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Two years in the past, the African tech ecosystem noticed newfound consideration from world gamers that translated to the continent’s very best yr of receiving undertaking capital. From various resources, it’s estimated as much as $2 billion went into African tech startups in 2019.

With high-profile visits from essentially the most well-known Jacks (Ma and Dorsey), a long-awaited first IPO by way of e-commerce large Jumia and big $100 million rounds, it was once an indication of items to return for African tech.

However two months into 2020, the pandemic did a very good process of reducing expectancies as funding actions from native and world traders bogged down.

It wasn’t a nasty yr, despite the fact that. African startups just about raised $1.five billion and noticed a few attention-grabbing exits: Stripe-Paystack and WorldRemit-Sendwave.

Getting into 2021, the bullishness of African tech stakeholders returned — and why no longer? As companies reopened globally and the pandemic drove other folks to undertake new conduct in e-commerce, paintings, spending cash, on-line supply, and finding out, undertaking capital into quite a lot of industries was once poised to extend immensely, and Africa would no longer be exempt.

Predictions have been made on how a lot the continent’s startups would lift in December. AfricArena, a tech ecosystem accelerator, pegged offers to near between $2.25 billion and $2.eight billion. Stephen Deng, the co-founder and spouse of DFS Lab, a company that invests in virtual trade startups, serially in comparison the 2016 Southeast Asia investment panorama to the place Africa may well be in 2021, at $Three billion.

Those predictions weren’t completely off the mark. After all, knowledge from the likes of Maxime Bayen and Briter Bridges made 2019 numbers seem like kid’s play. 2021 was once when African tech reached an inflection level and took heart degree as firms raised over $four billion (greater than they were given in 2019 and 2020 mixed).

From minting 5 unicorns to witnessing extra million-dollar raises by way of feminine CEOs, we highlight one of the occasions that formed this pivotal second in African tech.

What’s a document yr of investment with out some unicorns?

Reaching unicorn standing — a privately held corporate with a valuation of $1 billion — is unquestionably one of the vital vainest achievements for any startup, but it stays essentially the most coveted.

In Africa, the primary two unicorns have been Jumia (in 2016) and fintech large Interswitch (in 2019). As Jumia went public at the NYSE in 2019, it ceased to be a unicorn and was a normal billion-dollar publicly held corporate.

It’s a identical case with Egyptian bills corporate Fawry. It went public at the Egyptian inventory marketplace (the primary indigenous tech corporate to take action on African soil) in 2019. Alternatively, in contrast to Jumia, Fawry simplest reached a billion-dollar valuation a yr after going public. So, it isn’t and technically wasn’t a unicorn.

Interswitch was once the continent’s sole unicorn till 5 extra have been minted this yr. 4 are fintechs: Flutterwave, OPay, Wave and Chipper Money, whilst one is tech ability market Andela.

Flutterwave were given its horn in March at $1 billion; OPay in August at $2 billion; Wave and Andela the next month, at $1.7 billion and $1.five billion, respectively; Andela in September raised at a $1.five billion valuation; Chipper Money in November at $2 billion. In the meantime, Interswitch, the only real unicorn between 2019 and 2021, is value $1 billion.

A few causes are in the back of this surprising surge in unicorn numbers at the continent. Extra skilled founders exist and explicit markets, specifically within the Giant 4 (Nigeria, South Africa, Egypt and Kenya), display a mixture of matured however nonetheless open-for-disruption characteristics.

Additionally, sectors reminiscent of fintech stay opening up in tactics by no means noticed ahead of and there’s a hurry of international cash from first-time traders in early and later phases, concurrently.

World traders participated from pre-seed to Sequence E phases

Whilst world traders have up to now invested in African startups, their process gave the impression extra distinguished in 2021, most likely on account of their participation around the board.

For example, traders reminiscent of Berlin-based VC company Goal International and famend funding company and hedge fund Tiger International minimize assessments throughout early and enlargement phases.

Goal invested in each Sequence A rounds of Kuda and Mono (together with the Sequence B spherical of the previous). The Ecu VC additionally led the pre-seed rounds of Kippa and Edukoya. On the opposite hand, Tiger led Union54’s seed spherical, Mono’s Sequence A and later rounds in FairMoney and Flutterwave.

Different offers the place enlargement companies participated in early and enlargement phases integrated Sequoia in Telda’s pre-seed; Wave’s Sequence A, by way of stealthy wealth control fund Sequoia Heritage; and OPay’s Sequence C, by way of its subsidiary fund Sequoia Capital China.   

