How much did African startups raise via venture funding in 2019? Very challenging question. Disrupt Africa has US$491.6 million while WeeTracker has US$1.34 billion. Yes different reports with two different amounts. That is typical in our continent. I have shared both for you to decide which one is closer to reality.
Yet, the reports are not wrong. What happens is largely how the data people classify the companies. A report can include a firm founded in America as an African company because it does most of its businesses in Africa. Another report would exclude such a firm because even though it is operating in Africa, it is not African. Because I am a Nigerian, and we like big suits, cars and only-in-number big GDP, I will go with the higher number! Not doing that will make people feel bad here.
But some things converged well: Nigeria and Kenya are the action countries, and fintech remains the sector of choice.
The year 2019 was a record-breaking one for African tech startups, with 311 companies securing US$491.6 million worth of investment.
For the fifth consecutive year, Disrupt Africa is releasing data on the tech investment ecosystem across Africa, contained in the “African Tech Startups Funding Report 2019”.
The report details how Kenya and Nigeria emerged as the premier investment destinations on the continent in 2019, attracting US$149 million and US$122 million in funding respectively. Egypt continued its development into a major continental tech hub, with more startups from the North African country securing investment than anywhere else. South Africa’s growth slowed, according to the report, which also contains in-depth data on the investment landscapes in Ghana and Uganda, as well as an overview of activity in 13 other countries.
The number of investors in African tech startups jumped by 61 per cent to reach 261.
Sector-specific research shows the fintech sector remained the most popular among investors, though its share of total funding fell to 21.8 per cent as other sectors, notably logistics, transport, e-commerce, agri-tech and e-health, enjoyed bumper years.
African startups attracted a record high of $1.34 billion in venture capital during 2019, with fintech seeing $678.73 million alone, according to WeeTracker.
Its Decoding Venture Investments In Africa 2019 Report found that 427 startups raised funding throughout the year, and a mere 6% of these accounted for 83% of the total investments.
Over 75% of the deals were in Nigeria, Kenya and South Africa, the report found, with fintech continuing as the sector that attracted the most funding.
Nigeria led the investments with $663.24 million, followed by Kenya and South Africa.
Kenya had 283.64% growth over the previous year’s funding amount, WeeTracker found. Nigeria and Kenya accounted for $1.09 billion or “a whopping 81.49% of the total VC money raised in Africa”.
In 2018 African startups raised $725.6 million, and $203 million in 2017.