Nigeria leads as African tech startups get $334.5m funding in 2018

Nigeria last year supplanted South Africa as Africa’s startup funding hub, raising an impressive $94.912 million in investment secured by 58 startups, according to the annual African Tech Startups Funding Report 2018 by Disrupt Africa.

The report, now in its 4^th year, showed that South Africa secured $59.971 million through 40 businesses, while Kenya occupied the third position in terms of the number of startups that secured funding.

Overall, African tech startups made significant gains last year as 210 startups secured $334.520 million worth of investment, representing the best year since the records began, and a substantial leap on 2017. The number of startups that secured funding grew by 32.1 per cent, while total funding jumped by an impressive 71.5 percent.

“It has been an incredible year for tech startups in Africa – and it’s a real pleasure to release this report and the impressive figures it contains. The continent’s entrepreneurs have grabbed the attention of investors, accelerators, and media both locally and globally this year with their innovative solutions and business models, and it’s great to be able to report on such strong results across our ecosystem,” said Gabriella Mulligan, co-founder of Disrupt Africa.

However, other African countries are emerging as more than viable alternative destinations for funding as investors increasingly look beyond the traditional “big three” startup ecosystems. This has been a trend that has been slowly developing over the last few years. Whereas in 2015, South Africa, Nigeria and Kenya accounted for more than 80 per cent of total funding raised, in 2018 that had fallen to 61.8 per cent.

Much of that is attributable to the rise of Egypt as a destination for funding, with the country’s startups raising US$58.9 million in 2018, clearly establishing Egypt as a leading startup hub on the continent. Companies in 16 other African countries secured investment.

In terms of sectors, the fintech space continued to dominate, remaining a clear favourite among investors and, at US$132.75 million, accounting for 39.7 percent of total funds raised. This was an increase on previous years, but nonetheless there are strong signs of progress in other sectors, with multiple ed-tech, e-commerce, e-health, transport, logistics and agri-tech startups raising funding as investors saw opportunities in many areas.

Source: Agency Reports