startup ecosystem

Africa: Despite Covid-19, startups raised $4bn in 2021

By Seth Onyango

Posted on December 21, 2021 16:58

Jumia © REUTERS/Temilade Adelaja
REUTERS/Temilade Adelaja

Africa’s startup ecosystem rebounded in 2021, hauling in a record $4bn before year-end, reflecting a surge of investor interest in the continent’s rapidly-growing tech marketplace.

By Seth Onyango – bird Newsroom

According to Wee Tracker, Africa is now home to seven unicorns: Jumia, Interswitch, Flutterwave, Andela, Wave, OPay and Chipper Cash.

Five of these became unicorns this year – including two in September alone – indicating levels of interest in Africa’s startup market not seen before.

Startups in Nigeria, South Africa, Egypt and Kenya – considered the continent’s big four – gobbled up the lion’s share of the over $4bn raised through 2021.

In November 2021 alone, African startups raised $605m, which is nearly half the total amount of funds raised by Africa’s startups in all of 2020 – around $1.3bn according to data-driven research firm, Briter Bridges.

According to Briter Bridges, while financial technology companies retain the lion’s share of total funding, cleantech is increasingly attracting capital from local and international investors, including a growing number of corporates interested in fast-tracking their transition to renewable energy.

“Healthcare, data and IT infrastructure, and agriculture follow as more private companies reach maturity, but ticket sizes remain contained compared to those across fintech and cleantech,” the firm said.

According to Connecting Africa, Nigeria, South Africa, Egypt and Kenya accounted for 80% of the total raised on the continent up until the end of November, with 35% of capital raised in Nigeria alone.

Nigerian startups hauled in $1.37bn in 2021, South Africa attracted $838m, Egypt – $588m, and Kenya raised $375m. Startups in Africa’s most populous nation landed over 200 deals for the year, while the remaining three countries counted over 100 deals each.

Outside the big four, other proactive markets were Senegal and Tanzania whose startups raised $222m and $96m respectively, according to Connecting Africa.

One of the biggest success stories was Chipper Cash, which raised a total of $250m this year. The authors, Max Cuvellier and Maxime Bayen decided not to pin the raise to Ghana, saying the startup’s Ghanaian and Ugandan co-founders and its African HQs split between Ghana and Kenya “make it quite pan-African,” the Connecting Africa report said, quoting from Big Deal Africa.

“Without Chipper Cash, Ghana raised $48m in 2021; Algeria – $30m; Morocco – $29m; Tunisia – $23m; Uganda – $18m; Rwanda – $16m; the DRC – $12m and Cameroon – $11m.”

The Briter Bridges report can be found here. The Big Deal data can be found here.

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