Startup insights from 2020

The wrath the pandemic inflicted on 2020 needs no reiteration. This of course impacted the African startup ecosystem. But perhaps not as much as some may think.

Disrupt Africa, one of the leading voices on the African tech scene, recently published their Funding Report for 2020 - an extensive 80 page document which does an African startup funding deep dive across geographies and sectors.

Here are the highlights…

Record breaker

In spite of the difficulties that 2020 brought, startup funding across the continent surged ahead. So much so, that a record number of startups raised funding last year.

397 startups raised over $700 million

What’s interesting to note is that number of startups raising funding saw a YOY increase of 27%, but the total amount of funding increased by 43% compared to 2019.

Funding largesse

The top 5 largest funding rounds were allocated across a diverse range of sectors including, healthtech, fintech, and agritech.

Egyptian healthtech venture Vezeeta took top spot raising $40 million. Nigerian fintech player, Flutterwave, raised $35 million.

South African CRM app Skynamo raised $30 million in January. Kenyan agritech company Twiga Foods also raised $30 million where the round was led by Goldman Sachs. Kenyan conservation tech solution Komaza raised $28 million.

Investor growth

The number of investors backing African startups grew by over 42% between 2019 and 2020, bringing total number up to 370. The most popular investments were from both VC’s, family offices and accelerators.

The VC with the most investments in 2020 was Kepple Ventures with 36. North African incubator, Flat6Labs, led the field of incubators notching up 29 investments.

The big 4

Four nations accounted for over 75% (307 of 397) of the funded ventures on the continent.

A common misconception is that South Africa always tops these tables, but in 2020 they only managed to place third behind Nigeria and Egypt - two countries who have been making great entrepreneurial inroads in the last few years.

When it came to total value of funding, the picture is a little different. Kenya showed that in 2020 its startups in aggregate garnered the largest investment.

Sector breakdown

Unsurprisingly fintech still leads the table in this category where a quarter of the funded startups were fintech. Entertainment was the fastest growing sector where the number of companies raising capital lept by over 1700%.

Recruitment & HR also showed impressive sector growth with a YOY increase of 270% when it came startups raising funding.

Sign of the times

The pandemic was a categorical catalyst for healthtech across the continent. By the end of 2020 this sector soared up the investment table into second place with $102 million raised.

It ranked third in number of startups that raised funding with a total of 41, coming in behind fintech and e-commerce.

With the “new-normal” looking increasingly more like it could be here for a good while, healthtech will most likely continue to make gains in 2021.

Here at African Tech Story we believe that healthtech will be the sector that investor’s will be watching with eagle eyes this year.


In the News 🚀

🇳🇬 Nigerian analytics startup, Connected Analytics, has raised a seven-digit pre-Series A round. The round was led by Hong Kong's Betatron Venture Group.

🇾🇪 After going the Y Combinator accelerator last year, Egyptian proptech startup Sakneen raised $1.1 million seed round.

🇿🇦 Synatic, a South African data automation platform raised an undisclosed seed round from UW Ventures, Allan Gray and E Squared.

🇳🇬 Xend Finance from Nigeria which offers a decentralised finance (DeFi) platform has topped up its funding to $2 million.


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