Contrary to a year 2020 which saw foreign direct investment fall in the world, and decline by 18% in Africa, the African tech sector is celebrating. Young people ...

Investments: a good year 2020 for African start-ups despite the pandemic

Employees of the delivery start-up Paps ship the orders to their premises in Derklé, a district of Dakar, on April 30, 2020. Many African start-ups have been able to adapt to the constraints of the pandemic.

AFP - SEYLLOU

Text by: Olivier Rogez Follow

3 min

Contrary to a year 2020 which saw foreign direct investment fall in the world, and decline by 18% in Africa, the African tech sector is celebrating.

African start-ups received $ 701.5 million in funding, up nearly 43% from 2019. This is evident from the data compiled by the specialized online site Disrupt Africa.

Publicity

“

My tech company does not know the crisis.

This is the motto of African start-ups after a record year 2020.

In total, according to

data collected

by the online site Disrupt Africa, 397 start-ups have raised more than $ 700 million in capital.

An increase of nearly 43% in value compared to 2019, when they received $ 334 million.

In addition, more and more start-ups are attracting capital: 27.7% more from one year to the next.

The craze for African tech in 2020 is all the more impressive given that it comes the year when investors deserted the continent due to the pandemic.

This phenomenon therefore reflects the growing credibility of an increasingly powerful sector.

In five years, African tech has attracted $ 1.9 billion.

In a recent report, "e-Conomy Africa 2020", the giant Google and the International Finance Corporation (IFC) estimate that the digital economy could contribute 180 billion dollars to the African economy by 2025.

Voracious but cautious investors

However, not all countries are in the same boat.

Four of them stand out and receive 90% of the investments.

These are, in order of Kenya, Nigeria, South Africa and Egypt.

77% of the funded start-ups were domiciled in these countries.

Kenya remains the land of plenty for start-ups, since it alone raises 190 of the 700 million dollars.

However, the survey notes that more and more African countries - 24 in 2020 against 19 in 2019 - are participating in this global movement to attract international capital.

Long lagging behind, French-speaking Africa is gradually emerging from the crowd.

Still, if investors are voracious, they remain cautious and do not put their money in just any electronic wallet, since it is the sector of fintechs, online banking and dematerialized payment solutions, which attracts the most funding.

Of the 397 companies that have successfully attracted capital, 99 are fintechs, or 25% of the total.

Investments: a good year 2020 for African start-ups despite the pandemic

Investments: a good year 2020 for African start-ups despite the pandemic

Voracious but cautious investors

You may like

Trends 24h

Latest