Report: 2021 best year ever for tech startup funding in Africa
A new report indicates that 2021 was the best year ever for tech startup funding in Africa, with more startups raising more money from more investors than any year on record.
Increasingly, however, that capital is focused on the “big four” markets of Nigeria, Egypt, South Africa and Kenya.
According to the seventh edition of Disrupt Africa’s African Tech Startups Funding Report, 564 African tech startups raised a combined US$2,148,517,500 in 2021.
The wider ecosystem has seen incredible growth in terms of funded ventures and total secured capital, while individual markets and verticals also had bumper years. Yet investor attention is becoming more focused on the major markets, which is perhaps unexpected at this stage of the ecosystem’s development.
Investment into African startups may have increased substantially across 2021, but the most of the benefits are being felt by a relatively small group of countries. Africa’s “big four” startup ecosystems – Nigeria, Egypt, South Africa and Kenya – raked in a combined US$1,977,910,000 over the course of the year, 92.1 per cent of the overall total.
This was the continuation of a multi-year trend whereby a greater share of funding is going to these more established destinations. The 92.1 per cent secured by the “big four” in 2021 was up from 89.2 per cent in 2020, 87.5 per cent in 2019, and 79.4 per cent in 2018. So while funding is undoubtedly on the rise, it is becoming more concentrated. The “big four” also accounted for a greater share of funded startups than in 2020, up to 80.1 per cent from 77.3 per cent.
Non-big four countries raised US$170,607,500, 7.9 per cent of the overall total. More than 40 per cent of that was secured by startups from Ghana, Morocco and Tunisia, with the latter two having especially strong years, while 64 startups from 17 additional markets secured backing.
These included many of the fastest growing startup funding destinations on the continent, with gigantic strides made by the likes of Zimbabwe, Uganda, Rwanda and Ivory Coast, so there are certainly many reasons for pride and optimism. Meanwhile, Algeria’s single round of 2021 was a US$30 million investment for transport startup Yassir, which ranked the North African country fifth on the continent for total funding raised.