NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Since the beginning of 2022, tech/venture investing has been thrown into turmoil. Following the decision by most central banks in leading startup ecosystems to increase their interest rates, there has been a reduction in the supply of cash, which in part fuelled funding in many startup ecosystems leading to astronomical valuations and deal terms which were largely founder-led.

These interest rate increases have resulted in reduced funding to the tech ecosystem and a significant correction in the valuation of technology startups. Global VC reported a 27% slowdown in funding for the first half of 2022 compared to 2021, with valuations of listed tech firms also decreasing. The NASDAQ was down 28% for the first half, with some startups worse off than others. Paypal was down 63% at the end of June, with other major stocks following the same trend. Apple was down 23%, Alphabet (Google) 25%, Amazon 36% and so forth.

Most investors expect that things will be bad for cash-hungry startups, especially if they cannot demonstrate good traction. Y Combinator has advised its startups to prepare for the ‘worst’ while Sequoia is guiding its startups on how to “avoid the death spiral.”

The continent seems to have weathered the storm so far, with startups having the strongest Q2 ever. Startups in Africa raised $3.1bn in the first half of the year, representing a 139% growth compared to the first half of 2021.

In this Angel Connect, we will delve into what an African angel investor should make from this data. Will the global fundraising challenges and changes in valuations trickle into the continent? If so, how should early-stage investors prepare themselves and respond? How should an angel manage their existing portfolio and think about new investment opportunities taking all this into account?

Book your seat now to join this conversation.