Study: VC and private equity investment in Africa sets for new record highs

• Two out of three VC and private equity executives expect $1 billion-plus rise this year and another $1.5 billion-plus by 2025
• More than half believe improved internet connectivity could dramatically increase venture capital and private equity investment in Africa

Private capital investment in Africa is set to hit new record highs this year and for the next three years as money floods into Africa-focused funds and new projects, new research for blockchain-based mobile network operator World Mobile shows (please see the attached press release).

Its study among senior executives at venture capital (VC) and private equity companies across the UK, US, the Middle East, Singapore, Hong Kong, France, and Germany shows optimism is building with improvements in internet connectivity a key factor. Failure however to improve connectivity could damage investment growth.

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.

Nearly two out of three (63%) believe private capital investments will rise to $8.5 billion or more this year while 68% forecast the total will reach $10 billion a year by 2025.   Around 66% expect Africa-focused funds to raise $4.5 billion or more this year while 53% predict the annual funds raised will exceed $6 billion a year by 2025.

Improvements in internet connectivity across the continent will be a key factor in the surge in confidence among venture capital and private equity investors – more than half (53%) believe the spread of internet access across the continent will dramatically increase investment over the next five years.

The table below shows the forecasts for private capital investment in Africa this year and by 2025.