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Startups on the African continent saw an investment influx of $168.6 million spread across 118 disclosed deals in the first half of 2018. The figure eclipses the entire 2017 annual funding mark of $167.7 million, according to new data from Weetracker.
Cellulant and Branch International – both fintech companies with outlets in Nigeria country – secured the most investments in the period. Cellulant, which has a Nigerian co-founder, announced a $47 million Series C funding from TPG Growth in May 2018 while Branch bagged $20 million in March, both controlling 39.88% of the total investments.
The African Startups & VC Ecosystem Report noted that the investment amount also represents a massive leap of 3.5 times in amount invested from the first half of 2017 where investors only poured in $47.23 million in 72 deals.
Majority of the investment came in through grants and seed investments. 27 startups received grants whereas 19 deals went to seed investments during the period.
Nigeria emerged the top investment destination with 31 deals attracting $29.41 million. Although Kenya had lesser deals (23) it however received far more funding, $82.86 million, almost three times of the total funding to Nigeria.
The Weetracker report quoted David Van Dijk, co-founder of African Business Angels Network (ABAN) as saying, “The secret sauce of finding the right deal at the right time in Africa is not different from anywhere else in the world. You need to understand the market – the opportunities, the challenges – better than anyone else and be brutally good at picking the team that indeed can deliver. Execution in Africa is very different, as there are many additional battles to win before calling victory.”
Leading the tech companies in Nigeria that secured the most deal during the period are SureRemit, a fintech firm which secured $7 million through initial coin offering (ICO); Lidya, another fintech that attracted $6.9 million in seed investment, and Terragon Group, an analytics company which received $5 million VC funding.
The fintech segment continued to be investors’ number one attraction, garnering 25 deals. Nine of the fintech startups on the report are based in Nigeria while 6 are in South Africa. The 25 deals secured a total of $95 million, driven by Cellulant and Branch investment raises.
Healthtech and agritech managed to corner 13 and 10 deals respectively to emerge the top three.
Ecommerce which had 9 deals cleaned off the top four spot. Nigeria’s recent ecommerce misadventures were evident as none of companies operating in the country announced any deal in the first half. Remarkably, six of the nine ecommerce startups are based in Egypt.
The investments into the continent cut across venture capitalists, Angel Networks, corporate, accelerators and incubators.
“African startups have a strong support system in the form of many tech hubs, incubators and accelerators,” authors of the Weetracker’s report noted. “The first two quarters of the year saw the launch of 11 incubators and accelerators. South Africa followed by Nigeria and the maximum number of these facilities being opened up. Notably, four of these had a focus on skill development of aspiring and early stage entrepreneurs. Also the World Bank gave $3 million to Nigeria, to be invested in six technology hubs across the country.”
