For the seventh consecutive year, the Big Four (Egypt, Kenya, Nigeria, and South Africa) pulled in over 80% of all venture capital deployed across Africa in 2025, a share that has barely moved since 2019.
But last year, South Africa alone took 19% of the total, and 29% of all African equity funding, making it the largest equity market on the continent. Beyond Johannesburg and Cape Town, the rest of Southern Africa, like Gaborone, Lusaka, Windhoek, Maputo, Luanda and Harare, captured almost nothing.
For exits, the gap is even wider, as nearly half of the 138 venture-backed exits tracked by the African Private Capital Association across Africa between 2019 and 2024 were in South Africa. The country’s deep and more liquid capital markets, established secondary structures, and concentration of strategic acquirers have made it the default exit jurisdiction for the continent.
As a result, founders building elsewhere in Southern Africa often look to South Africa when seeking capital or planning an exit. Botswana Tech Fund, a new fund anchored out of Guernsey, a self-governing British Crown dependency in the English Channel, is trying to change that.
Backed by Stephen Lansdown, the British billionaire who co-founded Hargreaves Lansdown, the FTSE 100 financial services firm, and who has invested in Botswana since 2007 through his Tuli Conservation Trust, the fund has £10 million ($13.5 million) in committed capital, with a first close of £5 million ($6.7 million). It is operationally based in Botswana and run in partnership with Launch Africa, the pan-African seed-stage VC firm with over 130 portfolio startups.
Martin Davis, the fund’s co-founder, is a UK technology investor and entrepreneur who also chairs Bethnal Green Ventures, a London-based social impact accelerator that has run programmes for 15 years. His co-lead, Florence Bavanandan, is head of platform and operations at Launch Africa, where she helped build the fund’s portfolio support infrastructure.
Together, they have designed a multi-stage strategy with three legs: a pre-seed accelerator that will deploy £100,000 ($135,000) cheques to roughly 100 Southern African-based companies over five years; primary growth-stage investments of £500,000 ($670,000) to £2 million ($2.7 million); and secondaries that buy out early-stage VCs from already-developed companies in the bigger African markets.
The geographic focus is what makes the fund unusual. Most African VCs follow the well-known capital concentration map in Lagos, Nairobi, Cairo, and Cape Town. Botswana Tech Fund is built around what Davis and Bavanandan call the “digital gap”: the Southern African markets that get less than a fifth of the continent’s funding despite collectively housing tens of millions of consumers and a younger, increasingly digital population.
Their bet is that closing the gap requires capital deployed at the source, not routed through Johannesburg or filtered through Big Four ecosystems where most of the deal flow already lives.
In this week’s Ask an Investor, Davis and Bavanandan explain why the fund is anchored in Botswana rather than Lagos or Nairobi, what they look for in founders at the pre-seed stage, why they expect haircuts on every secondary they touch, and why they believe the next decade of African private equity will be dominated by international PE money looking for roll-ups.
This interview has been edited lightly for clarity and length.
What’s the fund’s thesis, and what type of founder are you looking for?
The thesis is pretty simple. I don’t need to tell you about the attractiveness of the African market for developing technology and digitisation—high-growth population, rising urbanisation, digital leapfrogging—all of that is happening within African markets.
Right now is ripe for the digitisation of Africa. Some nations are further forward than others, and there’s definitely an increasing gap. What we’re looking to do with our fund is help accelerate the areas where digitisation has been slow and inevitably close that gap.
We’re focusing on the critical core markets where this is the case. We’re centred in Botswana but also looking at other Southern African countries like Zambia, Namibia, Mozambique, Angola, and Zimbabwe. The countries are where we feel that over the next decade, there’s going to be a significant move forward in technology being applied to advance digitisation across the entire economy.
This is important for a couple of reasons. One is that only by digitising the economy will the economy speed up its development and build economic growth. With a rising younger population, that’s particularly important in this part of Africa. The other side is that economic growth creates opportunities for people to stay in the countries where they were brought up, rather than facing the dilemma of becoming economic migrants to other parts of the continent or the world.
