Technology has, without a doubt revolutionized our world. I mean, where was Amazon, Alibaba, Uber, Facebook and Google twenty years ago? The answer- not yet started! It is quite remarkable that within a short span of time these tech companies grew! Today’s Forbes list of richest people is populated at the top end by Tech entrepreneurs.
In times past being a techie was seen as “nerdie” and “not cool”. Today tech types are cleaning out and smiling to the banks. And it’s not only in developed countries. Africa currently has fascinating tech companies like Konga, Mpesa, Bandeka, Hummba and Jobberman. These companies are also creating opportunities and building wealth for their owners.
So what makes a tech company?
Tech companies use technology. Whether for solving new or existing problems, improving processes or to make life better. According to Alex Payne, co-founder of Simple, “You are a technology company if you are in the business of selling technology – if you make money by selling applied scientific knowledge that solves an existing problem”.
Greg Bettinelli of Upfront Ventures opines that “a tech company uses technology to create an unfair advantage in terms of product uniqueness or scale or improved margins. Ask the question: Could this company exist without technology? If the answer is no, it has to be a tech company.”
It’s clear from the above definitions that tech companies are many and varied. Gabriella Mulligan in her article, “Investment in Africa’s tech start-ups on the rise,” posits that from mobile money to cargo drones and rugged portable wifi hotspots, Africa’s innovators are generating new technology to tackle consumer needs and development challenges.”
Here are several reasons why investing in tech companies might be the way to build wealth and fortune:
Investors are more likely to fund tech companies
According to Disrupt Africa portal African tech startups raised funding in excess of US$129 million in 2016, with the number of startups securing funding up by 16.8 per cent compared to the previous year. It’s so much easier to seek and find funding from international investors as a tech company.
Tech companies tend to seek solutions to Africa’s major problems
Financial inclusion is one of the biggest challenges in Africa. According to the IMF less than a third of adults have access to basic financial services. This led to the establishment of many fintech companies using technology to achieve financial inclusion. Fintech is extremely attractive due to the potential for high returns. In addition sectors like health and agriculture have also experienced a boom in tech startups.
They are innovation drivers
Tech companies base their success on seeking for better ways of doing things. Furthermore, they tend to think differently or outside the box. Due to the novel nature of their ideas/approach they have a good chance of resonating with the marketplace.
Opportunities exist to get in early
Tech companies are more likely to be evolving. Many are on the lookout for people who could add value. It is thus easier to become an investor since success is in the future. In fact Angel List houses information on thousands of startups looking for investors all over the world. There are startups looking for co-founders that they will compensate with stock options on the website.
The African continent is filled with a teeming young population
The African continent is predominantly young. And the young love and easily adapt to technology. Tech companies rise to the occasion by coming up with solutions and offerings for this demographic. And the youth speak by wholeheartedly adopting these products making their promoters wealthy.
Please ensure to do your due diligence before investing. Do not invest in what you don’t understand no matter what. Don’t forget to dot all “i’s” and cross all “t’s” as well. Seek for legal, financial and investment advise before taking the plunge. Most importantly be guided by the timeless financial advise, “If it’s too good to be true it probably is!”
Make investing in tech companies your investment strategy for wealth and financial success.