Nigeria, Kenya, Egypt and South Africa have led the African technology startup ecosystem which in the first half of 2018 attracted $168.6 million spread across 118 deals, outstripping the 2017 annual funding mark of $167.7 million.
According to the African Startup and Venture Capitalist Ecosystem Report for the first six months of 2018 authored by Weetracker Media Incorporated, Nigeria recorded 31 deals followed by Kenya, Egypt and South Africa with 23, 21 and 19 deals respectively.
Although Nigeria managed a higher number of deals, it could only attract $29.41 million, while Kenya with lesser deals amassed $82.86 million, almost three times the number of funding received by Nigeria.
The report notes that fintechs cling to the top, being the highest funded sector as well as securing the highest number of deals. Fintechs cornered 25 deals with nine of them coming out of Nigeria, while six were based out of South Africa. The sector has attracted a total of $95 million. This is followed by Healthtech, Agritech and Ecommerce with 13, 10 and nine deals respectively. Meanwhile, startups raising $1 million and above were 28 in number.
According to the study, 15 funds, accelerators and incubators were launched this year attracting $409.93 million; 15 mergers and acquisitions were observed out of which 13 deals were acquisitions; grants wrest top spot, seed stage remains investors preference while Series A deals have plummeted compared to the first half of 2017. The most prominent deal remains the $47 million Series C funding of Cellulant, a digital payments provider.
Next in the string is Branch International, a microlending platform that bagged $20 million venture money in addition to $50 million debt money. The two have cornered a major chunk of 39.88 per cent of the gross deal value. The investment amount also represents a massive jump of 3.5 times in amount invested from the first half of 2017 that closed with only 47.23 million of funding being poured into 72 deals.
The public and private sectors have been actively bestowing grants and prize money onto 27 startups to encourage the entrepreneurial ecosystem. GSMA ecosystem accelerator and ICT drive by POTRAZ merit recognition here.
Zachariah George, managing partner, StartupBootCamp Africa said “based on our Fast Track tour across 19 cities in Africa, we’ve seen a growing trend in Nigeria, Ghana, Kenya and Uganda where entrepreneurs are focusing on Fintech, Ecommerce, Agritech and Healthtech. There is a rear breed of entrepreneurs spread across Africa but if I have to choose one geography, it would be Nigeria.”
The first two quarters of 2018 saw the launch of 11 incubators and accelerators. South Africa followed by Nigeria had the maximum of these facilities being opened up. Four of these labs had a focus on skill development of aspiring and early-stage entrepreneurs. Also, the World Bank gave Nigeria $3 million to establish six tech hubs across the country.
