There’s a burgeoning interest in advancing digital payments and neobanks within Francophone West Africa. This sector has seen a significant increase in investments at the onset of the current year, showcasing stronger performance indicators than other markets in the region.
Despite the 31% plummet in venture capital down to $4.5 billion last year, as noted by the African Private Capital Association, these figures were attributed to economic adversities including soaring inflation and currency depreciation affecting several African countries.
Investment expert Novitske remains positive regarding the resurgence of investment levels, predicting enhanced due diligence and active operational engagement from investors. This approach is directed at cultivating more robust and enduring investment strategies, in contrast to the swift investment surge induced by the pandemic during 2021 and 2022.
The investment fund Norrsken22 has already placed capital into six enterprises, one of which is Tyme Group located in South Africa. With an eye on broadening their portfolio to encompass 20 companies by 2025, the fund was established in 2022 through a partnership between Hans Otterling of Northzone Ventures and Niklas Adalberth of the Norrsken Foundation. Its focus lies on supporting businesses that provide “lean-tech solutions”, such as software and artificial intelligence, with financial support coming from founders of unicorn companies.
The scope of investments stretches across nations like South Africa, Nigeria, Kenya, and Egypt, honing in on emerging sectors such as digital payments and neobanks, with a special focus on Francophone West Africa in anticipation of regulatory reforms that could accelerate digital transformation.
