African startup funding is heading to more destinations, but “big four” still collects lion’s share


Startups from more African countries than ever before secured funding in a record-breaking 2020 that saw a combined US$701 million raised across the continent, but the “big four” of Kenya, Nigeria, South Africa and Egypt still collect the lion’s share of the capital.

That is according to the just-released African Tech Startups Funding Report 2020, open-sourced and made available to all, for free, by Disrupt Africa in partnership with Catalyst Fund, RTB House, Quona Capital, 4Di Capital, Villgro Africa, Lateral Capital, and Otundi Ventures.

The report, which was the first of its kind upon its inaugural publication in 2016 and is now on its sixth edition, tracks investment into the continent’s startup space, and highlights growth in funding for African tech ventures. The latest edition details an impressive 2020, which saw new records set. 

In all, 397 startups raised an impressive US$701,460,565 in total funding. Both of these figures represent significant increases on 2019 – the number of funded startups is up 27.7 per cent on 2019, and the funding total is 42.7 per cent higher.

The lion’s share for the “big four”

While as recently as 2017, we talked of a “big three” African tech investments destinations in the form of South Africa, Kenya and Nigeria, the emergence of Egypt over the last few years means there is now undeniably a “big four” when it comes to startup funding on the continent.

A total of 307 startups from South Africa, Kenya, Nigeria and Egypt raised funding in 2020, accounting for 77.3 per cent of the 397 funded ventures. Together, they raised a combined US$625,659,000, accounting for 89.2 per cent of the pan-African tally.

For the second year running, Kenyan startups raised a record amount of funding in 2020, securing a combined total of US$191,381,000. Accounting for 27.3 per cent of the continent’s total investment, this is the largest amount of funding ever achieved by a single country. It was, however, raised by relatively “few” ventures – with 59 Kenyan startups responsible for the investment total.

Home to the most funded startups and attracting the second largest amount of investment was Nigeria. The year saw 85 Nigerian startups – up 77 per cent on 2019 – raise a combined US$150,358,000 – accounting for 21.4 per cent of the total. South Africa, meanwhile, ranked third according to both metrics, with 81 startups raising a combined US$142,523,000. Though minimal growth in terms of startup numbers, the total funding figure almost doubled 2019’s tally.

And the (relatively”) new kid on the block, Egypt, saw 82 startups secure investment over the course of the year. This was actually a slight decline on 2019, when the number of funded ventures had increased by 159 per cent on 2018 figures. It was nonetheless a number second only to Nigeria, and one that means the number of funded Egyptian startups has grown by 1,540 per cent since just five secured investment in 2015.

The US$141,397,000 combined investment taken in by Egypt’s 82 startups was up 65 per cent on US$85,614,000 in 2019. Though Egypt slipped behind South Africa into fourth place in 2020, its proportion of total investment raised by African startups increased to 20.2 per cent from 17.4 per cent in 2019.

Progress elsewhere

The fact that the majority of funded African ventures in 2020 heralded from just four countries does not mean there was not heightened levels of activity elsewhere. Indeed, the top four’s share of the 397 African startups that raised funding in 2020 has in fact fallen quite significantly, to 77.3 per cent from 83.6 per cent in 2019, as more startups than ever before from outside these leading markets are securing backing.

In 2020, startups secured investment in 24 countries, a sizeable leap on previous years. In 2019, there were funded companies in 19 countries, while there were 20 in 2018 and 18 in 2017.

Ghana, as ever, was best of the rest, ranking as Africa’s fifth most active market for yet another year (2016, 2018, 2019 and 2020) for both the number of funded startups, and the amount of funding raised. Tunisia’s startup funding outlook has made marked progress in 2020, with 14 startups raising investment, though those companies raised only US$3,883,000.

Uganda had a mixed year in 2020, falling out of the top six markets on the continent, although the number of startups to gain backing in the country more than doubled to 13, while Morocco also performed positively. Ten startups from the North Africa country raised US$10,306,000 in 2020, whereas it had barely registered in 2019.

Ivory Coast, Senegal, Ethiopia, Zambia, Rwanda, Mali, Tanzania and Cameroon also saw signs of progress in one respect or other, while Madagascar appeared on the list for the first time, with two startups securing a combined US$600,000. The data also recorded rounds in Algeria, Benin, Chad, the Democratic Republic of Congo (DRC), Mauritius, Sierra Leone, and Zimbabwe.

Meanwhile, across the whole of Africa, Disrupt Africa recorded 110 fundraising rounds of US$1 million or over. This is a great achievement and shows extraordinary growth over the past six years – 354.2 per cent growth from 2015 to 2020. 

Capital itself is focused on Africa’s leading startup ecosystems

Signs of development, then, in “less developed” startup ecosystems on the continent from a funding perspective, with more individual companies raising money in these markets. Yet capital itself is increasingly drawn to the “big four”, a circumstance that is only being made more likely by the COVID-19 pandemic.

The total amount of investment that went into startups from South Africa, Kenya, Nigeria and Egypt, US$625,659,000, was 89.2 per cent of the overall African tally, a share that was actually an increase on 87.5 per cent in 2019 and 79.4 per cent in 2018.

So while investors are increasingly taking punts on startups in less developed startup ecosystems, those investing at bigger ticket sizes are continuing to focus on the “big four”, and in fact this is a trend that is only increasing over time.

In 2020, it could have been exacerbated by COVID-19 – as funds with cash to disburse choose to invest larger amounts in fewer, more established, ventures from more developed ecosystems in order to mitigate risk. We shall have to wait and see what 2021 has in store on this front, but it is a trend that had been heading in one direction for some time pre-pandemic, so a reversal may yet be a few years off.

For more information, or to download the report, please visit, or email Gabriella on [email protected], or Tom on [email protected].


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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