6 Major Themes From The African Tech Scene In 2018

6 Major Themes From The African Tech Scene In 2018

It has been another busy year in the African tech scene, which has seen a huge influx of global players and investment as the opportunities afforded by its growth become more evident.

From South Africa to Egypt, Ghana to Kenya, local innovation is leading to social and economic improvements for Africa, and the emergence of the continent as a consumer of technology has attracted interest from every corner of the world. It has become clear that tech can play a huge role in solving major problems.

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From multinationals like Google and Facebook to the smallest startup affecting change in their own country, African tech is taking off. Here are six of the major themes from another bumper year of technological development on the continent.

African tech is raising serious funding

More than $200 million has been raised, making 2018 the best year on record for African tech startup funding. The impact of fintech means companies in this space have been the most attractive to investors in 2018.

Fintech companies raised huge funding rounds over the course of the year, such as Jumo, which raised more than $60 million, and Cellulant, which secured $47.5 million. But investment is also flooding in for companies in other industries. Egyptian ridesharing startup Swvl raised two funding rounds, the first of which and smaller of the two was disclosed as $8 million. Kenyan agri-tech company Twiga Foods raised a $10 million Series B investment, and Nigerian logistics startup Kobo360 also secured bumper rounds, one being a recent $6 million investment.

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Major players up their game

Gone are the days when Africa barely registered in the minds of executives at global tech firms. Nowadays, the continent’s burgeoning reputation as the final frontier for customer acquisition, and the potential impact to be affected on the continent, has multinationals scrambling for a piece of the action.

Google, for example, has been very active, holding its first Google for Kenya event, where it promised various products and services, announced it would train 100,000 farmers in digital skills, and launched a dedicated travel mode for motorcycles. It plans to grant 10,000 African developers access to Android and Mobile web courses, established an artificial intelligence research center in the Ghana, graduated startups from the first two editions of its Launchpad Accelerator Africa, and launched its Partners program in Nigeria, where it has focused a great deal of its energy.

African tech scene
Google is one of the major global tech firms that focused on Africa this year. Image – AP Photo – Mark Lennihan

Other busy companies include Facebook, which among other things launched its third-party fact checking initiative in Kenya, Nigeria, and South Africa, Amazon Web Services, which is to open data centers in South Africa, Alibaba, which is helping Rwanda to become the first African country to establish an electronic world trade platform, and Spotify, which is launching in Egypt, Tunisia, Morocco, and Algeria.

Taxi app wars rage on

Uber and Taxify spent the year battling for market share across Africa, going head to head in new geographies and with new product launches. This fight looks set to continue well into 2019, with customers expected to benefit in terms of access to services and price.

Uber launched its ride-hailing service for motorbike taxis in Kenya and Uganda. So did Taxify. Uber launched its UberEATS solution in new markets. Taxify launched its own food ordering service. Uber launched uberCHAPCHAP in Kenya. Taxify expanded in South Africa, with launches in Plettenberg Bay, Knysna, George, and Mossel Bay.

The eventual winner of this battle of the taxi apps is something to keep an eye on for the year ahead.

Internet provision

Major steps forward have been taken over the last few years, but too many Africans remain disconnected from the internet, due to lack of reach or high costs. Some firms spent 2018 trying to address that.

Google parent company Alphabet is rolling out its Loon project, which will provide balloon-powered internet, in Kenya after finally getting regulatory approval. To do so, it is partnering with Kenya’s third largest telecoms firm, Telkom.

This is not the only large-scale initiative which will hopefully play a huge role in getting more people online. In July, Liquid Telecom signed an agreement with Telecom Egypt to build a terrestrial fibre network from Cape Town to Cairo.

Governments stifling online freedoms

More people are getting online, but governments across Africa are wary of the additional freedoms this offers and keen to tax online services, often to the detriment of access and freedom of speech. That made 2018 a big year for curtailing online freedoms.

In May, Uganda imposed a tax on social media and mobile money, a move copied in Kenya and Zimbabwe. Tanzania started shutting down blogs for not paying newly-established licence fees, while a host of governments – Algeria, the DRC and South Sudan among them – at various points shut off the internet altogether.

This has become a concerning trend, which hopefully does not continue into 2019.

Fintech on the up

One of the major things Africans need the internet for is financial services, such as mobile money, which have become a target for tax-hungry governments. Fintech is spreading rapidly across Africa, bringing more people into the formal financial system than ever before.

Safaricom’s M-Pesa is Africa’s flagship fintech service, and it had a great 2018. It signed a deal with U.S.-based Western Union to launch M-Pesa Global, and also partnered with Silicon Valley mobile-money giant PayPal. Beyond the famous mobile money service, solutions are helping Africans send, receive, save and borrow money more cheaply and easily than ever before, and the potential impact is massive.

The future of the African tech space looks bright as local and international investors increasingly bet on significant future returns.

Tom Jackson is co-founder of Disrupt Africa, a news and research company focused on the African tech startup ecosystem.