As of October 31, a total of 73 start-ups have secured at least $1 million each in funding and $699 million in total, according to data provided by Maxime Bayenof GreenTecCapital, a research firm that tracks Venture Capital deals across Africa.
Start-ups in Kenya, Nigeria, South Africa, and Egypt take the shine claiming about 73 per cent of deals that are worth over $1 million, and also, accounting for about 71 per cent of the funding from those deals.
This shows the domineering power of these countries as they continue to dominate Africa’s start-up scene—though not to the extent they did last year. In 2018, Kenya, Nigeria, and South Africa alone claimed 78 per cent of venture capital funding on the continent.
The year 2019 has also seen innovation hubs—incubators, co-working spaces, and other institutions that support entrepreneurs—multiply and mature. The Global System for Mobile Communications Association (GSMA) counts 643 African tech hubs, up more than 40 per cent from last year.
Besides overseas venture capital and private equity, foreign corporations and governments also invest in African start-ups. Goldman Sachs has led fundraising for two African start-ups this year: a $30 million round for Kenya’s Twiga Foods and a $10 million round for Nigeria’s Kobo360. France has pledged to invest $2.8 billion in African entrepreneurs by 2022.
The Dakar Angels Network, Lagos Angels Network, Benin Business Angels Network, and Africa Business Angels Network were all founded in the last decade.
Fintech’s success in raising capital reflects these platforms’ importance. While fintech continues to lead in deals in 2019, there are signs that funders are seeking more diverse investments. Just 28 per cent of funding from deals over $1 million went to fintech, and the year’s only $100 million deal went to education software start-up Andela.