Africa tech investment holds steady in 2020, despite Covid-19

Funding for African tech startups continued to flow in 2020 despite pressures from Covid-19, dashing fears that the pandemic would ravage investment, new report finds.


Image : Paystack

African startups received $2.44bn in investment in 2020 – only around $100m less than the year before without Covid-19, according to a new report by Briter Bridges

Using data from more than 70 investors, ‘Africa’s Investment Report 2020’ recorded 1,075 deals compared to 1,119 in 2019.

The most funded sectors were fintech (33%) and cleantech (22%) – an umbrella term that encompasses green, sustainable and environmentally friendly technologies.  

This was followed by health (9%), agriculture (7%) and data & analytics (7%). 

As the economic devastation wrought by the pandemic ran rampant worldwide, the United Nations Economic Commission for Africa (Uneca) warned that the impact on remittances and tourism would hit FDI flows and result in capital flight and a slow-down in investment.

But the latest figures put to bed concerns that the pandemic would see investors withhold capital and funds dry up.

On the contrary, there were some huge deals in 2020 and a string of high-profile acquisitions especially in tech and agricultural sectors.

Payments platforms, often boosted by government-mandated moves toward digital spending, witnessed a flurry of activity.

US fintech Stripe acquired Nigeria’s Paystack for over $200m. While UK-based payments company Network International bought Kenya’s DPO Group for $288m and African-inspired WorldRemit acquired remittances company Send Wave for $500m.

The value of the disclosed M&A market was at least $1.12bn in 2020, the report says.

In terms of successful rounds, Estonian ride-hailing app Bolt raised $182m to expand its services in Europe and Africa.

Kenya’s food-distribution startup Twiga Foods raised $30m in a Series B round led by Goldman Sachs.

Egypt-based health-tech Veezeta raised $40m from several Gulf funds to expand its services in the MENA region.

The total value raised during all rounds came to $1.07bn with an extra $243m in undisclosed deals.

All the rounds over $100m involved foreign companies investing in Africa.

Though deals took a nosedive at the onset of the pandemic in March, they recovered in July and August, tailing off again towards the end of the year.

The report found that there were more than 1800 co-founders involved in raising money, of which 85% were male and 15% female.

The most funded products were in solar energy, data and analytics, PAYG, payments, transfer and remittances, financial API, telemedicine, supply chain management, insurance and digital banking. 

For the latest updates on Africa’s tech landscape, sign up to the African Business’ tech newsletter, Tech54, in partnership with Briter Bridges, here

Want to continue reading? Subscribe today.

You've read all your free articles for this month! Subscribe now to enjoy full access to our content.

Digital Monthly

£8.00 / month

Receive full unlimited access to our articles, opinions, podcasts and more.

Digital Yearly

£70.00 / year

Our best value offer - save £26 and gain access to all of our digital content for an entire year!