We are providing the capital to allow talented entrepreneurs and engineers in those markets to build digital capabilities at home, with principally international capital, to help digitise the economy and close that digital gap. We’re talking about software technology applied at whatever stage capital is required, because it’s not always early stage or late stage.
The other thing is that the beauty of software is that it flattens the world. We believe the next Mark Zuckerberg could come from Africa, and there’s no reason why it can’t come from one of the SADC countries. With the technological infrastructure and the governmental support to build digital capabilities, there’s no reason why the next entrepreneur to build a multi-billion-dollar company can’t come from this environment. The only reason it won’t is if they haven’t got the capital to start. That’s what we’re trying to do.
What’s the geographical focus, and why Botswana?
Southern Africa countries—particularly those centred around Botswana, but also Namibia, Zambia, Mozambique, Angola, and Zimbabwe—are the principal focus, because that’s where we see the greatest digital gap. That’s the geographic focus, and that’s where we want to provide the capital to help build economic growth.
The fund is based in Botswana because that’s where the most progress has been made and where the greatest infrastructure exists. Maybe Botswana and Zambia, but particularly Botswana. We will do early-stage startup investments from all of those countries. We may run the incubator in other regions depending on how things develop. But we will also invest in companies at a later stage in the more developed countries [South Africa, Nigeria, Kenya, Egypt], but only if there’s a clear economic benefit or digitalisation advantage to the countries we’re specifically focused on.
There needs to be some element of advantage, either economic, maybe they’re building an operation centre or moving staff there, or a digitisation opportunity, where they’re looking to expand their offerings from the more developed markets into the underdeveloped ones. That’s our geographic split.
What’s the average cheque size? Are you sector agnostic?
We’re looking at digitising Africa, but by definition, that means we are not focusing on any particular segment. Different sectors require different capabilities, and there will be opportunities in some and not others. We are sector agnostic.
On stage, we want to invest in, we have three strategies for the fund. It’s a multi-stage fund. The first is the very early stage, and the first cheque is around $125,000. That will be the first cheque into many of the companies we invest in. We’re looking to do 10 investments in every programme we run, and we’re looking to run two programmes a year—20 per year over the five-year investment period. We hope to put early-stage money into about 100 companies in the first five years.
We will also do later-stage cheques into either secondaries or priced rounds for companies that are more developed. Inevitably, those are not likely to be based in Botswana because the ecosystem has not developed that much. They are more likely to be in the more developed markets, but only where there’s an economic or digital benefit to the countries we’re focused on. Those cheques can be anywhere from £500,000 ($676,550) to £2 million ($2.7 million). They’ll be either secondaries, where we buy out early-stage VCs, or primary rounds, where we’re funding the growth of an already developed business.
How are you going to evaluate that many startups in one year, and what’s the criteria for investment?
We are not investing in 100 startups this year. We are investing in 100 startups over the investment period. Our first cohort will be 10 to 15 at the pre-seed stage and two to four at the later stage. That’s phase one, and Launch Africa has the mandate for it. That’s the £5 million ($6.7 million) deployment. We have an anchor investor that has committed £10 million ($13.5 million) to the fund. The first £5 million ($6.7 million) is now, and that’s what we’re deploying over the next six months.
In terms of screening, we filter everything through a form, then through AI, and then through a deal screening process. We have quite strict criteria around the stage we would like companies to be at. For early stages, it’s all about proven traction?
A reason why we chose Botswana to anchor the fund is that it’s a great example of different ecosystem players coming together. There’s a really strong angel network that’s catalysed a real groundswell of local capital and the innovation hub. There’s government support both in real terms by creating the right environment for entrepreneurs, and in the regulatory environment they’re creating. There’s the fintech sandbox they just announced and multiple accelerators in the region.
The crucial thing is that at the pre-seed stage, the capital is not there. Our intention is to fund companies that have come through these programmes in Botswana and more broadly.
