In 2019, there were at least 250 rounds of equity investment above $200,000 into African tech startups.
These funding rounds involved 234 startups raising a total of US$2.02 Billion in equity according to a funding report by Partech Africa, an Africa-focused venture capital fund.
This represents a 550% increase in Africa’s equity funding receipt over the last 36 months.
“A powerful ecosystem is being built leading to local talented entrepreneurs,” Cyril Collon, a general partner at Partech Africa, tells TechCabal.
In his view, 2019’s funding returns highlight the “scope of private equity on the continent, with Venture Capital on the way to becoming the number one asset class in Africa.”
From Lagos through Nairobi, to Cairo and Johannesburg, tech founders are creating innovative services in diverse markets of interest to investors. 2019 was marked by strong Chinese interest in African fintech, but it was also a good year for edtech and energy tech.
Of the 234 deals that were done in 2019, per Partech Africa’s findings, 71 were above $5 million.
- 250 rounds by 234 startups, compared to 164 rounds by 146 startups in 2018
- 206 transactions were seed and Series A investments
- Financial inclusion startups attracted 54.5% of the total funding
More than a third of the total funding into African tech went to Nigerian startups, though the number of deals was less than three other countries. Nigeria also stands out as Africa’s fintech hub receiving 66% of total fintech investments into the continent in 2019.
Nigeria, Kenya, Egypt and South Africa received 85% ($1.7 billion) of the $2.02 billion Partech Africa tracked. Egypt’s entry into the top three for the first time could be due to sensational deals like Swvl’s $42 million Series B in June 2019.
In francophone Africa, Senegal led in 6 deals within the range covered. The value of the deals amounts to $16 million.
It is not a staggering figure compared to the bigger markets. But Collon believes countries in the subregion could benefit from ecosystem-building initiatives. He is hopeful that the Senegalese Startup Act, recently passed into law, could positively boost Senegal in particular, leading other countries to think up similar initiatives.
Partech Africa’s report covers funding rounds that were particularly for equity investment, excluding grants or loans.
With offices in Dakar and Nairobi, Partech Africa added six new companies to its portfolio in 2019, leading a $5m raised by Kudi in April. The fund also made two follow-on investments for a total of 8 deals in 2019. The top five investors in Africa in 2019 executed no less than 7 deals each.
Half of the eight transactions Partech Africa deployed in 2019 were between $3m and $7m. Earlier in that year, they also doubled their Africa VC fund to $143 million.