- Funding Overview: Q3 Witnesses the Year’s Most Modest Funding
In September 2023, 22 African tech startups secured $116.7 million in funding over 22 fully disclosed rounds. This starkly contrasts the $243.7 million amassed in August 2023, marking a 52.11% decline.
On a YoY basis, there’s a notable downturn of approximately 69.6%. To put it in perspective, startups in Africa garnered $383.4 million in September 2022. Only March saw fewer funds this year, with startups receiving $66 million.
In its entirety, Q3 had African startups accumulating $492.6 million from 67 completely disclosed transactions. This trails behind Q2’s figures of $877 million and is considerably less than Q1’s impressive $1.3 billion. Till now, the funding amassed by African startups stands at $2.57 billion for the year.
Breaking it down regionally, startups from Southern Africa unexpectedly topped the charts by obtaining $69 million, constituting 59.1% of the total funds for September. This surge was primarily due to the energy-focused startup Wetility, which secured $48 million. West Africa followed with funds amounting to $26.1 million. East Africa and North Africa trailed with $20.2 million and $1.4 million respectively.”
For September 2023, the three leading sectors are as follows: The energy sector tops the list with $60 million, accounting for 51.41%, primarily driven by Wetility’s fundraising and SunCulture’s $12 million raise in Kenya. Fintech comes in second with an investment of $27.5 million, making up 23.56%, followed by retail/e-commerce garnering $11.6 million, 9.94%.
In recent transactions this month:
Wetility, an energy startup from South Africa, secured a combined debt and equity financing of $48 million.
SunCulture, an energy venture from Kenya, clinched a syndicated debt facility worth $12 million.
Complete Farmer, an agritech from Ghana, celebrated a pre-Series A funding of $10.4 million.
Lupiya, a Zambian fintech enterprise, raised a notable $8.25 million in its Series A funding round.
Lastly, Rentoza, a retail startup from South Africa, achieved a $6 million funding milestone.
In September, the Kenyan-based venture capital firm Enza Capital secured $58 million to back startups throughout Africa. Notably, Enza Capital is pioneering a unique shared ownership approach, offering startup founders an opportunity to possess a stake in the firm. To this end, they’ve designated 10% of their carry pool for these entrepreneurs.
Meanwhile, another venture capital entity, P1 Ventures, finalized a $25 million fund. They will focus on directing investments into African enterprises operating in fintech, SaaS, AI, and health tech.
- M&As Risevest Secures Chaka; WhoGoHost Takes Over SendChamp
The close of Q3 saw a couple of noteworthy mergers and acquisitions.
Early in the quarter, the Nigerian-based cloud infrastructure enterprise WhoGoHost finalized its acquisition of cloud communication firm SendChamp for an unspecified amount.
Toward the quarter’s end, Nigerian trading platform Risevest revealed its takeover of the digital trading venture Chaka, though the financial details remain undisclosed.
- Closures: 54gene Ceases Operations
In recent news, TechCabal validated that 54gene, a Nigerian genomics startup, is ceasing its operations. This confirmation came from its former CEO, Ron Chiarello.
Since its establishment in 2019, the startup garnered $54 million but faced hurdles, including frequent leadership reshuffles and unchecked expenditure patterns.
In a related development, the company’s founder and former CEO, Dr. Abasi Ene-Onong, unveiled a fresh genomics enterprise, Syndicate Bio, within the same timeframe.
- Sendy Enters Administration While PayDay Looks for Potential Purchasers
In September, the Kenyan logistics firm Sendy was in administration, with Peter Kahi appointed to oversee the enterprise while it navigated its financial turmoil.
The decision followed the startup’s inability to secure a purchaser despite incurring a staggering $1 million in monthly operational expenses.
Similarly, the Nigerian fintech entity PayDay revealed its intentions to find a buyer in the same month. After securing $3 million in funding in March 2023, the company confronted many obstacles, ranging from contentious decisions regarding salary hikes and impetuous managerial actions to problematic infrastructure.
- Economic Update: Kenya Becomes a PAPSS Member
Kenya marked its entry as the tenth member of the Pan-African Payments and Settlement System (PAPSS) in September.
Trade Secretary Moses Kuria unveiled this development, emphasizing that the Central Bank of Kenya (CBK) has duly endorsed the accord and fulfilled all requisite procedures.
With the collaboration of nine central banks, the platform has effectively spared African businesses a notable $5 billion in transaction fees.
- Workforce Adjustments: mPharma Dismisses 150 Employees
The tech sector continues to witness layoffs even after a year.
mPharma, a health-tech firm from Ghana, confirmed the dismissal of 150 workers in September, with 40 from its Nigeria branch. The company’s CEO, Gregory Rockson, attributed these workforce reductions to “macroeconomic factors, particularly the depreciation of the naira.”
Interestingly, this development follows 19 months after the startup secured a substantial $35 million Series D financing round.
8.Job Opportunities: Sama Offers 2,100 AI Positions to Kenyans
Following a severance of ties with Meta, the Kenyan content moderation business, Sama, has charted a new course.
In a recent announcement made in September, the firm shared its transition plans from content moderation to artificial intelligence (AI). As stated by Kenya’s cabinet trade secretary, Moses Kuria, Sama is gearing to recruit 2,100 Kenyans for various AI-centric roles, encompassing machine learning and business process outsourcing (BPO).
- Social Media: Kenya’s Pursuit Against TikTok Continues
While Sama may no longer wish to regulate content, many Kenyan entities certainly do.
Last month, Kenyan authorities intensified their efforts to ban TikTok or limit its functionalities. The Kenyan Film Classification Board (KFCB) met with TikTok’s CEO, Shou Zi Chew, in the presence of the Kenyan president. The main agenda? They urged TikTok to turn off its Live function within Kenya, stemming from a petition to prohibit TikTok that the Kenyan Parliament had previously received.
In a related development, Uganda and Egypt have seen rising calls to ban TikTok through similar petitions.