We are looking for companies that have a working MVP and traction. Ideally, we would like $1,000 to $2,000 worth of revenue every month, but we’ll go earlier as long as there’s proven traction. Do you have customers? Do you have proof-of-concept signed with corporates? Some kind of traction. Then it’s about finding the right founder. Is the product great? Do we believe it can scale? And do we believe that person is the one who can scale it?
How are you evaluating founders?
We are really looking for someone who has run a business before. Ideally, they have run one business, and it’s been successful or not. Either of those is great because it shows experience.
We are looking for a founder with a growth mindset. At pre-seed, it is highly unlikely that the business they come into the accelerator with is the business they go to their Series E with. So can the founder take growth critique and grow the company? Are they affable? Are they charismatic? Because ultimately, those things go to: can they build a team?’ Are they able to recruit the right people?
When we’re thinking about growth strategy, we want a founder who says, “I think I can do XYZ in ABC timeline.” We’re not looking for someone who says, “I can start a business and scale it through the entirety of southern Africa in six months.” That’s not realistic. We’re looking for founders who say: ” This is what I can do; this is the team I need; here is my plan; let me execute it.”
The way the accelerator runs is we invest £25,000 ($33,924) at the beginning, co-create KPIs with founders throughout the programme, and then invest another £75,000 ($101,772) at the end, making a total £100,000 ($135,705) cheque. We don’t set those KPIs; we co-create them. It’s about testing whether you can create a plan, execute it, re-evaluate, and re-execute in those six months.
At a very early stage, it’s about asking fundamental questions. What’s the problem you’re trying to solve? Why do you think you can solve it? What’s your plan, and can you execute? It’s not that complicated, because we’re broadly investing in ideas and people at this stage. So, clarity about the problem definition, why they think it’s economically viable, because this needs to be something people will pay for and that can build a business, and what their plan is.
A lot of this is about feel and support. You believe in the founders that they can do what they say they’re going to do, that they have a clear plan, a clear vision, and the capability, and then you support them. We always prefer to back people who have done it before, but a lot of these people will not have. That’s part of ecosystem-building. You have to enable people to learn from others. That’s why the cohort is important.
Martin is also non-executive chair of a fund in London called Bethnal Green Ventures, which is a social impact fund. Bethnal is raising its third fund and has been running accelerators for 15 years. We want to bring some of that knowledge, both the Africa lens through Launch Africa and the experience and best practice from Western markets, to see if we can help accelerate these businesses. Each accelerator we run will change. But we are there for the long term. We’re not just running a programme because it’s being funded or trying to find one brilliant founder to return the fund. We’re trying to build the ecosystem that will enable the whole industry to grow.
What’s the LP mix of the fund? What is the fund life, and how long did it take to raise?
We have been exceptionally fortunate, with Steven Lansdown coming in as the anchor, providing 20% of the fund. Fundraising is a whole lot easier with him on board.
We are looking to raise funds broadly from European investors, from family offices, from some individuals, and from institutional capital. There will probably be some foundations. We will talk to development finance institutions.
We essentially sat down with Steve six months ago, agreed on the format of the fund, and agreed we would get out and do this first deployment, which makes fundraising a lot easier, because once we have done one accelerator and made a few deals, it is much easier for others to get visibility on what they’re investing in.
We will go to more non-traditional LPs and look to get a smaller number of larger cheques to make up the £50 million ($67.8 million). We’re starting with the first £10 million ($13.5 million), and fundraising will start in earnest over the next six months.
The first close is £5 million ($6.78 million), just to get us going. The commitment is £10 million ($13.5 million).
What value-add is the fund giving founders, beyond capital?
In an emerging and developing market, you can’t just write a cheque. You have to work.
For phase one, we are leveraging Launch Africa’s platform offering. There are $1.5 million worth of credits there from all our different partners like Google, AWS, and Microsoft, and local providers as well. It’s really important that our founders’ brain space is on growing the business, not wondering: can I afford to experiment with my cloud? Can I afford this CRM? Which one should we try? We give them a pre-vetted starter kit so they can just execute their plan.