There was once additionally motion from different traders, reminiscent of Dragoneer, FTX, Constancy, SVB Capital and Sam Altman, who were given concerned in unmarried huge offers for the primary time. It was once regimen for different companies like Tencent because it invested within the enlargement rounds of uLesson, Ozow and TymeBank– and SoftBank, who, by way of its Imaginative and prescient Fund 2, led two of the continent’s many nine-figure rounds in 2021: unicorns Andela and OPay.

African startups raised extra $100M+ rounds this yr than ever ahead of

OPay had one of the vital 3 nine-figure offers in 2019 after elevating a $120 million Sequence B spherical. Others integrated Andela’s $100 million and Interswitch’s $200 million offers. So consider the wonder the next yr when no nine-figure deal happened (simply because the continent didn’t produce any unicorn).

The draught didn’t final lengthy, as Africa no longer simplest had its perfect unicorn yr but additionally recorded essentially the most nine-figure rounds (11 from 10 startups) in one yr.

Let’s get started with the unicorns: Flutterwave’s Sequence C was once $170 million; OPay raised a $400 million Sequence C; Wave and Andela every picked up $200 million. Then Chipper Money did the double: a $100 million Sequence C and a $150 million extension for its unicorn spherical months later.

Others come with TymeBank’s $180 million Sequence B, Jumo and MNT-Halan’s $120 million rounds, TradeDepot’s $110 million and MFS Africa’s $100 million.

The one non-fintech offers have been Andela and TradeDepot (despite the fact that the latter has an embedded finance play). Additionally, all however two offers have been only equity-based: TradeDepot and MFS Africa raised a mixture of fairness and debt.

A handful of native acquisitions and a huge go out

Virtual bills gateway MFS Africa is certainly one of Africa’s few company traders and acquirers. Over the last 5 years, the corporate has made strategic bets throughout lost sight of startup areas in Africa, making an investment in Julaya, Maviance and Numida. And when it comes to acquisitions, Beyonic and, maximum not too long ago, Baxi.

Remaining yr, the fad of seeing native firms purchase every different performed out and persisted into 2021. Some fascinating acquisitions come with TLcom-backed Kenyan shopper enjoy platform Ajua purchasing WayaWaya; Nigerian bus reserving and Techstars-backed Treepz increasing into Ghana and Ugabus upon getting Stabus and Ugabus; and Flutterwave creating a foray into the writer economic system area with the Disha acquisition.

Others come with Jiji’s acquisition of Vehicles45, Egypt’s B2B e-commerce platform MaxAB buying YC-backed Waystocap, thus increasing into Morocco, and Cheki promoting its companies in Kenya and Uganda to Nigeria’s Autochek.

Just like the MFS Africa-Baxi deal — which each events claimed to be the second-largest fintech acquisition in Africa after Stripe-Paystack — the opposite acquisitions indexed have been undisclosed

Why African startups don’t reveal their acquisition determine is a subject for some other day. In my opinion, reporting such offers might not be interesting going ahead (if they continue to be undisclosed) except they contain world growth performs. Living proof: Nigerian healthtech Helium Well being obtaining UAE’s Meddy (the primary of its type between sub-Saharan Africa and the GCC) and Australian BNPL participant Zip purchasing up South Africa’s PayFlex.

And world growth by way of acquisition will get extra thrilling when a determine is connected; as an example, information heart Equinix introduced that it might achieve Nigeria’s MainOne, for $320 million. The inside track was once the spotlight for this yr’s acquisition offers, no longer just for its measurement but additionally as a result of MainOne is a female-led corporate, with Funke Opeke as its CEO.

Extra female-led startups raised million-dollar rounds

Funke Opeke is likely one of the only a few founders to have come this some distance: operating an African tech corporate to the purpose of go out. She’s additionally most likely the one feminine founder at the continent to have raised 9 figures cumulatively for her industry.

Opeke’s enjoy is an outlier. In Africa and globally, investment doesn’t come simple for female-led firms. A record by way of Briter Bridges from the center of this yr checked out 1,100+ firms to have gained VC cash between 2013 and Would possibly 2021 (pegged at $20 million or much less).

According to the record, simplest 3% of the $1.7 billion raised inside of this era went to all-female founding groups in comparison to 76% for all-male groups.

So, it’s nice information when female-led startups lift one million bucks or extra in Africa. And it not directly contributes to how smartly the area plays, as we will attest to this yr which recorded greater than ten offers, signalling an development in VCs (each gender-focused and gender-agnostic) sourcing for female-led groups to spend money on.

The feminine-led startups that raised one million bucks or extra this yr come with Shuttlers, Bankly, Lami, Okra, Klasha, Akiba Virtual, Ejara, Kwara, Edukoya, Reelfruit and Jetstream.

