early-stage startup funding across the continent. The survey, which involved 110 angel investors, found that 77% of them invested less than $25,000 in African startups between 2022 and 2024.
The investment landscape in Africa is gradually evolving, with an increasing number of investors exploring the $50,001 to $250,000 range. Interestingly, half of the surveyed investors prefer to use Simple Agreements for Future Equity (SAFE) for their investments, indicating a long-term growth perspective. On the other hand, 28% of investors opt for debt instruments like convertible notes, seeking quicker returns while still maintaining potential equity participation.
One of the key driving factors behind investment decisions in Africa is social impact. The survey revealed that 59% of angel investors prioritize job creation and poverty reduction, while 19% focus on empowering youth and women entrepreneurs. Additionally, 10% of investors are showing a growing interest in climate solutions, reflecting a heightened environmental awareness in their investment strategies.
Technology-driven startups seem to be the top choice for many investors, with 42% specifically targeting tech innovations. This trend aligns with the broader venture capital landscape, as evidenced by the $1.8 billion invested in sectors such as fintech, e-commerce, and energy technology in 2024. However, 25% of investors maintain a sector-agnostic approach, diversifying their investments across various industries from agriculture to healthcare.
The cumulative angel investment in African startups has reached $35 million between 2008 and 2023, indicating a growing interest in early-stage funding opportunities. Angel networks are playing a crucial role in providing support through training programs and data access, which in turn enhances decision-making processes and expands investor reach within Africa’s startup ecosystem.
Investment patterns in Africa reflect a careful consideration of risk factors, especially in markets with limited access to venture capital. Improved education initiatives and enhanced data accessibility are helping investors navigate these challenges more effectively. The availability of various investment instruments offers flexibility for investors with different risk appetites, while also supporting the growth needs of startups.
African angel investors are showcasing strategic diversity in their approach to startup funding, going beyond financial returns to incorporate significant social impact considerations. As angel networks continue to strengthen and mature, they are paving the way for increased investment confidence and expanded funding opportunities across the continent.
