An ode to Africa’s startup ecosystem – thriving in spite of a challenging year


When the COVID-19 crisis hit Africa earlier this year, and countries went into varying degrees of lockdown, the prognosis for the continent’s early-stage startup ecosystem was not good.

Funding in particular was meant to take a serious hit, and there were fears for the survival of many of the continent’s most exciting young businesses. Startups were advised to raise cash by any means necessary, show organisational agility, and adapt their businesses in order to mitigate the effects of COVID-19.

Yet, for the most part, the catastrophe many predicted would be visited on the ecosystem has been avoided. Longer-term damage may yet become apparent, but Africa’s startups have proven their resilience in the face of the first great crisis faced by the space.

Some startups were of course seriously impacted, such as SafeBoda, iROKO and Yoco, but many others adjusted or added to their offerings in order to survive, or even benefit from, COVID-19 and its repercussions (see here, here and here).

Indeed, there were even examples of startups seeing such strong growth as a result of pandemic-occasioned pivots and partnerships that they ended up getting acquired!

Sector-wise, some areas suffered big style from COVID-19, co-working and entertainment key among them. Others, however, such as ed-tech and e-health, boomed, seeing sudden uptake and making leaps forward founders could never have imagined just a year ago.

From a funding perspective, Disrupt Africa figures show that, in spite of the pandemic, 2020 will go down as a record year from an investment perspective on the continent. Stay tuned for next month’s release of the African Tech Startups Funding Report 2020 (it’s free!) for the exact numbers, but it has proven a bumper year.

Investment could yet take a hit in 2021, as fundraising for new funds may well have been delayed by COVID-19. But for now, it is at least crisis deferred.

From an ecosystem perspective, African tech came together to ensure there was enough support for entrepreneurs facing challenges as a result of COVID-19. The ecosystem reacted with new funds and initiatives to support startups through the crisis, as well as encourage entrepreneurs to develop solutions to mitigate the impact of the pandemic (see here, here, here, and here).

The picture is not universally rosy. Some startups were of course forced to close as a result of the pandemic. Others will have failed to launch as planned. Funding, though remaining strong for now, may yet dry up a little. The COVID-19 crisis is not yet over, and there are many hurdles still not overcome.

But in the face of its first major challenge, Africa’s burgeoning tech startup ecosystem refused to wither and die. Instead it united, adjusted, fought, and even thrived. Startups set funding records even in a year of global pandemic. Local investors and ecosystem support organisations plugged vital gaps in terms of cash and other types of backing. Entrepreneurs built solutions that helped in the fight against COVID-19.

Next year may yet prove just as challenging. But over the course of an at times nightmarish 2020, Africa’s startup ecosystem proved it has the stuff to survive the economic impact of COVID-19 and prosper in a post-pandemic reality.


About Author

Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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