African startups need financial backing for global ambitions, says VCs

African startups can build solutions that are scalable across the global market, investors who spoke at Moonshot by TechCabal on Thursday said. They need support in terms of funding, access to networks and market knowledge to achieve global ambitions.

In Africa, the idea of expansion is mostly centred around launching in one of the “Big 4” markets and scaling from there. In recent years, African startups like TymeBank, Flutterwave, and Moove have set up shop in markets like Southeast Asia and North Africa. 

Penetrating foreign markets requires startups to have a clear idea of what it takes to succeed in different countries. This clear picture of the market comes from having investors who can back the founders’ ambitions. 

“It seems obvious but what works in African markets might need significant tweaking to work in markets like LatAm and Southeast Asia,” said Sadaharu Saiki, founder & GP at Sunny Side Ventures.

Startups like TymeBank, which launched in South Africa and is now present in the Philippines, Vietnam, and Indonesia, often cite the similar macroeconomic conditions in Africa and Southeast Asia But it takes more than just similar market dynamics to build a successful product. This is where partnerships with local players come in handy.

“There will always be someone who knows the market more than you. Leverage that knowledge through well though partnerships,” added Aaron Fu, director of venture investments at DCG.

As the African market becomes highly competitive and somehow saturated, foreign markets are becoming increasingly attractive. To reach their potential of penetrating these markets,  it will take a combination of “patient capital,” deep knowledge of the markets and partnerships with significant synergies.