Re-thinking Africa’s Growth Potential

Africa is a diverse continent with unique challenges and opportunities. At Constant Ventures, we believe applied technology can offer innovative solutions to both address these challenges and capture these opportunities. Strategic investment in African entrepreneurs can help improve people’s lives while significantly accelerating economic growth.

OPPORTUNITIES

Where Others See Obstacles, We See Opportunities

Africa has unique demographics that advances in communication and digital technology are able to address.

OPPORTUNITY #1

A Young & Increasingly Urban Population

Social entrepreneur and activist Leila Janah often said, “Talent is equally distributed, opportunity is not.” With a median age of 19.5 years, Africa has the youngest population in the world – an abundant source of talented people who are hungry and willing to learn but have often lacked the opportunity to do so. Until recently, opportunities have been limited because of development challenges and lack of infrastructure. Today, roughly 40% of Africans live in cities where upgrades in infrastructure have made it easier for people to access information and global markets. We believe in backing the best of Africa’s talent to optimise business models capable of driving growth locally.

OPPORTUNITY #2

The World’s Largest Working-Age Labour Force

With aging populations across the world, sub-Saharan Africa is poised to drive global population growth. By 2035, the number of working-age (15-64) sub-Saharan Africans will exceed that of the rest of the world combined. In most other geographies, similar transitions have been associated with higher savings and investments, raising potential and actual growth. For the global economy, integrating sub-Saharan Africa’s labour force into global supply chains will be essential. To meet this demand, however, the continent will need to create high-productivity jobs at an average rate of ~18 million per year through 2035 – an extremely rapid and historically unprecedented rate – to absorb new entrants into the labour force.

OPPORTUNITY #3

Endless Hours of Sunlight

With an estimated 325 days of sunlight every year, solar power is both Africa’s most abundant and most underutilised resource. Though this huge gap has given rise to lucrative business opportunities to transform energy distribution across the continent, the World Bank estimates that more than 600 million Africans still have no access to power. Since 1990, Africa’s demand for electricity has outgrown its supply – today, consumption is growing at 8.4% per year with supply lagging at 6.1%. Refining Solar FinTech models has the potential to facilitate the delivery of convenient and affordable power, which we believe will be the breakthrough solution to connecting Africa’s vast off-grid communities.

OPPORTUNITY #4

Acres of Arable Land

Though 60% of the world’s uncultivated arable land is in Africa, the continent remains a net importer of food. With its rapidly growing population, agriculture growth is perhaps more important for Africa than any other continent – by 2050, there will be more than 2 billion people to feed. If Africa reached its full agricultural potential, its agricultural output could be 2-3x larger than it is today, enabling the continent to feed itself and the rest of the world by 2050. Realising this would positively impact a host of factors, from nutrition and health to mitigating climate change. We believe significant investment in innovative technologies can catalyse this transformation and deliver meaningful double-bottom-line returns.

OPPORTUNITY #5

Mobile Adoption and Connectivity

Sub-Saharan Africa has the fastest growth of mobile, smartphone and internet penetration in the world – with the combined contribution of mobile and the internet to Africa’s economy estimated at US$115 billion; a number that is expected to grow to US$712 billion by 2050. As of YE 2018, some 396 million mobile money accounts were registered across the continent, representing nearly half the total mobile money accounts globally. In 2019, sub-Saharan Africa reported 456 million unique mobile users. By 2025, that number is estimated to increase by 167 million mobile phone users, pushing the subscriber base to 600 million, which is nearly half the region’s total population. Within Africa, Nigeria has the greatest number of internet users of any single country – some 155 million as at YE 2020.

For millions of people across the continent, mobile connectivity has been nothing short of transformative – allowing Africans to address social challenges while enabling the delivery of life-enhancing services such as health, education and access to finance. Given the continent’s struggle to aggregate demographic data, mobile networks are also providing information critical for socio-economic development, from population numbers to consumer preferences, geographical densities and lifestyle patterns.

OPPORTUNITY #6

Socio-Economic Growth and a Positive Outlook for the Future

Africa is seeing a powerful rise in household income, strengthening the growth of the middle class – which, as of 2018, was estimated at 400 million people. Nigeria, the continent’s largest economy, recorded a 600% growth in the size of its middle class between 2000 and 2018. Yet, despite increased upward mobility, sub-Saharan Africa still has the lowest rate of financial inclusion in the world, with more than 50% of Africans continent-wide financially excluded. This represents a market opportunity of 600 million unbanked Africans and an SME credit gap of US$330 billion annually.

OUR FOCUS AREAS

We Focus on Sectors with Huge Growth Prospects

Africa’s demographics – coupled with un-met needs in finance, healthcare, agriculture, energy and education – represent significant opportunities for both entrepreneurs and investors. We believe the greatest value creation within these sectors will be in Fintech and Platform / Marketplace start-up companies.

Financial Services

From the underserved to the middle class, Africans are increasingly interested in access to financial services and products that technology-driven solutions offer. We are committed to investing in companies that are building products and infrastructure that extends access to credit, savings and investments, as well as digital payment options specifically aimed at underserved populations.

Healthcare

Though Africa has achieved notable improvements in healthcare, as indicated by increased life expectancy and reduced infant mortality rates across the continent, there is still a significant shortfall in the provision of services. We believe investing in businesses that provide innovative solutions to address healthcare needs – be it hospitals, pharmacies, diagnostic labs, telemedicine and more – will help people to overcome geographical and infrastructure obstacles to accessing health solutions.

Market Platform

Digital and tech-enabled marketplaces – for example, companies operating in large, fragmented value-chains that aggregate suppliers/sellers and match them with demand/buyers and provide access to financial services – will disrupt commerce and provide new and more efficient tools for consumers and businesses. As with mobile telephony, Africa is positioned to leapfrog existing technology platforms to be a leader in innovation. Our deep experience in this sector enables us to identify promising entrepreneurs, ideas and initiatives and help them grow. By offering institutional support from our in-house venture studio, as well as access to our global network, we enable companies to unlock greater opportunities and reach their full potential.

WORK WITH US

Let’s Build Africa’s Future.

Africa’s challenges offer unique opportunities. We work with entrepreneurs to realize those opportunities and create enterprises that will make a significant impact in people’s lives.

Join us today in creating a promising future for Africa.

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