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Where do the Majority of Investments into African Startups Go?

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Where do the Majority of Investments into African Startups Go?

The last few years have seen a significant increase in investment poured into African startups. Startups across the continent have collectively broken investment records as billions of dollars continue to flow into the continent and more startups emerge with groundbreaking ideas and solutions. In 2021, the total investments made into African startups are estimated to be anywhere between $4.3 – $5 billion, and this figure is expected to keep rising over the next. Disrupt Africa reports that in January and February 2022, tech startups raised just over $1 billion, reflecting that the level of investment into Africa is on a continuous upward trajectory. 

The big 5

Most of the startup funding that has come into Africa has gone into what have become the big 5 countries as far as startups go. Fintech is the leading industry as far as attracting investment goes and this industry is set to become one of the major drivers of the African economy.  South African startups have attracted the highest investment on the continent with $9.7 billion having been raised by startups in the country to date. Nigeria ($5.8 billion), Kenya ($3 billion), Egypt ($1.5 billion), and Ghana ($799.6 million) complete the 5 leading countries on the continent when it comes to attracting investors.

Where else is the money going? 

Through this series, we have highlighted several startups across the continent that have come with innovative solutions that can be attractive to investors from around the world. Outside of the top 5 countries, there are many other territories that are home to startups that are attracting significant investment. Logistics and supply chain startups are leading investment attractions in Senegal ($310.9 million), and the country is set to become an industry leader in the sector as a result. The improvement of supply chains on the continent has the ability to foster the transformation of the African economy. Jet Stream Africa (Ghana) is one such startup that is building solutions to improve the supply chains that serve African businesses. 

Other countries that are home to startups that have raised significant amounts of investment include Morocco ($226.8 million), Tanzania ($81.9 million), Mauritius ($380.5 million), and Zambia ($85.9 million) among others. Investment onto the continent has been spread across all parts of it, and this shows that startups finding their feet is not a trend limited to one or two areas. When funds are spread across the entire continent, it gives all countries where investment trickles into a chance to participate in the global economy.

There is room for more startups

The reason why there is a lot of interest in investing in African startups is that Africa finds itself in a unique position. The continent is home to the youngest population in the world and it is this population that makes it attractive. These youths have the potential to become drivers of the world economy over the next couple of decades. What it also means is that the existing startups are just the beginning of what could become the next major boom, especially in the world of tech. 

There is definitely room for more startups to join the wave and become a part of the train pushing to change the African economic landscape. The time for new ideas is right and so is the environment. Consumers are constantly looking for products and services that improve their lives, and it is the collective duty of all who have the right ideas to bring those solutions to life. 

AfriBlocks will be hosting its annual summit between the 6th and the 7th of May. For more information about how you can become a part of the summit, visit https://freelancerssummit.org/

AfriBlocks Network

Author Since: March 10, 2022