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Rising African venture investment powers fintech, clean tech bets in 2020

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Image Credits: Nigel Sussman (opens in a new window)

As a turbulent week in the capital world, we’re taking a look at something a bit slower moving: venture capital trends in Africa during 2020.

The Exchange has long explored quarterly and yearly data regarding the North American, European and Asian venture capital markets, along with data on particular startup categories. From today, we’ll also provide regular examinations of what’s happening in Africa.

As an aside, we’re sorry The Exchange didn’t come out yesterday. The world went mad and we had to tend to breaking news. We’re back! 

To dig into African venture capital results, we’re looking at a report concerning 2020 data from Briter Bridges, a research group that focuses on the continent’s private capital market. The Exchange also interviewed report author and Briter director Dario Giuliani about the collected data.


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What emerges is a generally growing venture capital scene, but one that had mixed results in 2020 compared to 2019. However, if we control for an outsized investment or two, things smooth out rather nicely.

Let’s check the top-line figures, get insight from Giuliani concerning where the capital is flowing most rapidly, and wrap with a look at which startup categories are seeing the most investment in Africa today.

Africa’s 2020 venture capital results

During my time at Crunchbase News, I helped lead a team that generated acre-feet of reporting on the global and domestic venture capital markets. It’s difficult work that involves making decisions on what counts, what doesn’t and how to handle rounds that have not been disclosed publicly.

Over time, I’ve also become comfortable with venture data from PitchBook and CB Insights as well, and am now adding the Briter dataset to the trusted cohort.

During my chat with Giuliani, it became clear that his team is doing the hard and valuable work of carefully collating and sorting information. I say all of that simply to let you know that we now have a regular source for trustworthy information (compiled in concert with seventy different investing groups) on Africa that we’ll use regularly to keep tabs on the continent. This is a win.

So, what does the data say? We have to parse it some, as historically Briter has collated megadeals — which it counts as investments of $90 million or more — and M&A in the same bucket. So, tracking just the dollar volume of African deals smaller than $90 million gives us the following set of results:

  • 2016: $331 million ($759 million including megadeals and M&A).
  • 2017: $438 million ($638 million including megadeals and M&A).
  • 2018: $669 million ($980 million including megadeals and M&A).
  • 2019: $1.12 billion ($2.58 billion including megadeals and M&A).

Then there’s 2020, which was segmented in a slightly different manner. For 2020 Briter noted that there were no megarounds raised in Africa, so it has provided a non-mega-round number, an acquisition figure, and the value of a number of rounds that were not publicly disclosed.

Here’s what that looks like:

  • Dollar value of disclosed African 2020 rounds: $1.07 billion.
  • Dollar value of 2020 African startup M&A: $1.12 billion.
  • Dollar value of of 2020 “undisclosed funding” in African: $243 million.

Comparing aggregate 2020 figures to 2019 results, it appears that last year was a somewhat robust year for African startups, albeit one with fewer large rounds.

Zooming in to a per-month view, Africa-based startups raised the bulk of their 2020 capital in the second half of the year, though November and December results appear somewhat light. For Africa then, as for most of the world, Q3 2020 was a blistering venture capital period.

What is driving generally positive venture capital results for Africa in recent quarters? Giuliani told TechCrunch in a follow-up email that “investment in Africa is being driven on the one hand by a broadening base for early-stage ecosystem support organizations, including accelerators, seed funds, syndicates and angel investing,” and “consolidation,” which is aiding both “growth-stage deals and a burgeoning M&A market.”

What’s nice about that note is that there doesn’t appear to be any reason why it should slow, implying that the growth in investment activity that African startups have enjoyed in recent years could persist into 2021 and beyond.

Which startups raised the most? Per the report, fintech led the way with 31% of invested capital — and more than 90% of M&A activity in the year — followed by clean tech (22%), health tech (9%), agtech (7%), data and analytics startups (7%) and e-commerce (5%).

Where was capital most frequently deployed in Africa? According to Giuliani, the “countries constituting the so-called ‘Innovation Diamond,’ i.e., Kenya, South Africa, Nigeria and Egypt, remain the largest recipients of funding, as well as the most sophisticated ecosystem.” But he added there is a “new tier or generation of countries” that are seeing rising venture capital volumes, including “Morocco, Tunisia, Ghana, Uganda [and] Tanzania.”

Honestly, that’s pretty exciting. Aside from the Jumia IPO and Stripe buying Nigeria’s Paystack last year for several hundred million dollars, I’ve just not spent enough examining the continent’s startup activity. To know that there are that many countries with startups to look into is flat-out cool.

But not everything from Africa is up and to the right. It appears that similar issues regarding gender diversity are at play in the African startup realm as they are on other continents.

Briter notes that just 15% of founders, co-founders, or C-level execs in funded startups in 2020 were women. So, there’s work to be done yet for more gender parity amongst African startups, something that is true just about everywhere.

How VCs invested in Asia and Europe in 2020

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