African Startup Funding Gains Momentum

African tech startups are securing more funding than ever before, with investors starting to look beyond the traditional hubs and sectors for new opportunities.

- Tom Jackson

Though reporting different figures, research from the likes of investment firm Partech Ventures and startup portal Disrupt Africa, found 2017 was the best year yet in terms of startup funding.

Data from Disrupt Africa showed 159 startups on the continent were able to raise a combined total of $195 million over the course of the year, with total funding up 51%. This is due to the fact that more local and international investors are targeting the tech scene, supporting innovative tech solutions which they see have the potential to solve continent-wide problems and generate significant returns.

As the leading tech hubs on the continent, South Africa, Nigeria and Kenya continue to claim the bulk of funding, there is a growing body of evidence that investors are looking beyond these established destinations for opportunities.

The total share of funding secured by startups in these three countries has been in steady decline, falling to 74.7% last year from 80.3% in 2016, and 81.7% in 2015. Although total funding raised by these three countries is still on the increase, other African countries are rising to prominence.

As an example, funding for Ghanaian tech startups increased by 150% in 2017, while Egypt (and other North African countries) has established itself as a serious alternative destination for investors as the economic and political climates stabilize post-Arab Spring.

Tarek Assaad is managing partner at Algebra Ventures, a technology venture capital firm in Egypt. Algebra Ventures raised $40 million in late 2016, the largest amount ever raised in the country, and the company has since invested in a host of tech startups.