Technology focused investors in Africa are enjoying growth in revenue

A South Africa based investor, Silvertree Internet Holdings, which has invested over $1.5 million in consumer focused technology companies this year, says it has enjoyed growth in its revenue over the past six months.

Paul Cook, one of the founders said , “We in Africa can be too quick to try to copy the surface activities of Silicon Valley, with its focus on ‘cool’ ideas and disruptive innovation, and sometimes forget that building a viable business requires finding customers and generating revenue. Smart potential investors are seeking businesses that have proven they will be able to make money – not just great ideas.”

While Silicon Valley-style entrepreneurship is expanding by the number of hubs and working spaces across Africa, there are a few success stories of start-ups. This is because these start-ups have not attained the level of growth required to impact the continent’s economy. These start-ups are complaining that the sustenance of real investment capital is extremely hard.

However, over the past six years, technology focused investors have come to Africa to invest in start-ups. The continent recorded the highest investment in 2013 with over 50 entrepreneurs gaining access to fund their businesses over a five year period.

It is reported that some of these investors, recorded revenue growth in the first six months of their investment. For example, Silvertree Internet Holdings, which invested over R20m ($1.5 million) in the first seven months of 2015, has enjoyed month-on-month revenue growth of over 10% across several portfolio of investments in 2015.

According the World Bank, Africa’s economic growth for 2015 is estimated to be 4.2 percent, which is a decrease from 4.6 percent growth in 2014.

This could mean that investors are making huge revenues even though the impact is not being felt in different African economies.

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