When it comes to investing in African tech, sustainability matters
Aug 09 2021
Ingressive Capital is soon launching our second Africa-focused investment fund at a much larger size, and for those of us who are not going anywhere and have built lives, teams, and careers in this ecosystem, sustainability matters.
Although some foreign investors are happy to sign term sheets regardless of valuations, as prices are still better than their home market and African tech is unquestionably booming; those of us here for the long term need to ensure signed valuations match the pace of growth as well as immediate TAM (total addressable market). This is to ensure not only upticks (and no down rounds) in future rounds but increasing amounts of foreign direct investment over the years (IJNA🙃).
I started my investment work in Nigeria in 2014–when there was a negligible amount of venture FDI, and I remain conscious of how to steer in a different direction. Regarding the recent article—lol—my point was clearly missed.
The popular sentiment holds that the market is and should be the only valuation indicator. However, global economic volatility and some high-profile recent down-rounds have caused us to start taking additional variables into account, notable mention of WeWork (from $47billion to $2.9billion), Monzo’s 40% hit, and Airbnb’s $5BN valuation shave.