Just yesterday, Userguest, the Amsterdam-based hotel management startup with Moroccan roots, announced it had secured €2.2 million ($2.4 million) in seed funding. This investment was led by notable investors, including Al Mada Ventures, CDG Invest, Saviu Ventures, UM6P Ventures, Kalys VC, and Plug & Play, many of whom are headquartered in Morocco. The investment carves out a clearer picture of the increasingly significant role that local venture capital (VC) firms are playing in the Francophone Africa funding ecosystem. 

Morocco Leads the Way, Followed by Others

At the heart of this new movement are venture capital firms located in Morocco, Senegal, and Tunisia. Within the last ten years, Francophone Africa, as a whole, has seen a surge in their number. A review of our data shows that approximately 25% of these VC firms have local headquarters across that demographic in Africa.

Morocco has the highest concentration, with entities such as Maroc Numeric Fund, Azur Innovation Fund, and Outlierz Ventures bolstering the local startup ecosystem. In Senegal, firms like Teranga Capital and Partech Africa are on ground to support local startups, while Saviu Ventures, with a dual presence in Paris and Dakar, is making significant strides in the region. Across, in Tunisia, Jasminium Capital and Anava Seed Fund are leading the charge, along with other notable investors like Capsa Capital Partners.

These investors mostly target fintech startups across the region, indicating a strong alignment with the growing demand for financial technology solutions in the region. Many local VC firms across Francophone Africa, also, mostly focus on early-stage investments, providing crucial seed and growth funding to startups, although this could mean gaps in funding, particularly for later-stage startups and those in less prominent sectors.

This local involvement offers valuable insights into regional market dynamics, which international investors might overlook. As a matter of fact, local VCs are better positioned to understand the unique challenges and opportunities within their markets, allowing them to provide tailored support and mentorship to startups. But that may not be totally convincing, especially for the more than 70% of the foreign investors who have equally invested in the region. 

Most certainly, local VC firms often have a closer connection to the entrepreneurial community and a more nuanced understanding of the regulatory environment. This proximity can enable them to offer more than just financial backing. Where they exist, they can also provide startups with strategic guidance, access to local networks, and support navigating bureaucratic hurdles. This holistic approach not only helps startups grow but equally enhances their chances of long-term success.

Across Francophone Africa, the collaboration between local VC firms and international investors is also noteworthy. Many local firms work alongside global venture capitalists to pool resources and expertise. For instance, Investisseurs & Partenaires, with operations in Burkina Faso, Côte d’Ivoire, Senegal, Madagascar and Cameroon, complements its efforts with international partners to scale its impact.

Despite the positive trends, local VC firms in Francophone Africa face challenges. The startup ecosystem in the region is still evolving — far behind its English-speaking neighbours — and investors must navigate issues such as limited access to early-stage funding and infrastructural constraints. Nevertheless, the increasing presence of local VCs signals a growing confidence in the region’s potential. Their investments are not just financial commitments but indicators of a deeper belief in the viability and future of startups in the region. 

The Bottom Line

The continued growth of local VC firms in Francophone Africa is likely to sustain and amplify the region’s startup activity. As these investors deepen their engagement and expand their portfolios, they will play a crucial role in shaping the future of the tech industry across the continent. Their presence is a testament to the region’s budding entrepreneurial spirit and its increasing importance on the global investment map.

By leveraging local insights and fostering closer connections with startups, these investors are not only fueling current growth but also laying the groundwork for a more robust and resilient entrepreneurial ecosystem in the years to come.

Udoh Charles

Charles has carved a niche at the forefront of Africa’s booming tech scene. With years of experience, Udoh has become a go-to expert for multi-million dollar deals in venture capital, private equity, and intellectual property across a vast landscape — from Delaware and New York to Singapore and South Africa. But his expertise extends beyond just the legalese. Udoh is also a corporate governance, data privacy, and tax whiz. An award-winning writer and researcher, he’s passionate about chronicling Africa’s startup story, cementing his position as a true pioneer in the field.