By Marc EtcheverryPosted on 27-03-2019Modified on 27-03-2019 at 20:26

According to a recent report from the Partech Africa Venture Capital Fund, Tech companies have "raised" just over $ 1.16 billion in investment in 2018, more than double the previous year.

In the world of technological innovation, the number of fundraisers, counted as "rounds", and the amounts committed are a good indicator of the state of health of a sector. But if we refer to the latest study published by the venture capital fund Partech Africa, we can only fall into a blissful optimism: according to this one, in one year, African start-ups managed to gather more $ 1.16 billion, an absolute record when you know that in 2017, this amount was "only" 560 million * .

This frenzy of investment in the young shoots of Tech is certainly not limited to Africa. In the United States, for example, in 2019, investment levels surpassed those of before the bursting of the "internet bubble" twenty years ago. Levels that are still far superior to those we are talking about here.

But the peculiarity of the African continent is this tendency to accelerate, investments having quadrupled in the space of three years. They smash the forecast of Partech Africa, which envisaged that the billion dollar mark would be crossed in 2020.

French-speaking start-ups do not convince

For Tidjane Deme, one of the authors of the report, we are far from the irrational excitement that would give birth to a new bubble. " African start-ups, by tackling structural problems, create wide opportunities ," he says. They generate much more than marginal optimizations [they favor] profound transformations, thus creating a lot of value. "

This progress, as rapid as it is, remains however unequal and it is not the same in Lagos as in Dakar. In the country rankings, three cling firmly to the podium: Kenya, Nigeria and South Africa. Three countries with a well-established reputation on the African technological scene, " three hubs that leave little room for the rest of the continent, " says Tidjane Dème.

Far behind are the countries of the French-speaking world. The comparison is even cruel: when Kenyan start-ups manage to raise $ 348 million (309 million euros) alone, those in French-speaking Africa, all countries combined, have only 54 in their purse. Worse, this figure is slightly down.

" We have a real culture of the market and the disintermediation in the Anglo-Saxon countries and by extension, culturally, in countries like Kenya or South Africa" , analyzes Valérie-Noëlle Kodjo Diop, in charge of the innovation for the Africa, Mediterranean and overseas region to Société Générale. These countries are also more attractive simply because of language: you have to be able to interact with an ecosystem that is English-speaking, especially when it comes to access to cash. "

Risk taking

Another lesson from this report, investors would be less cautious. Fundraising in the seed phase - this time, still risky, to allow the finalization of the product before the start of its marketing -, have been multiplied by four in three years.

" Investment growth is happening at every stage of business development, and it's a great sign ," said Tidjane Dème. Conclusion: more and more start-ups are being created on the continent, they survive and mature . "

Valérie-Noëlle Kodjo Diop, who accompanies young African companies on behalf of Societe Generale, still tempers: " In general, Venture Capital [venture capital funds] and Private Equity [investment capital], intervene when startups are relatively mature . But it is when the young start-up companies need an amount ranging from 20,000 to 200,000 euros that the actors are missing . So yes, there are bodies that lend money, there are loans of honor ranging from 2,500 to 5,000 euros. But between the two, there is a huge hole. "

Thus, what the figures in the report present as greater risk-taking by investment funds should not make us forget that most of the money they invest is in companies that have already proven themselves. This is the case, for example, of the Nigerian Kobo360, the "Uber du camion" who, with a second round of fundraising at 6 million euros last December, is now attacking the Ghanaian, Togolese and Kenyan markets.

Its founders were right to focus on business service, this sector of activity is by far the most popular among investors. The amounts obtained by these startups have increased by nearly 400% in one year.

Despite this impressive leap, "financial inclusion", ie lower cost access to basic financial products and services, remains the area of ​​choice for investors. These are important issues for African economies, where the rate of banking is very low, these startups attract attention from the outset.

" It is often said that Africa reinvents the bank and the models of tomorrow , even ensures Valérie-Noëlle Kodjo Diop. I'll just give you the example of a Kenyan company, FarmDrive, founded by an engineer and her friends. On the basis of data collected through a partnership with a telephone operator, they have created algorithms to make credit by telephone, via SMS exchanges, to agricultural producers. "

Unfathomable resources

The turn signals are green. They are not, however, only in the Partech Africa report. Several studies published earlier this year, although showing different figures, also reflect this improvement.

But all face the problem of "undisclosed deals", these "undisclosed" agreements that blur the tracks. Indeed, in Africa as elsewhere, some fundraisers remain partially or completely secret. This makes any overall assessment difficult. Partech Africa, which has risen to advance the figure of $ 291 million investment in undisclosed agreements, concedes that the total amount could actually be greater than the 1.16 billion announced.

For the journalist Sello Moloi, from the specialist site Afrikan, what is known about investments in African start-ups is just the tip of a much larger iceberg . A vision disputed by the report's authors, who admit, however, that " greater transparency " is necessary for the good of the entire ecosystem.

* The Partech Africa study only takes into account amounts of less than $ 100 million and more than $ 200,000. Below, the so-called small "tickets", investments acquired mainly from "Business" Angels "are not counted because they are difficult to draw.

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