African Tech Startups Raised A Record $1.34B In 2019

African Tech Startups Raised A Record $1.34B In 2019

Interswitch African tech startups

Interswitch African tech startups
African tech startups raised a combined $1.34 billion in investments across 427 deals in 2019. Nigerian and Kenyan startups raised the most funding. Mitchell Elegbe is the CEO of Nigerian fintech firm Interswitch. Image supplied by eClat Healthcare

Africa’s tech startup ecosystem continues to push the limits of raising venture capital as 2019 turned out to be another record year for startups in Africa.

However, South African tech startups had an unexpectedly poor year in terms of funding based on recent history, despite being third among African countries with the most startup investments raised in 2019, according to Weetracker’s African Venture Capital Report 2019.

The year saw South African startups, which traditionally top African tech startup rankings in terms of value and number of funding deals, bringing in $67.3 million compared to a record of $241.1 million in 2018. 

Keet van Zyl, co-founder and partner at South African VC firm Knife Capital, believes that the lack of hype in the South African tech ecosystem could have contributed to a less than stellar year compared to Nigeria and Kenya.

“Other regions perhaps have enhanced hype attached to it where investors take a more risk-based approach to investing while South African investors are slightly more risk-averse, focusing on growth and business fundamentals to deploy bigger check sizes,” Van Zyl said.

African tech startups raised a combined $1.34 billion in investments across 427 deals, according to Weetracker’s report.

That represents an 84.7-percent growth on the stats from the previous year.

Tech startups in Africa raised $725.6 million in 458 deals during 2018 based on Weetracker’s 2018 reporting.

Nigerian startups stood out in 2019, raising around $663 million as the country netted the most capital, Quartz reported.

Lagos-based Payments platform OPay’s $170 million over two rounds was the largest investment for any Nigerian company.

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Kenya startups also had a bumper year, bagging $428.9 million in investments during 2019. Interswitch’s $170 million investment stood out as the biggest of the Kenyan startup funding rounds.

Fintech was the most popular sector for the fifth year in a row with startups netting $678.7 million in 2019, according to Weetracker.