2020 Partech Africa Report Reflects African Tech Ecosystem Accelerating

The 2020 Partech Africa report is finally out! The largest Venture Capital (VC) fund dedicated to technology startups in Africa, Partech, has released its Africa Report for 2020 with findings that indicate that the African tech ecosystem is still accelerating with a recorded 359 equity rounds recorded.

It appears that, in the middle of the global pandemic, the African tech ecosystem is still growing fast, with more deals closed, and is getting a boost from the accelerated digitalization of foundational economic sectors.

In 2020, more startups have closed deals than in any previous year: 359 deals were closed by 347 startups, compared with 250 rounds in 2019, i.e., a +44% growth YoY. Another very positive signal is the number of seed deals which massively accelerated, reaching 228 deals (+80% YoY). Venture stages (Series A & B) are continuing to grow (+11% deals YoY) despite a general erosion of round sizes. The growth stage sees a low deal count and a marked drop in ticket size (-60% YoY).

The impact of the pandemic

The report found that although there was strong growth in activity, the total amount raised by African startups overall decreased for the first time in nearly a decade, with an overall decrease of 29% marked at $1.492-billion raised by African startups. 

A secondary impact on African tech startups was the drop in average deal sizes of African tech VC equity deals with a significant lack in mega-rounds of funding. 

Although the monthly breakdown indicated by the report showcases that there was “no clear and significant impact on activity level attributable to the crisis and every month of 2020 saw more deals closed than the same month in 2019.”

Aside from the investors may have reduced their process of funding and a significant round of Seed investment, the report indicates that the ecosystem still benefitted from a boost and acceleration of digitalization of key economic sectors, such as; Agriculture, Logistics & Mobility, Offgrid Energy, and Healthcare.

Key findings

Utilising a methodology that is cover equity deals in tech and digital spaces, and funding rounds higher than $200 000, the report concluded the following; 

• Country breakdown: Nigeria remains the leader with $ 307 million invested, while Egypt is first in equity deal count with 86 deals: an 83% growth year on year. Four countries attracted 80% of the volume invested but 26 countries in total have attracted capital.
• Sector breakdown: Fintech is the first in total equity funding, with 25% of total amounts, but the highlight is the digital transformation of key economic sectors with Agritech (US$ 179 Million), Logistics & Mobility ($ 157-million), Offgridtech ($ 148-million) and Healthtech ($ 141-million).
• Founder gender breakdown: female-founded startups raised 13% of the rounds in 2020 – 4 points down from 17% in 2019 – but they accounted for 14% of the total equity funding, just above 13% in 2019.
• Investor breakdown: Africa’s tech ecosystem is not only attracting more investors (+24% year on year), but they are also more committed to the market, with 108 of them involved in 2 or more deals, and 22 very active in five or more deals.

See more below and download the full report here!