African technology startups scoop $2b funding

Thursday May 12 2022
Tech start-up.

Kenya ranks among Africa’ four biggest destinations for tech start-up funding after Nigeria, Egypt and South Africa. PHOTO | FILE


Kenya ranks among Africa’ four biggest destinations for tech start-up funding after Nigeria, Egypt and South Africa.

The African Tech Startups Funding Report (2021) shows that last year in the African tech start-up ecosystem, 564 businesses raised $2.14 billion in funding, the bulk of which took place in the “big four” markets – Nigeria, Egypt, South Africa and Kenya.

According to the report the “big four” start-up destinations raked in a combined $1.97 billion over the course of the year, accounting for 92.1 per cent of the overall total funding.

Ghana, Morocco and Tunisia start-ups secured more than 40 per cent of the remaining $170.6 million.

According to the report 64 start-ups from 17 additional markets secured financial support, with gigantic strides made by Zimbabwe, Uganda, Rwanda and Ivory Coast.

During the period Nigeria secured $903.68 million worth of tech start-up funding followed by Egypt ($445.84 million), South Africa ($336.4 million) and Kenya ($291.98 million).


Kenya had 87 startups (15.4 per cent of Africa’s total) raise funding and together they secured $291.98 million or 13.6 per cent of the total pot.

Standout rounds

There were two standout rounds for Kenya in 2021, which boosted the total funds raised.

AI Company Gro Intelligence raised an $85 million Series B round, and agri-tech venture Twiga Foods raised $50 million in Series C. These two companies accounted for 46.2 per cent of Kenya’s annual funds.

Fintech is the most popular sector for investments in African tech, with fintech start-ups breaking the $1 billion funding barrier in 2021.

Last week Kenya and Uganda were ranked among 15 African countries whose financial, health and climate-linked start-ups have the biggest impact potential in Africa.

Some of the firms

Viva Technology and the International Finance Corporation (IFC) long-listed 12 start-ups from the two East African nations to battle it out with 33 others in the continent for the 2022 Africa Tech Awards scheduled to be held in Paris from June 15 to June 18.

Kenya produced nine start-ups for the competition. Listed in fintech is Duhqa, ImaliPay, Lipa Later and Popote Pay. Under healthtech is Access Afya and Zuri Health. In climate tech, the country is represented by Agrotech Plus, iShamba Ltd and Weee Centre.

Uganda has eMaisha Pay under Fintech, Primed E-Health for health tech and Easy Matatu under climate.

According to the report, fintech companies raised $1.03 billion in total funding 2021, up 547.7 per cent from $160.31 million in 2020 bringing fintech’s share of total funding to just shy of the 50 percent mark, a significant increase from 2020 when it accounted for less than 25 percent.

Standout amounts were raised by Nigerian fintech startup Flutterwave ($170 million), Egypt’s MNT-Halan ($120 million), Nigerian retail-tech startup TradeDepot ($110 million) and Kenyan AI platform Gro Intelligence ($85 million).

Others that raised substantial amounts are South African fintech Yoco ($83 million), Nigerian digital bank Kuda ($80 million), Nigerian mobility fintech Moove ($63.2 million), Nigerian energy company Daystar Power ($62 million) and Egyptian e-commerce startup MaxAB ($55 million).

Non-fintech startups still raised over $1 billion between them in 2021, with many sectors more than doubling the amount of funding secured the previous year.

For instance, e-commerce and retail-tech saw total funding leap 271.5 percent to $326.15 million, transport investment grew by 102.4 percent to $105.44 million, logistics saw an increase of 134 percent to $86.75 million and ed-tech funding jumped 516.3 percent to $8.03 million.

The funding report shows the control of the African tech start-up funding by the “big four” countries is a continuation of a multi-year trend whereby a greater share of funding is going to these more established destinations.

Immense growth

According to the report the number of investors in the African tech start-ups sector has been growing exponentially, with the number of new investors joining the business more than doubling to 771 in 2021 from 370 in 2020.

The most active investors are early-stage funds such as Launch Africa Ventures, Kepple Africa Ventures and Musha Ventures.

Local and international accelerators are very active, among them Y Combinator, Techstars and Flat6Labs, while there are a number of busy locally-focused angel networks.

Increasingly, successful African founders such as Paystack’s Shola Akinlade, mPharma’s Gregory Rockson and Flutterwave’s Olugbenga Agboola are starting to back start-ups themselves.

Major global investors such as Tiger Global and Sequoia Capital have been taking their first steps in Africa of late and there is also an uptick in African corporates supporting local startups, most notably in South Africa with the likes of Naspers, Standard Bank and Nedbank

However, the report notes that African tech still has a gender problem, with only 121 (21.5 percent) of the 568 funded startups in 2021 having a woman in their founding team.