African startups raised $1 million each 2 hours in 2021 — Africa: The Huge Deal

Even to an informal observer, 2021 was a large yr for the African tech ecosystem. It was the yr when there have been extra disclosed funding rounds than we may sustain with. Information from varied sources present that startups on the continent obtained over $4 billion from buyers in 2021. That represents greater than double the investments gotten in 2020.

Numbers, they are saying, don’t lie, and with assist from Briter Bridges’ Africa Funding Report 2021 and information from Africa: The Huge Deal, we’ll be extracting some insights.

Funding for women-led startups must be higher

A lot has been written concerning the close to absence of financing for women-led startups. Whereas startup funding continues to develop, it’s nonetheless disproportionately skewed in direction of startups led by males or at the least one man on the founding workforce. 

Odunayo Eweniyi, Co-founder, FirstCheck Africa

The Huge Deal experiences that solely 0.95% of the funding raised by African startups went to startups based or led by a girl. Whereas this proportion is lower than that of 2020 (2%), it’s partly defined by the truth that funding raised in 2021 was 2.5x greater than 2020’s figures. 

Nonetheless, it’s noteworthy that whereas the overall quantity raised by ladies is growing, the share of funding going to startups based or led by ladies is on the decline from 4% in 2019 to 0.95% in 2021.

To be truthful, ladies worldwide have a tougher time elevating cash than males, and with Africa’s startup scene in its early phases, that’s to be anticipated. Nonetheless, extra can and must be performed to fund African startups based by ladies. Luckily, it appears extra buyers are keen to do that with corporations like FirstCheck Africa offering funds for feminine founders.

Fintech reigned supreme 

As has been the case in the previous few years, fintech startups obtained the majority of funding in 2021. In response to Briter Bridges, 62% (~$2.9 billion) of whole funding in African startups went to fintech startups, double the 31% recorded in 2020. 

Healthtech and Biotech observe intently at 8%, with logistics (7%), schooling (5%), and cleantech (5%) rounding up the highest 5 sectors by funding worth. With funds nonetheless posing an issue for companies and people, fintech appears set to retain its place as a most well-liked vacation spot for funding in Africa for some time.

4 nations nonetheless dominated

Identical to fintech and males dominate funding obtained, the Huge 4 – Nigeria, Egypt, South Africa, and Kenya – nonetheless dominate Africa’s funding scene. For instance, Nigeria alone accounts for a whopping $1.5 billion of the overall funding. 

Max AB, an Egyptian eCommerce startup raised a $55 million Sequence A throughout two rounds in 2021.

One nation that’s price speaking about is Egypt. With 562 lively tech startups, it sits behind solely Nigeria, South Africa, and Kenya because the nations with essentially the most startups in Africa. Startups within the nation additionally confirmed vital progress when it comes to the quantity of funding they obtained. Nonetheless, Briter Bridges’ report reveals a rising curiosity in Francophone Africa, impressed, maybe by Wave’s unicorn standing.

Extra $100+ million offers

It’s not day-after-day that you just hear of offers exceeding $100 million in Africa. Even once they occur, they’re usually mergers and acquisitions, however 2021 noticed the very best variety of $100+ million offers ever. There have been 12 offers price at the least $100 million, accounting for $1.9 billion of the overall funding worth.

TradeDepot. Supply: Provided

Some startups that raised at the least $100 million embody Andela, $200 million Sequence E; Flutterwave, $170 million Sequence C; Chipper Money, $250 million Sequence C throughout two separate rounds; OPay, $400 million Sequence C; Commerce Depot, $110 million Sequence B; and Jumo, $400 million led by Constancy Administration & Analysis Firm.

Overseas investments dominate, however native buyers stepped up.

To date, overseas buyers nonetheless dominate funding for African startups. Briter Bridges experiences that the US and the UK paved the way. In Africa, South Africa and Mauritius are the highest two nations the place native buyers have their headquarters. Asian buyers aren’t unnoticed with rising curiosity from Singaporean, Chinese language, and Japanese buyers.

LoftyInc Capital Administration Administration Companions. Supply: Provided

Nonetheless, native African buyers are more and more stepping up actions. In 2021, a number of African buyers threw their hats within the ring or raised new funds. A few of these buyers embody Ventures Platform, Savannah Fund, FirstCheck Africa, LoftyInc Capital, and Flat6Labs.

On a lighter observe, among the issues that stand out embody the truth that about 43% of startup founders have their alma mater on the continent. I could also be reaching, however I consider this helps them faucet right into a wider community when elevating cash for his or her startups, contemplating most of Africa’s startup funding comes from outdoors the continent. Nonetheless, additionally it is a reminder that Africa’s schooling system nonetheless has an extended method to go earlier than it catches up with its Western counterparts. 

With the heights reached by African startups in 2021, it’s logical to anticipate them to be matched and hopefully eclipsed in 2022. Solely time will inform, however 2022 appears set to see extra progress.

Chimgozirim Nwokoma

Unintended author, protecting Africa’s startup panorama and its heroes.


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