Individual ecosystems such as those in Cape Town, Lagos or Nairobi may steal a lot of the limelight, but the African tech startup sector as a whole is growing at pace.
Here are Disrupt Africa’s five biggest developments of the last 12 months.
African startups break funding barriers
Every year, our annual funding report finds the amount of investment heading into the continent’s tech ecosystem is on the rise, and 2019 was another record year. One of the most exciting aspects of this growth was the amount of startups raising mega-rounds, of US$10 million, US$20 million, US$30 million. Think Migo, Copia, Lori, Kobo360, Twiga, BitPesa, Swvl… These startups are breaking down funding barriers.
Funding is also trickling down into other markets, including some big rounds like this. Lots of angel networks are launching, there are big new funds like that launched by Seedstars, and “funds of funds” are also in vogue, like this, and this, and the SA SME Fund. Investment is growing exponentially.
The Chinese are coming
Chinese investment in Africa has been a hot topic for a while now, but it has largely skipped the tech space. That changed in 2019. Mobile manufacturer Transsion Holdings, a market leader in Africa, partnered Kenya’s Wapi Capital to launch a fund for early-stage fintech startups on the continent. Jack Ma handed out the first Netpreneur Prize. OPay raised big bucks from China. This is the start of what is likely to be a big trend.
It is not just the Chinese that are investing in Africa. There is also increasing evidence that the Scandinavians are also coming! The likes of Katapult, Antler and Norrsken are all upping their investments on the continent.
Startup legislation is becoming a trend
Senegal recently became the second African country to pass a Startup Act, after Tunisia. The first specific startup law globally was passed in Italy in 2012, and Africa is increasingly catching on. A host of countries, with Mali also at an advanced stage, are working towards Startup Acts, with Jon Stever, co-founder and managing director of Impact Hub Kigali and catalyst at i4Policy, saying at least 10 African ecosystems are working on putting such laws together.
Africa’s “mega incubator”
We’ve mentioned it within localised Kenya and Nigeria wrap-ups in the last few days, but the acquisition of the Nairobi iHub by the Lagos-based Co-Creation Hub (CcHub), creating an African “mega incubator” was indisputably one of the stories of the year. We dug deep into the deal here, and reported on how the expansion of CcHub across Africa will see an associated widening in the remit of its Growth Capital fund.
A Francophone-focused accelerator run by the World Bank
Francophone African startup ecosystems have been relatively starved of funding and attention compared to their Anglophone counterparts, but this is starting to change. One sign of this was the implementation by the World Bank Group of L’Afrique Excelle, the Francophone edition of the XL Africa accelerator it implemented in 2017.
Twenty tech startups were selected to participate in the programme, taking part in residencies in France and Mali, and also receiving access to funding, networks, mentoring and a community of like-minded entrepreneurs.