Marlon Nichols addressed the audience at AfroTech recently, emphasizing the vital role of fostering connections for market entry. “When you’re stepping into a new market, meeting the key players is one of the first tasks,” he mentioned. “What are the demands? What’s trending?” 

As a co-founder and managing general partner at MaC Venture Capital, which has secured a Fund III totaling $150 million, Nichols has allocated over $20 million into no fewer than 10 African enterprises. His initial foray into African investments was in 2015, prior to the surge in popularity of investing in African startups. According to him, this early investment was crucial in establishing his footprint on the continent.  

Last year, African startups secured funding ranging from $2.9 billion to $4.1 billion. This was a decline compared to the $4.6 billion to $6.5 billion raised in 2022, which resisted the global venture downturn. 

Nichols observed health tech and fintech as the primary areas ripe for innovative growth in Africa, as they have evolved into major sectors on the continent due to inadequate payment systems and underfunded health infrastructure.

Presently, a significant portion of MaC Venture Capital’s investments is concentrated in Nigeria and Kenya, bolstered by the extensive network Nichols’ firm has developed. He explained that forming connections with individuals and organizations helps cultivate a circle of reliable advisors. “When an opportunity arises, I review it and can share it with knowledgeable contacts,” he said. Additionally, these networks facilitate angel investing in emerging companies, providing another avenue for market entry.

Despite the funding decline, a positive aspect is emerging: The anticipated decrease happened as financiers pulled back, but concurrently, there has been an expansion of capital beyond Kenya, South Africa, Egypt, and Nigeria — reaching Francophone Africa, which has experienced a rise in transactions, putting it on equal footing with the “Big Four.” 

Increasing numbers of early-stage investors are making their mark in Africa, though Nichols highlighted the greater necessity for firms targeting later stages, such as Series A to C, to participate in the market. “I am convinced that the next significant trade partnerships will involve African nations,” he pointed out. “Now is the time to sow the seeds.”