Funding for African startups increases to $160m

Monday July 16 2018

M-Kopa Solar Solutions Managing Director Jesse Moore speaks during the launch of a report. M-Kopa Solar received $10 million in African startups funding in the first half of 2018. FILE PHOTO | NMG

By Allan Olingo

African startups have received more than $160 million in the first half of this year, driven largely by Kenyan and Nigerian firms, surpassing the 2017 funding.

A report by research and publishing firm WeeTracker shows that five Kenyan startups, mainly fintech firms, were among 10 companies that secured the highest amount of capital.

In May, Cellulant, a digital payments solutions company with operations in 11 African countries, closed a record $47.5 million investment deal.

Online microlending platform Branch followed, raising $20 million. M-Kopa Solar came in third with $10 million, while software firm Africa’s Talking raised $8.5 million. Agritech startup WeFarm managed $5 million.

In total, Kenyan startups raised $91 million — more than half of Africa’s total funding deals.

“Nigeria, which managed a higher number of deals, could only get a gross of $29.41 million,” notes the report.


Zachariah George, the managing director of startup BootCamp Africa, said entrepreneurs in Nigeria, Uganda, Ghana and Kenya are focusing on fintech, e-commerce, agritech and healthtech.

“In Zimbabwe we have seen a rise in blockchain technology startups, given the implosion of the currency glut, ” said Mr George.

2017 funding
The report also shows that the total funding is three-and-a-half times more than the $47.2 million raised in the first half of last year. There were 72 deals in 2017.

In the six months to June, fintech startups enjoyed most of the funding with 25 deals receiving $95 million, as investors continue to bet on the continent’s evolving money payment and efficient banking solutions.

Healthtech had 13 deals, Agritech 10 deals while e-commerce managed nine deals.

Interestingly, Egypt stands out as the hub for e-commerce, bagging six of the nine deals.

In terms of country funding attraction, Nigeria had the highest number of startups, with 31 securing funding. It was followed by Kenya with 23 firms, while Egypt had 21 and South Africa 19.

The past six months have also seen the establishment of six funds worth $275 million: The $55 million Facility for Energy Inclusion for off grid energy startups; $70 million from Partech Africa for tech startups; the $76 million Digital Africa Initiative by French Development Agency; the $24.8 million Goodwell Investments for fintechs; the $1 million A24 Media for media technology; and the $30 million Rwanda Innovation Fund for tech-enabled SMEs.

These are expected to spur the development of startups on the continent.

Over the past six months, 11 incubators and accelerators were also launched on the continent, led by South Africa and followed by Nigeria.