Wednesday, January 27

African tech startups raised $1.163B in equity in 2018

African tech startups raised $1.163B in 2018 according to Partech Africa’s 2018 annual report on the financing on the continent confirming the attractiveness of African entrepreneurs and their ability to transform the continent into a global powerhouse.

The report covers equity deals in tech and digital spaces, and funding rounds higher than US$200K and lower than US$100 Million. Deals covered are includes African startups only i.e. companies with their primary market in Africa itself.

In 2018, 146 African startups raised a total of US$1.163 Billion in equity through 164 rounds, this is a +108% growth YoY, compared to +33% in 2016 and +53% in 2017. This represents x4.2 growth multiple over the last 36 months.

“It’s quite simply astonishing. When we started our journey to create the Partech Africa Fund in 2015, we had anticipated the $1 Billion mark to be broken by 2020. We are now already 2 years ahead of our projections”, says Cyril Collon, General Partners from the Partech Africa Fund.

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% growth YoY.

The report also adds that Series A & B stage startups attracting funding are massively accelerating with 70 rounds (+46% YoY), and that the number of large venture growth deals have increased as well, with 14 rounds (+100% YoY), totaling US$ 602 Million (+120% YoY).

PE investors and major corporate players are now joining the game earlier, investing early & growth stage tickets in African tech startups.
Kenya, Nigeria and South Africa received 78% of the total funding with Egypt close behind, an exact repeat of last year.

Kenyan startups led with $ 348 Million (+136% YoY) in funding over 44 deals (+76% YoY), Nigeria has attracted US$ 306 Million (+167% YoY) in funding over 26 deals (+53% YoY) and South Africa slowed down compared to Kenya and Nigeria, with US$ 250 Million (+49% YoY) in funding over 37 deals (-12% YoY).

In the rest of Africa, there were 19 countries with at least one equity tech deal above US$ 200K this year, compared to 13 countries in 2017, an indication that funding is growing across the continent and not just in the top 3 markets. Egypt leads with 19 deals, nearly catching up with South Africa in activity.

Regarding French-speaking Africa, Senegal confirms itself as the leading hub with US$ 22 Million raised in 4 deals. Continue reading

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