Between 2014 and 2019, 613 venture capital (VC) deals were reported in Africa with a total value of US$3.9 billion, according to a report released by the African Private Equity and Venture Capital Association (AVCA).
AVCA, the pan-African industry association which promotes and enables private investment in Africa, has published its inaugural report, which tracks African VC deals and investor profiles.
Entitled “Venture Capital in Africa: Mapping Africa’s Startup Investment Landscape”, the report analyses the exponential growth of VC in Africa over the 2014-2019 period, focusing on deal trends.
It finds that between 2014 and 2019, 613 VC deals were reported in Africa with a total value of US$3.9 billion. 2019 marked a six-year high in VC activity with 139 deals worth US$1.4 billion – the highest year on record. The number of deals more than doubled between 2014 and 2019, while the value of deals almost doubled between 2018 and 2019.
Fintech and IT dominated the African startup scene, with each sector accounting for 19 per cent of the total volume of VC deals reported on the continent between 2014 and 2019, followed by consumer discretionary (18%) and industrials (12%). Communications services, healthcare and consumer staples collectively account for 19 per cent of the volume of VC deals over the same period.
Southern Africa attracted the highest volume of VC deals (25%), followed by East Africa (23%) and West Africa (21%), while multi-region deals attracted the largest share by value. Multi-region deals had the largest median deal size at US$7.5 million, followed by West Africa and East Africa at US$3 million and US$2.2 million, respectively.
South Africa’s VC ecosystem accounted for 21 per cent of deals between 2014 and 2019, closely followed by Kenya (18%) and Nigeria (14%). Over a fifth (21%) of the total number of VC deals over this period were in companies headquartered outside of Africa raising capital to expand or strengthen their presence on the continent.
While seed funding accounted for nearly a third of the total number of deals reported in Africa between 2014 and 2019, these transactions accounted for only 5 per cent of the total deal value. Series A and Series B deals together accounted for 29 per cent of the total deal volume and 38 per cent of the total value of early stage deals.
“Africa’s VC industry continues to grow from strength to strength and we expect 2020 to be another strong year despite global macroeconomic headwinds. The continent’s VC ecosystem showcases the best of African innovation and entrepreneurship, which has the potential to be a key source of solutions to Africa’s intractable problems and a gamechanger for the continent’s development trajectory. AVCA remains committed to supporting the VC industry by charting its growth and providing authoritative research on the asset’s fundraising, deal, and exit activities,” said ‘Tokunboh Ishmael, chair of the AVCA Board.