Venture capital (VC) and private equity executives are targeting the financial services sector as they increase investment in Africa, new research* for blockchain-based mobile network operator World Mobile shows.
More than half (55%) of senior VC and private equity executives questioned across the UK, US, the Middle East, Singapore, Hong Kong, France, and Germany identify financial services as the most attractive sector for investment in the continent.
The next most attractive sectors identified by the study were healthcare, which 47% highlighted, while 41% said tourism and 40% said telecoms.
Financial services is also seen as likely to deliver the strongest growth for investors over the next five years, with 56% expecting the sector to deliver strong returns, followed by manufacturing, which 48% said will grow strongly, and telecoms, which was selected by 42%.
Last year saw a record** 429 private capital investments in Africa worth a total $7.4 billion, while Africa-focused funds across the array of private capital attracted $4.4 billion***, which was also a new high and 63% above the average of $2.5 billion for the past five years on the continent.
Improvements in internet connectivity across the continent are a key factor in the surge in confidence among venture capital and private equity investors – more than half (53%) are confident the spread of internet access across the continent will dramatically increase investment over the next five years. But failure to improve connectivity could be a drag on investment.
World Mobile is one of the major innovators revolutionising internet connectivity in Africa and is already working with the government in Zanzibar. Its innovative solution includes launching a unique hybrid mobile network delivering connectivity supported by aerostats backed up with a range of technologies including mesh networking, hybrid spectrum, renewable energy, and blockchain.
It plans to expand the network throughout the continent and is in discussions with government officials in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators.
The table below shows which sectors VC and private equity investors believe will deliver the strongest growth and which are the most attractive for investment.
| SECTOR | NUMBER OF VC AND PRIVATE EQUITY EXECUTIVES WHO SAY IT WILL BE THE STRONGEST-GROWING SECTOR | NUMBER SAYING IT IS THE MOST ATTRACTIVE SECTOR FOR VENTURE CAPITAL AND PRIVATE EQUITY INVESTMENT |
| Financial services | 56% | 55% |
| Manufacturing | 48% | 33% |
| Telecoms | 42% | 40% |
| Healthcare | 42% | 47% |
| Retail | 40% | 35% |
| Tourism | 38% | 41% |
| Education | 22% | 26% |
| Transport | 12% | 23% |
Micky Watkins, CEO of World Mobile said: “The financial sector is driving the expansion of Africa’s fastest-growing companies with financial services groups and fintechs firmly established among the top companies on the continent.
“Venture capital and private equity companies clearly expect more growth and more start-ups in the sector and are increasingly investing across the continent as companies help provide banking services to the unbanked.
“One of the key developments driving that growth is providing faster, more reliable, and affordable internet connectivity, particularly for areas where connectivity remains an issue.
World Mobile’s network based on the sharing economy sells affordable network nodes to local business owners, so they have the power to connect themselves and others while sharing the rewards. This will enable more people to access the opportunities that internet connectivity creates.”
World Mobile’s balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way to provide a digital connection to people and is the first step in its mission to help bring nearly 3 billion people online before 2030 in line with the UN and World Bank’s SDGs.
World Mobile’s hybrid network takes a more sustainable approach than that of legacy mobile operators, offering innovative solutions to environmental, social and governance concerns.
By using solar-powered nodes, second-life batteries and energy-efficient technology, the network mitigates its environmental impact. World Mobile also facilitates positive and sustainable societal growth through the application of its “sharing economy”, where locals share in the ownership and rewards of the network.