When it comes to expansion in different markets, we want to connect them to the leaders in the institutions they need for their customers. For example, for our launch event, we invited all the heads of different banks in Botswana. We are leveraging local networks and the innovation hub in every country. We are activating a network of corporate leaders that we can plug portfolio companies into because go-to-market on the continent is so much easier if you’re working on a paid proof of concept with a corporate.
They also get mentoring from us, but also from other founders in the community, and from both local and international experts. Peer support: creating an environment where founders talk to each other and share knowledge and problems. If someone’s looking for a compliance officer for fintech or wants to know about getting a banking licence in Zambia, being able to say, “This is the person you go to,” and short-circuiting all those conversations.
How is the fund thinking about macroeconomic conditions in Africa, especially currency devaluation?
It is a real concern, and it always is for international capital. But we believe we will still be able to get a return. That’s where diversification comes in. If we channelled all our money into one country with a quickly devaluing currency, we would not be able to make that back. Equally, that’s why we are not investing only in Botswana; that would also make returning the fund harder. Spreading the portfolio out, with an emphasis on expansion into multiple southern African countries.
We would like our portfolio companies to have expanded into at least three southern African countries within a year of investment or at least have a tangible plan. Instead of just earning in pula, they are earning in multiple currencies, which helps them as well as us, for their own operating expenses and expansion. Diversification is key, and we are very mindful of currency.
Fundamentally, this is venture investing. The potential returns need to be big. If you have multi-currency exposure, it balances out. This is not a currency play. We are not going to try to play the currency markets. We are going to invest in good businesses. If you invest in good businesses and they grow, whether in local currency or international currency, there will come a time (because this is a strategic 10-year fund) when it balances out. For short-term currency fluctuations and devaluations, we just have to roll with it.
What’s your exit strategy and exit pathway?
Because the fund is multi-stage, it is more interesting for investors. If you are purely doing an accelerator play, you have a certain timeline to exit and a very high failure rate. With secondaries and priced rounds, you have much greater clarity and visibility on exit. It tends to be sooner, but the returns are not quite so good. It will be a blend.
For early-stage companies, exits could be a range of things, like larger consolidators, larger industrials coming in, strategic-type sales, or other funds picking them up once they scale. For later-stage and secondaries, we would probably have visibility on exit by the time we go in.
In the next decade, we will see a lot of private equity money coming into later-stage companies looking to do roll-ups, because private equity needs scale. Right now, the exit environment is tough, but in the next five years, which is realistically when we’d be looking to start to see realisations, the environment will be very different. I think we will see a lot of international private equity money coming into the continent.
When you go into any venture business, you have to look at it with a view to what its likely exit is, over what time frame, and what it could be worth. We do that like any other venture business. Most of them do not turn out the way you think. But that is the nature of venture. Build a sensible business that’s run well and growing well, with decent margins, and they will find an exit.
Some of the secondaries that happen in African tech usually have haircuts on them. What’s your strategy around that?
With every secondary, you have to look at it case by case. The reality is we will be looking to come into good assets at a discount to their value. We have to do an independent valuation to make sure we are comfortable with it, irrespective of the last round or how they are pricing.
We are working on the basis that if we come in and take out early VCs, the question is about how much upside there is, not whether they lose money. Liquidity is very important right now, and we understand that. Having said that, this is not all about price. We are not going in just to squeeze people at a tough time. We are going in to get decent businesses we believe can make a good return for us in an acceptable period of time.
We will take it on an individual basis. This is where experience comes in. We have no fixed policy. We expect discounts, but every company is different when you look into it: their trajectory, where they are, the potential, the exit, and the other investors.
Why specifically Botswana? You could have set up in several other southern African countries.
The fund is domiciled in Guernsey, but we have chosen Botswana as our operational base for different reasons. One: the infrastructure is there, and it’s a very good environment for startups. Two: Steve Lansdown has a long connection with the country, and some of the investment upside will go into the Tuli Conservation Trust, which is Steve’s charity. There is an impact side specifically for Botswana.
They are expanding their operations into other parts of Southern African countries. It is a combination of wanting to put something back from an impact perspective and the infrastructure they have in place.
