It’s US$ 2.02 Billion raised in equity funding by Tech Start-ups in 2019! Yes, a 74% YoY growth from 2018 figure of US$1.163B.
2019 was another year of breaking records and achieving new milestones for the dynamic and fast-growing tech investment ecosystem in Africa. “It’s clear now that African tech growth is neither a minor nor a temporary phenomenon. There are certain to be ups and downs in the future, but this is the new reality that significantly redefines the scope of Private Equity in Africa and, further, the economies of the continent.” the report stated.
As investors across the globe direct investment into the ‘new baby’ of startup ecosystem, the narrative will now look at return on investment, value creation and how these inflows contributes to the total industrialisation and growth agenda of the continent. It will also analyse the effect of the African Continental Free Trade Area (AfCFTA) in spreading the benefits of the investment across continent.
The yearly funding amount continues its exponential growth, having expanded by 5.5x over the last 36 months. The report also captured 250 rounds raised by 234 start-ups compared to 164 rounds by 146 start-ups last year, representing +52% growth YoY. US$ 1.8 Billion out of the total US$ 2.02 Billion were publicly disclosed data indicating a more open attitude within the ecosystem. Massive densification of early stage with 206 transactions (+57% YoY) in Seed & Series A investments totalling US$ 620 Million (+116% YoY) which confirms investors’ confidence in taking early bets in Africa.
Nigeria is on top attracted a record high of US$ 747 Million in tech VC investment (37% of all funding), Kenya is 2nd place both in total funding as well as number of transactions with US$ 564 Million, Egypt has now secured a 3rd place both in terms of total funding as well as in the number of transactions with US$ 211 Million and South Africa has slowed down compared to Kenya and Nigeria in terms of total funding, with US$ 205 Million. 10 Ghanaian start-ups raised an aggregate of US$ 55 Million.
In terms of sector, driven by Fintech, financial inclusion remains the main investment sector on the continent, attracting 54.5% of total funding. However, the online & mobile consumer services sector has witnessed a steep increase to 29.3% of total funding (vs 19.6% in 2018) while B2B and tech adoption represents this year only 16.1% of total deals (vs 30.4% in 2018).
Source: Partech Africa (2019 AFRICA TECH VENTURE CAPITAL REPORT)