“Africa is Gearing up for Growth”
Find out why DLD24 speaker Lexi Novitske is confident that Africa will become a global leader in tech, overcome its challenges – and where the continent’s super powers lie.
With a young population, rapidly growing tech ecosystem, untapped markets and abundant natural resources, Africa has long been seen as a continent of opportunities. After many years of neglect, investors finally seem to take notice. In 2022, startups across the continent raised $7.6 billion – a near record, according to the African Private Capital Association.
This year has seen a sharp reduction in dealflows, in line with a worldwide slump in venture capital. Yet DLD24 speaker Lexi Novitske remains optimistic. A General Partner of Norrsken22, a tech growth fund based in Lagos, Nigeria, the experienced investor sees many reasons why Africa can live up to its promises in the long run – and “improve the lives of billions” with modern infrastructure projects and world-leading technology solutions.
Is Africa still the continent of opportunities?
The future of Africa looks promising. With a median age of 25 years – compared to China’s 39 – Africa is gearing up for growth. A young demographic, born with a mobile phone in their hand, better educated, more connected with lower data costs and hungry to adopt digital services that were otherwise inaccessible to them in a traditional landscape. That will be the super power of Africa. This isn’t just an investment opportunity; it’s a chance to improve the lives of billions.
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Where do you expect Africa to lead the way?
At the current rate of growth, African countries can’t build out the traditional landscapes of schools, hospitals or banks to serve the growing population. It will take scalable technology platforms that reach across borders, to rural an urban populations alike, to achieve this goal – and they will make Africa a leader.
These tech platforms will be developed for a local population with a lower cost, simplified delivery and AI enabled for low decision-making – but such features will make them applicable for expansion to many geographies throughout the world. We see especially strong opportunities in fintech and market-enabling solutions.
Yet startups continue to struggle for capital. What’s holding them back?
The ecosystem in Africa is still quite nascent. Many of the early tech infrastructure companies that built payment systems and other fundamental digital infrastrucutre started in 2016, when we saw $367 million of investment going into African tech startups. Since then we’ve seen investment multiplying almost every year, but we are still early in this development. Tech talent is being built and international companies are starting to approach local companies for potential acquisition. Some of these incredible companies being acquired will catalyze further investment into these ecosystems of Lagos, Nairobi and Johannesburg – just as we’ve seen in ecosystems of Silicon Valley, Berlin and Stockholm.
Investment patterns: While most deals are made in North and West Africa, the volume of venture capital investments is more evenly distributed, as this chart by the African Private Capital Association shows.
Which cultural and geographical differences do you see?
Africa is made up of 54 countries and over 2,000 languages. The incredible diversity of the continent gives rise to frictions across markets, but also an inherent connection of trade. Entrepreneurs in Africa are adept at operating across borders, leveraging their understanding of local nuances to tap into consumer bases that many Western businesses may find challenging to relate to.
Some of these problem sets – often catalyzed by the fragmentation – have led to unique models to bring ecosystems together in a low-cost and user-friendly manner. Take for example the explosion of mobile money, which initially was launched to help users send money home into remote areas. We’re seeing simliar trajectories of businesses enabling cross-border transactions today both on the peer-to-peer and the business-to-business side.
What efforts would you like to see from Western nations in support Africa?
I’m a strong believer that entrepreneurship drives exponential impact by building sustainable, commercially healthy businesses. In my view, global governments should encourage investment into African countries to support entrepreneurship efforts. I would also like to see Western nations support Africa in the build-out of necessary infrastructure to catalyze private sector growth, particularly across telecom and data infrastructure, energy and transportation.