OUR THESIS
The greatest value creation in Africa will be in Fintech and Platform/Marketplace start-up companies
Africa is an under-invested market filled with opportunities cloaked as challenges. The application of
technology, especially information technology, provides new paths to harness wealth.
We believe smartphones and the internet present an unprecedented opportunity to aggregate
fragmented value chains in Africa, formalise large sectors of the continent’s economy and provide
underserved consumers and businesses access to financial services.
Our investment strategy is driven by 4 core factors
A Young & Increasingly Urban Population
Africa has both the youngest and the fastest-growing population of any region in the world. By 2050, 1 in 4 people and 1 in 3 youth (aged 15 to 25) will be African.
This population is also rapidly urbanising. In 1960, < 20% percent of Africa’s population lived in cities.
Today, that number is roughly 40%, with 68 cities in Africa having more than 1 million people.
By 2050, nearly 60% of the population will live in urban
centres.
Fast-Growing Digital Penetration
Africa has the fastest growth of mobile, smartphone and internet penetration in the world.
As of YE 2020, Nigeria had 155 million internet users – more than any other country in Africa.
The contribution of mobile and the internet to Africa’s economy is estimated at US$115 billion, a number that is expected to grow to US$712 billion by 2050.
Large, Fragmented Informal Sector
Large sectors of Africa’s economy are informal and highly fragmented.
At least half of commercial activity and > 80% of employment in Africa is in the informal sector.
Digital platforms have an unprecedented opportunity to aggregate and formalise these fragmented, informal sectors.
Lack of Access to Financial Services
Though rapid expansion has changed Africa’s demographic landscape, urbanisation has failed to bring about inclusive growth.
In fact, sub-Saharan Africa has the lowest rate of financial inclusion in the world, with >50% of Africans financially excluded.
This represents a market opportunity of 600 million unbanked Africans and an SME credit gap of US$330 billion annually.
© Constant Ventures
Investment Fund ICC 2022