Nigeria, Kenya Lead As African Tech Startups Attract U.S.$1.2 Billion

By Chima Akwaja

Kenya, Nigeria and South Africa received 78 per cent of the total funding of $1.163 billion for Africa’s technology startups last year confirming the attractiveness of African entrepreneurs and their ability to transform the continent into a global power house.

According to Partech Africa’s 2018 annual report on the financing on the continent, this include equity deals in tech and digital spaces, and funding rounds higher than $200,000 and lower than $100 million. Deals covered include African startups only i.e. companies with their primary market in Africa itself.

In 2018, 146 African startups raised a total of $1.163 billion in equity through 164 rounds, this is more than 108 per cent growth year on year (YoY), compared to more than 33 per cent in 2016 and more than 53 per cent in 2017. This represents x4.2 growth multiple over the last 36 months.

The technology sector in Nigeria, which has the continent's biggest population and one of its strongest economies, is generating significant investment from venture capital firms both inside and outside Africa. Photo: ADEOLA OLAGUNJU

Kenyan startups led with $348 million (+136 per cent YoY) in funding over 44 deals (+76 per cent YoY), Nigeria has attracted $306 Million (+167 per cent YoY) in funding over 26 deals (+53 per cent YoY) and South Africa slowed down compared to Kenya and Nigeria, with $250 million (+49 per cent YoY) in funding over 37 deal

According to Cyril Collon, General Partner from the Partech Africa Fund, “It’s quite simply astonishing. When we started our journey to create the Partech Africa Fund in 2015, we had anticipated the $1billion mark to be broken by 2020. We are now already two years ahead of our projections.”

In 2018, the report tracked 164 rounds of funding raised by 146 start-ups compared to 128 rounds from 124 startups in 2017, a +28 per cent growth YoY. The report also adds that Series A & B stage startups attracting funding are massively accelerating with 70 rounds (+46 per cent YoY) and that the number of large venture growth deals have increased as well, with 14 rounds (+100 per cent YoY), totaling $602 million (+120 per cent YoY).

In the rest of Africa, there were 19 countries with at least one equity tech deal above $200,000 this year, compared to 13 countries in 2017, an indication that funding is growing across the continent and not just in the top three markets. Egypt leads with 19 deals, nearly catching up with South Africa in activity.


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