Native traders — and founders — stepped up their recreation

Alitheia IDF is an investor in Reelfruit and Jetstream. The ladies-focused company, led by way of main companions Tokunboh Ishmael and Polo Leteka, is a $100 million non-public fairness fund for gender-diverse companies in Africa.

It’s additionally one of the vital native price range that raised massive sums of cash this yr to write down assessments for African startups throughout other phases. Others come with Ventures Platform, LoftyInc Capital, Voltron Capital and 4DX Ventures, all sub-Saharan-based VC companies with a pan-African technique.

Up north, traders reminiscent of Sawari Ventures and Algebra Ventures pulled their weight backing startups, specifically in Egypt, the place startup innovation and funding has taken off astronomically.

Native and Africa-focused traders additionally took up complete seed to Sequence A rounds of a few firms in sub-Saharan Africa (Appzone, Payhippo, to call a couple of), which infrequently took place in earlier years. Long term Africa, Kepple Africa, Release Africa, and others persisted with their tempo from 2020 and wrote many new and follow-on assessments this yr.

We even spotted how lively founders like Flutterwave CEO Olugbenga’ GB’ Agboola, Paystack founders Shola Akinlade and Ezra Olubi, and Chipper Money founders Ham Serunjogi and Maijid Moujaled took phase in some early-stage rounds too.

Nigeria was the unicorn capital; Egypt, a powerhouse

In November 2019, 3 fintech firms, Interswitch, OPay and PalmPay, raised a cumulative $360 million from American and Chinese language traders. That introduced Nigeria as Africa’s unofficial capital for fintech funding and virtual finance startups.

Fintech alternative in Nigeria is the most important at the continent. With over 40% of Nigerian adults having financial institution accounts and virtual bills hitting greater than $250 billion in 2019, it’s no wonder that the startups facilitating transactions for the unbanked (OPay) and offering gateways (Interswitch and Flutterwave) are actually value greater than $1 billion.

The 3 firms, together with Andela, began operations in Nigeria’s industrial town, Lagos, incomes Nigeria the standing of Africa’s unicorn capital in 2021.

For a very long time, Nigeria has been one of the vital 3 nations that obtain the majority of native and world undertaking capital, together with Kenya and South Africa. The 3 nations provide Africa’s maximum hooked up populace and rising economic system; the very best surroundings to draw international capital ahead of others.

However then Egypt stepped into the image in 2017, and with time, the North African nation was a part of the “Giant 4” as the rustic started attracting undertaking capital eyeballs. And after quietly spending the final couple of years on the rear, Egypt picked up impressively in 2020 and this yr surpassed Kenya to transform the area’s 3rd maximum lively funding area.

As this record aptly put: “Apparently from nowhere, Egypt is all of sudden at the radar as a key African startup investment vacation spot, highlighting the possibilities for continental enlargement of the nascent sector.”

Egypt additionally has bragging rights in generating the primary SPAC deal at the continent. In July, Cairo and Dubai-based ridesharing corporate Swvl introduced that it was once going public by way of a merger with Queen’s Gambit Enlargement Capital. It’s a deal that can price Swvl, one of the vital nation’s luck tales, at nearly $1.five billion as soon as finished.

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With a big inhabitants and ambitious GDP in line with capita, the North African nation raised nearly $600 million this yr. Whilst it’s not up to what Nigeria and South Africa raised at over $1.four billion and $830 million, respectively, some observers are expecting that Egypt will surpass South Africa by way of subsequent yr if it helps to keep up with its tempo.

There are a couple of causes in the back of this considering. In Nigeria, South Africa and Kenya, fintech is the sphere that receives essentially the most investment. The foremost sector is e-commerce and retail in Egypt, however the nation is a scorching spot for fintech, too, obtrusive in maintaining the perfect pre-seed rounds in each classes (Rabbit’s $11 million and Telda’s $five million rounds).

Once I wrote this piece previous this yr, the most important pre-seed spherical on the time was once Autochek’s $3.four million. Rabbit’s eight-figure pre-seed is 3 times that quantity. Resources not too long ago advised TechCrunch that some other Egyptian startup will shut a pre-seed spherical that top subsequent yr.

Mindblowing pre-seed investments like those are one of the vital many signs of the way rapid undertaking capital has picked up in Africa. The continent’s startups raised over $four billion this yr and minted 5 unicorns. No person is aware of what to anticipate in 2022, however there’s a nuanced sanguinity that we might see “extra of the whole lot” together with some IPOs (I may well be attaining right here) so brace yourselves.



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