Africa tech investment holds steady in 2020, despite COVID-19
FUNDING for African tech startups continued to flow in 2021 despite pressures from COVID-19, dashing fears that the pandemic would ravage investment, a new report found. African start-ups received US$2,44 billion in investment in 2020 — only around $100 million less than the year before without COVID-19, according to a new report by Briter Bridges.
Using data from more than 70 investors, “Africa’s Investment Report 2020” recorded 1 075 deals compared to 1 119 in 2019.
The most funded sectors were fintech (33%) and cleantech (22%) — an umbrella term that encompasses green, sustainable and environmentally friendly technologies.
This was followed by health (9%), agriculture (7%) and data and analytics (7%).
As the economic devastation wrought by the pandemic ran rampant worldwide, the United Nations Economic Commission for Africa (Uneca) warned that the impact on remittances and tourism would hit FDI flows and result in capital flight and a slow-down in investment.
But the latest figures put to bed concerns that the pandemic would see investors withhold capital and funds dry up.
On the contrary, there were some huge deals in 2020 and a string of high-profile acquisitions especially in tech and agricultural sectors.
Payment platforms, often boosted by government-mandated moves towards digital spending, witnessed a flurry of activity.
US fintech Stripe acquired Nigeria’s Paystack for over US$200 million. While UKbased payments company Network International bought Kenya’s DPO Group for US$288 milion and African-inspired WorldRemit acquired remittances company Send Wave for US$500 million.
The value of the disclosed M&A market was at least US$1,12 billion in 2020, the report says.
In terms of successful rounds, Estonian ride-hailing app Bolt raised US$182 million to expand its services in Europe and Africa.
Kenya’s food-distribution startup Twiga Foods raised US$30 million in a Series B round led by Goldman Sachs.
Egypt-based health-tech Veezeta raised US$40 million from several Gulf funds to expand its services in the MENA region.
The total value raised during all rounds came to US$1,07 billiion with an extra US$243 million in undisclosed deals.
All the rounds over US$100 million involved foreign companies investing in Africa.
Though deals took a nosedive at the onset of the pandemic in March, they recovered in July and August, tailing off again towards the end of the year.
The report found that there were more than 1 800 co-founders involved in raising money, of which 85% were male and 15% female.
The most funded products were in solar energy, data and analytics, PAYG, payments, transfer and remittances, financial API, telemedicine, supply chain management, insurance and digital banking.
The most funded products were in solar energy, data and analytics, PAYG, payments, transfer and remittances