Wimbartan award-winning PR firm specializing in business and technology sectors across Africa has released its second annual report titled “Reporting Startup Performance in Africa: Aligning Startup and Investor Expectations.“
Details
The report, which aims to gain a comprehensive understanding of investor-startup reporting dynamics, revealed that while reporting frequency has improved, many startup founders 40% they still believe that investors do not fully understand their business or market.
This disconnect creates ongoing challenges to investor confidence and highlights a gap between what founders report and what investors value.
By The Numbers
According to Partech Africafunding on the continent has fallen sharply, with total investment in 2023 falling by 46%. Considering the difficult market conditions, the findings of the report revealed that the majority of investors 72% have had to tighten up their portfolio reporting requirements over the last 18 months, putting more emphasis on sustainability metrics as their main KPI.
With almost two thirds of investors using past references to guide future investment decisions, maintaining consistent and detailed communication is more imperative than ever for founders to secure support in this current funding environment.
Digging deeper
Wimbart’s investor relations report is the first pan-African study to identify pain points in investor relations communications and suggest an optimized approach for adoption by African startups.
Based on last year’s findings – which found that 71% of African tech investors would not consider follow-on investments if portfolio companies did not provide consistent updates – this year’s edition brings a significant change by surveying startup founders for the first time, providing a more balanced view of investor-startup relationships.
Highlighting areas where both parties align with the benefits of consistent reporting and its potential impact, among founders who met the increased reporting requirements, the majority 61% received direct support or intervention from their investors. While extensive reporting can be demanding, it has created opportunities to access critical resources such as funding, strategic guidance and operational support.
Recommendation report
Supported by key partners including Ventures Platform, TLP Consulting, TechCabal, AfriLabsand London African NetworkWimbart’s report reveals a critical communication gap. While most investors 83% believe they have clearly communicated the reporting requirements, only two thirds of founders feel that expectations are understood.
To address these gaps, the report outlines key recommendations for improving investor-startup relationships, including:
- Investors communicate reporting requirements, pace and expectations to founders; provide templates to help founders meet reporting expectations.
- Startups should avoid vanity metrics and focus on important metrics like cost of customer acquisition [CAC]life value [LTV]and customer retention rate to demonstrate a deeper understanding of the business.
- Both parties need to maintain an open line of communication to provide nuance to the data and build the trust needed to build business together.
What They Say
Speaking of the exhibition, Jessica Hope, Founder and CEO of Wimbart, says, “This year’s exhibition takes a step forward by incorporating the voices of startup founders, opening the dialogue. One thing is clear from our 2024 research: ongoing due diligence on Africa’s tech ecosystem is intensifying, with investors prioritizing long-term sustainability and stable financial performance over quick returns.
The reality is that in today’s tough fundraising environment, startup founders can’t afford to overlook clear and consistent reporting – it’s not just beneficial but essential. By keeping the lines of communication open and transparent, startups can build and maintain the trust and support they need from their investors. Without this, access to funding and all-important network support can become increasingly difficult.“
Commenting further, Cola Ainafounding partner of Ventures Platform, says, “In Africa’s dynamic startup ecosystem, local investors have a unique advantage in bridging the gap between investors and founders – our presence in the market enables us to provide hands-on, personalized support that goes beyond capital and our willingness to collaborate without excessive interventions encourages stronger partnerships. As the report reveals, open and consistent communication is key to building mutual understanding, aligning expectations and fostering effective collaboration.
This approach can be cultivated through regular dialogue, a Socratic approach to providing strategic guidance when necessary, and a commitment to protecting founders’ interests. By adopting this communication style, both investors and founders can work and win together. Founders who own this will be empowered with the support and resources they need to scale, benefiting from the experience of local investors and the support of multiple startups.”
Anna EkeledoExecutive Director, AfriLabs, adds “Effective communication between startups and investors is key to building trust and securing the resources needed for growth. The findings of this report underscore the urgent need for standardized reporting frameworks that will not only address the concerns raised by founders, but also provide investors with the clear, consistent data they need to make informed decisions. At AfriLabs, we are committed to promoting transparency and sustainability across the African tech ecosystem, ensuring that both startups and investors can thrive together in today’s challenging market environment.”
You can download the full report for free here.