Understanding Africa’s Venture Capital landscape

Africa's venture capital landscape is experiencing a transformation as more opportunities emerge for startups on the continent. Thabo Ncalo, Founding Partner of 8th Season Capital, sat down with CNBC Africa to discuss the challenges and opportunities in the African VC space. Ncalo highlighted the lack of capital historically available to African SMEs and startups, attributing it to the slow growth of the sector. However, in recent years, venture capital has emerged as a key player in providing much-needed funding to tech startups and SMEs, aiming to boost economic growth and create better opportunities for entrepreneurs. Ncalo emphasized the importance of stakeholders like limited partners, pension funds, financial institutions, and retail investors in channeling capital towards promising businesses. He stressed the need for startups to demonstrate viability and maturity to attract venture capital funding, emphasizing the role of angel investors in early-stage financing. One of the key challenges faced by African businesses is the limited access to a broader market due to economic and trade barriers. Ncalo urged for the removal of such barriers to facilitate cross-border trade and business growth within the continent. While political lobbying plays a crucial role in dismantling these barriers, technology has played a significant role in leapfrogging traditional hurdles. Companies like WorldRemit have enabled seamless money transfers across borders, showcasing the potential of technology in enhancing business operations in Africa. Ncalo also shed light on 8th Season Capital's unique approach to venture capital investment, opting for a fund of funds model to support diverse venture funds investing in startups at various stages. By backing these funds, 8th Season Capital aims to foster a robust ecosystem for startup growth and innovation. The focus remains on achieving high returns and supporting promising companies that demonstrate sustainable growth potential. As Africa's venture capital landscape continues to evolve, stakeholders like Ncalo are optimistic about the future and the potential for transformative growth in the sector.