Start-ups: which 7 African tech companies raised the most capital in 2019?

By Quentin Velluet
Posted on Tuesday, 31 December 2019 10:15

In the offices of the start-up Touch, a platform aggregating various mobile payment operators. © Youri Lenquette/Jeune Afrique/2019

Nearly 100 African start-ups raised capital in 2019, a majority of which specialise in fintech in English-speaking Africa. Below is our overview of the top seven funding rounds in an outstanding year for tech on the continent.

With $1.24bn raised through 97 investments, 2019 has been another extraordinary year for African start-ups, beating the 2018 record of $1.16bn in capital raised.

Anglophone Africa contributed significantly to this success, raising $528m of the total, as estimated by investment banking firm FT Partners Research.

Other trends prevailed in 2019, with Chinese investors on the rise and growing interest in agricultural start-ups.

Read on to learn about the African start-ups that led the most successful capital raising rounds in 2019, making them ones to watch in 2020.

No. 7 – PalmPay – $40m

Nigerian digital payments company PalmPay has caught the attention of China’s major mobile phone maker Transsion and two other sector players, NetEase and Mediatek. Last November, the three investors injected a total of $40m into the company managed by Greg Reeve, thereby allowing the PalmPay application to be preinstalled in all Transsion mobile phones, including its Tecno, Infinix and iTel brands, representing 20 million phones in 2020.

No. 6 – Retail Capital – $41.7m

In March, Retail Capital, a South African fintech firm founded by Karl Westvig and which provides funding solutions for small to medium-sized businesses, raised $41.7m in a second funding round led by holding company Crossfin Technology.

The investment will primarily support the development of its distribution channels. Seven months later, the start-up partnered with local payment service provider PayGate to create a short-term working capital service called Easy Advance. To date, Retail Capital has supported 10,000 businesses, chiefly restaurants and retailers.

No. 5 – Swvl – $42m

Swvl promotional video screenshot © Swvl/Youtube/2019

Pronounced “swivel”, the start-up was created in Cairo in 2017 by Mostafa Kandil, a thirty-something who decided to leave the tech world. While working as head of operations at Rocket Internet, he launched Careem in a number of cities in Egypt and Pakistan, as well as Istanbul.

The project inspired him to create his own private bus-based public transport service, Swvl. The company raised $42m in June during a third funding round led by Swedish VC Vostok Ventures and Dubai-based BECO Capital. Now with a valuation approaching $100m, the start-up wants to expand elsewhere in Africa. Already present in Nairobi, Kenya, Swvl launched operations in Lagos, Nigeria in July.

No. 4 – BBOXX – $81m

UK-based start-up BBOXX carried out not just one, but two funding rounds this year, raising $31m in January and $50m in August.

With operations in Rwanda, Kenya, the DRC and Togo, a subsidiary in which France’s EDF owns a 50% stake, BBOXX, co-founded by Mansoor Hamayun, Christopher Baker-Brian and Laurent Van Houcke, will use this newly-raised capital to supply electricity to 10 million Africans by 2022 through its off-grid solar energy solutions.

No. 3 – Andela – $100m

The six founders of Andela (from left to right): Brice Nkengsa, Iyinoluwa Aboyeji, Ian Carnevale, Christina Sass, Jeremy Johnson, Nadayar Enegesi. Rotimi Okungbaye

The fourth funding round for Andela, a Lagos-based American company specialising in the hiring, training and placement of African software developers on behalf of major international tech companies, was led by Generation Investment Management, an investment firm co-founded and chaired by former US vice president Al Gore.

Andela raised $100m in January 2019 prior to making an announcement nine months later about a strategic shift in its business model, which pushed the company to let go hundreds of Nigerian, Ugandan and Kenyan developers, despite the fact that it had generated $50m in revenue.

No. 2 – OPay – $170m

After joining forces with Norway-based browser provider Opera Limited, which Chinese billionaire Yahui Zhou acquired in 2016, the Nigerian mobile-based payment and services platform OPay attracted several Chinese investors in June and November. The two successive funding rounds raised $50m and $120m, respectively.

In addition to Opera Limited, OPay’s investors included IDG Capital, Sequoia Capital China, Source Code Capital, GSR Ventures, Meituan-Dianping, GaoRong Capital, SoftBank Ventures Asia, Bertelsmann Asia Investments (BAI) and Redpoint China. The funds raised will help further the company’s ambition of launching operations in Ghana, Kenya and South Africa.

No. 1 – Interswitch – $200m

Interswitch became a member of Africa’s unicorn club – a designation reserved for start-ups with a valuation of $1bn – in November after US corporation Visa invested $200m in the company.

Founded in Lagos in 2002 by Mitchell Elegbe, the digital payments company, which provides access to 17,000 Nigerian ATMs and processes over 500 million transactions per month, is expected to launch an IPO on the London Stock Exchange in early 2020 and continue to expand its footprint on the continent.


This article first appeared in Jeune Afrique

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