Africa’s tech revolution is picking up speed, with 2017 proving the best year on record for the continent’s tech startups as investment topped US$195 million over the course of the year.
SA equity crowdfunding site Uprise.Africa
New research by entrepreneurship portal Disrupt Africa shows that in 2017 the number of African tech startups to raise funding hit 159 – up from 146 companies in 2016. In 2015, only 125 startups managed to attract investment. Investor confidence and willingness to back African tech ventures is clearly accelerating.
The total funding raised by these companies – US$195,060,845 – also marks a 51% rise on the previous year’s figures, taking investment into African startups to an all-time record high.
“The tech entrepreneurship ecosystem is really coming into its own across Africa. There have been years of speculation as to whether the tech-first Africa narrative is real or just hype, but these numbers emerging in our research show undeniably that African startups are impacting all aspects of daily life and service delivery,” says Gabriella Mulligan, co-founder of Disrupt Africa.
While startups are using technology to shake-up everything from healthcare to home cleaning, fintech has been by far the best backed sector since tracking began. In 2017, almost one third of all funding went to fintech companies – this proportion has remained stable over the past three years.
A few other sectors also saw success in 2017. Although e-commerce floundered in 2016 – receiving little support from investors – this trend reversed in 2017. The e-commerce space grew 350% on the previous year to collect over US$16 million in investment over the course of the year.
With nearly one billion people in Africa active as smallholder farmers, it comes as no surprise that entrepreneurs and investors alike are starting to tap into the agri-tech space. This space is charting out a decidedly upward trajectory, with funding into this sector growing 203% in 2017.
“Areas like agri-tech and e-health offer the perfect balancing of motivations for investors. With vast untapped markets in need of innovative new solutions, and the substantial impact element of ventures operating in these areas, these investments offer both sizeable returns and impact,” Mulligan says.
South Africa, Nigeria and Kenya continued to solidify their position as the top three investment destinations in Africa, although 2017 saw other markets begin to emerge as alternative hotspots. Activity in Egypt and Ghana is picking up pace, while countries like Uganda and Morocco also placed themselves on the map this year.
As such, investment in Africa’s tech ecosystem took on a decidedly pan-African flavour in 2017, a trend which will continue to develop as the continent carries on presenting high quality innovations and businesses, tackling Africa’s challenges, but also scalable across the world.