Nigeria and Kenya were the top destinations for tech funding in Africa but other countries are catching up in another record year for deals. Tom Minney reports
African tech startup firms received over $2bn in equity funding in 250 deals in 2019, with the amount up 74% compared to 2018, says a report by investment platform Partech Partners. The overall total in other reports is smaller but the trends are similar, with Nigeria and Kenya dominating the funding.
The Partech report breaks down the funding into various stages, Series A, Series B and growth funding, and includes a total for deals where amounts were not disclosed publicly.
A similar report by media company Weetracker puts the total venture capital equity and debt invested at $1.34bn across 20 industries, in 427 deals. Nigeria attracted $663m and funding to Kenyan ventures grew by 284% to $429m. Fintech attracted $679m of the funding.
Most of the investment goes into fintech firms building applications and financial services infrastructure. Other countries among the top five destinations in the reports are South Africa and Egypt. Four or five years behind in developing their tech infrastructure and attracting funding are Senegal, Côte d’Ivoire, Ghana, Tanzania and Uganda. There are rising numbers of investors doing repeat deals in Africa and some 20 new Africa-focused investment funds were launched in 2019, according to reports. Investors include Silicon Valley investors and global financial giants.
Chinese investors are catching up with US investors. Chinese investors were dominant forces during 2019, when over $210m was invested into the Nigerian mobile money providers OPay (above) and PalmPay.