African startup ecosystem had a remarkable and successful year in 2017. The sector attracted the attention of prominent personalities such as Bill Gates and Mark Zuckerberg who focused their attention on encouraging the African startup ecosystem. Such moves opened up inroads for greater access to scalability and investments. Africa is now the home of many upcoming startups with various opportunities, and it is rapidly evolving to be amongst the vibrant tech homes.
A total of 201 African startups received risk capital worth $167.7 million between January and December 2017. This was an increased growth of 28% compared to 2016 and also increased the number of startups that received funding which rose by 32% in the same year. Apart from that, there was the launch of many new foreign accelerators and incubators in 2017 like MEST and Startupbootcamp. Many other funds similar to Omidyar Network, 500 startups and others came up. Foreign governments collectively injected an investment of $90 million to Africa with initiatives like French-African Fund and CoCreate SA of Netherlands. All these development are expected to take the startup ecosystem in Africa to greater heights in the coming days.
South Africa had a total of 74 startups that received funding in 2017 making it the country with the highest number of funded startups in that year. Kenya became second with a total of 46 funded startups and Nigeria came at the third position with 34 funded startups. The three countries collectively had 77% of the funded startups making them receive the highest value of the funding which was a replica of what happened two years back. Moreover, South Africa received the highest funding which was $39.60 million. Kenya was the second with $31.4 million channeled into its startup’s ecosystem, and Nigeria received $24.2 million. Andela which is a coder training startup received special attention after solely by raising $40 million.
Fintech sector has again topped the charts for receiving the highest investors where it gives 47 deals to its credit. The industry received a total of $30.68 million which was 18% of the total funding in 2017. Nigerian based Flutterwave got $10 million out of the $30.68 million that fintech sector received in 2017 making it the highest beneficiary in that sector. Yoco co-founder Lungidsa Matshoba said that African fintech focuses much on coming up with access rather than replacing the old ways with the new ones. He added that currently the green field still possesses the hugest opportunities though it stands to change in the coming future. Cleantech took the second position as the second highest beneficiaries receiving $18.1 million across 19 deals. Edu-tech came third followed by Health tech industries that received 17 and 12 deals in that order.
Seed stage investment become number one in another year registering a total of 72 deals. Venture Capital becomes second, and Grands closed the third sport of the most favored types of investment registering 35 and 34 total number of deals in that order. Nigerian based Tizeti an internet service company was the highest beneficiary getting an investment worth $2.1 million followed by Al startup Elves from Egypt which got $2 million. Andrea Bohmert from Knife Capital said that Venture Capital is being recognized as the main player in driving innovation, the creation of employment and growth. Bohmet added that people should expect a rise in investment activities.
Most of the significant changes in the ecosystem took place in 2017. African startup ecosystem will start enjoying the hard fought success in 2018. Many entrepreneurs in the continent are working hard to narrow the wide gaps in their respective markets focusing on building gazelle-style ventures rather than applications. Corporates are increasingly focusing more on the potential and innovation of the SME sector. Governments will soon start to acknowledge the importance of entrepreneurship and act on it rather than just talking about it. We also share the sentiments’ of Andrea Bohmet that 2018 will be a successful year for the African startup ecosystem. 4Di Capital, Algebra Venture, Omidyar Network, Kalon Venture Partners, Chandaria Industries, and Knife Capital were some of the names that left a mark in 2017 for working out some notable deals.
Enablers play a vital role in any successful ecosystem globally. There central roles come in supporting startups with training, skill development and mentorship. In 2017 Startupbootcamp increased its operations in Africa and accelerated almost 142 startups globally. South African based COCreate invited startups for the second edition of its program which offers startups in SA a chance to work with outstanding Dutch scale-up. According to Startupbootcamp’s co-founder and chief investment officer Zachariah Geoarge, Startupbootcamp is the first accelerator program driven mentorship and backed by multi-corporate in Africa. He added that the program has leaved to its expectations that corporates and startups can successfully partner in the innovation field. It has done that by working out 32 commercial agreements with corporate partners. The year only gives African startup ecosystem hope that a successful future lies ahead.