Market Insights Financial Capital Raising Traditional Capital Raising

Venture Capital - Southern Africa

Southern Africa

The total Capital Raised in the Venture Capital market market in Southern Africa is projected to reach US$830.7m in 2024.
Later Stage dominates the market with a projected market volume of US$667.3m in 2024.
In global comparison, most Capital Raised will be generated the United States (US$264,500.0m in 2024).
Southern Africa's Venture Capital market is burgeoning, with a focus on tech startups driving innovation and attracting increasing investor interest.

Key regions: Europe, United States, United Kingdom, Australia, Brazil

Market

Region

Region comparison

Currency

Analyst Opinion

The Venture Capital market in Southern Africa has been experiencing steady growth in recent years, driven by a combination of customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Entrepreneurs in Southern Africa are increasingly seeking venture capital funding as a means to finance their innovative business ideas. This is primarily due to the limited access to traditional forms of financing, such as bank loans, which are often difficult to obtain for early-stage ventures. Venture capital provides entrepreneurs with the necessary capital and expertise to grow their businesses, making it an attractive option for many.

Trends in the market: One of the key trends in the Venture Capital market in Southern Africa is the emergence of sector-specific funds. Investors are increasingly focusing on specific industries, such as technology, renewable energy, and healthcare, where they see significant growth potential. This specialization allows investors to leverage their expertise and networks to provide targeted support to portfolio companies, increasing the likelihood of success. Another trend is the growing interest from international investors in the Southern African market. The region's favorable investment climate, coupled with its untapped potential, has attracted the attention of venture capital firms from around the world. These international investors bring not only capital but also valuable knowledge and networks, which can further stimulate the growth of the local venture capital ecosystem.

Local special circumstances: Southern Africa has a young and dynamic population, which provides a strong foundation for entrepreneurship and innovation. The region is home to a growing number of tech hubs and incubators, which provide support and resources to early-stage ventures. Additionally, governments in the region have recognized the importance of entrepreneurship in driving economic growth and have implemented policies and initiatives to foster a favorable business environment.

Underlying macroeconomic factors: The Venture Capital market in Southern Africa is also influenced by macroeconomic factors such as GDP growth, political stability, and regulatory environment. Positive economic growth in the region creates a conducive environment for venture capital investment, as it indicates potential market opportunities and consumer demand. Political stability and a favorable regulatory environment are also crucial in attracting both local and international investors, as they provide certainty and confidence in the business environment. In conclusion, the Venture Capital market in Southern Africa is developing at a steady pace, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The region's entrepreneurs are increasingly turning to venture capital as a means to finance their innovative business ideas, while investors are capitalizing on sector-specific opportunities and the region's untapped potential. With continued support from governments and the influx of international investors, the Venture Capital market in Southern Africa is expected to further expand in the coming years.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.