It is not a debate but a fact that non-African founders running tech startups on the continent are more likely to secure funding, according to a prominent investor.
Ido Sum, partner at Africa-focused investment firm TLcom Capital, made the remarks while speaking to Rebecca Enonchong at the recent African Angel Investor Summit in Cape Town.
The fireside chat was based around the recent funding round raised by pan-African coding school Andela, in which TLcom participated and which made the startup one of the best-funded African tech ventures ever.
Asked by Enonchong whether foreign-led startups based in Africa were more likely to secure investment than those led by African founders, Sum said: “It is not a debate, it is a fact.”
He went on to explain why there was a difference between such founders.
“The distinction on the fundraising side is that someone like (Andela founder) Jeremy Johnson is not the typical first time African founder. Their networks are different, their ability to connect is different, and therefore their rounds are different,” he said.
“To think this could be anyone’s journey is wrong.”
Sum went on to say that the attraction to Johnson and Andela for investors was not down to nationality.
“It is not because he’s American, it is because he is a very good entrepreneur. He is a second time returning entrepreneur. It is not where he was born, it is his ability to scale the company,” he said.
“For African startups selling to local markets there are less opportunities and less money right now, but I think good ideas will get funded.”
For Sum, the Andela round and the prospect of the company’s success could help the whole African tech scene.
“If this grows to the size it could grow to it will help everyone in the ecosystem,” he said.
He did have some advice for first time African founders when it came to building their business and securing investment.
“Build a very strong team, the strongest possible. Bring in people with experience. When you want to sell to enterprises you need people with specific abilities. When you want to disrupt a sector you need people with deep knowledge of that sector. Find those people,” said Sum.
“People need to build startups that will get to self-sustainability faster than usual. You need very high ambitions.”
