Singapore tech investment network expands to Africa

XA Network, a Singapore-based investor platform comprising technology company leaders in Southeast Asia has expanded into Africa with the launch of XA Africa. The initiative aims to connect African tech founders with experienced investors and industry experts. Beyond capital, XA Africa offers strategic guidance and support to help startups scale, a timely move as Africa’s venture capital (VC) industry grapples with a downturn in deal activity due to macroeconomic and regional challenges.

XA Network, founded six years ago by former regional Google employees has evolved to include senior leaders from other major technology firms. Since its inception, the network has backed nearly 100 startups across Southeast Asia, supporting ventures like mental health platform Intellect, digital staffing service Staffinc, and e-scooter firm Neuron Mobility.

XA Africa has already invested in four African startups, including Crop2Cash, a Nigerian platform that provides financing for smallholder farmers, and BuuPass, a Kenyan service offering online ticketing for buses, trains, and flights. Other investments include Kaya AI, a South African company leveraging artificial intelligence to automate workflows and address productivity challenges within the construction industry’s supply chain, and Talamus Health, a Ghanaian platform for health service providers and their clients.

The timing of XA Africa’s entry coincides with a downturn in Africa’s VC ecosystem. By the end of the third quarter of 2024, total VC deal value for the year stood at US$1.2bn, a significant drop from US$3.6bn in 2023 and US$5.2bn in 2022. The decline mirrors global trends, where rising interest rates have shifted investor preferences towards safer assets. 

Local currency depreciation has been a bug bear for investors seeking dollar-based returns in Africa. Falling startup valuations have further diminished the market's appeal. The collapse of some high-profile ventures has added to an already challenging environment. At the same time, global investors – particularly those from North America with opportunistic rather than dedicated mandates for Africa – have scaled back activity in the region. Additionally, capital has increasingly been concentrated in already-backed startups led by established founders, leaving fewer deals for new ventures. 

Fintech continues to dominate Africa’s VC landscape. In 2024, one in three funded tech-enabled startups (32%) operated within the fintech vertical, collectively securing US$564m in funding. Innovations range from digital payments and mobile wallets to cryptocurrency and embedded finance solutions tailored to local needs. AI-related deals represented 13% of funding directed towards startups in 2024, making it one of the most funded verticals alongside cleantech. This shift in capital allocation reflects a growing investor focus on sectors that blend sustainability, scalability, and technological innovation.

 

References

'VC in Africa: From growth to profits in a changing investment landscape', How we made it in Africa, 04 January 2023

'African Private Capital Activity Report', African Private Equity and Venture Capital Association, March 2024

'XA Network expands to Africa with launch of XA Africa, backed by tech veterans', XA Africa, 11 October 2024

'Venture capital activity in Africa Q3 2024', African Private Equity and Venture Capital Association, October 2024

'The investment network fostering inclusive innovation in Southeast Asia and Africa', XA Network, Accessed 23 December 2024