AfricArena releases its second annual State of Tech innovation in Africa

You can now download the AfricArena State of Tech in Africa 2021

AfricArena report

The release of the second AfricArena report was preceded by a very insightful panel discussion featuring experts from EchoVC, World Bank, International Trade Centre, Microsoft, and Naspers.

The report captures discrepancies in data collection of deals, reasons behind East Africa’s high valuation, due diligence criteria applied during lockdowns, merits behind the rise of early-stage startups, why we can anticipate more unicorns from Nigeria, and the rise of corporate open innovation in  Africa’s tech ecosystem.


Nigeria remains Africa’s top-performing market but still fails to appear among the top five spots when it comes to the number of incorporated startups by country, attributed mainly to its low “ease of doing business” score. More Nigerian startups prefer to incorporate outside the country. Kenya, a top destination for expats takes the second spot, yet leads Africa with the highest per-capita VC investment in 2020. Kenyan startups prefer to seek capital within their incorporation. Markets across Southern Africa are also attracting investment due to their low valuations, while the Egyptian market keeps gaining investor traction from its demographic size.

Investment ecosystems

East Africa shows high viability in ease of access to foreign investors as more countries adopt favorable legal frameworks such as ‘Startup Acts’. West Africa, predominantly Nigeria, is favored by its demographics but adversely affected by its unfavorable investor climate. The South African ecosystem struggles to attract foreign investment as it doesn’t favor foreign domiciled startups that find it hard to locally source funds. Nevertheless, AfricArena sets an ambitious prediction on VC deals in 2021 at $2.25 and $2.8 billion. 

Deals by sectors

60% of all deals narrowed down to the sectors of Agritech, fintech, healthtech, and energy. It’s worth pointing out that the energy sector was more attractive to impact investors as opposed to the traditional VC investors.

You can download the AfricArena State of Tech in Africa 2021 report here.

AfricArena was launched in Cape Town, South Africa in 2017, and supports the creation of market access and investment opportunities to its growing community of founders, incubators, angel investors, accelerators, and venture capital investors.


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