Tech startups in Africa raised $129-million in funding in 2016, according to a new report, which found a 16.8% increase in the number of successfully funded start-ups over 2015.
South Africa was the country that saw the most funded start-ups, followed by Kenya, Nigeria, Egypt, Ghana, and Rwanda.
‘South Africa, Nigeria and Kenya remained the three most popular investment destinations on the continent, accounting for 80.3% of funds secured,’ according to the Disrupt Africa African Tech Startups Funding Report 2016.
‘Meanwhile, Egypt experienced over 100% growth in fundraising, making it the fourth ranked destination.
‘This displays substantial growth in the number of startups to raise funding as compared to the previous year, although the overall total amount of funding recorded declined,’ said Disrupt Africa co-founder Tom Jackson.
South Africa also saw the largest total funding, with Nigeria almost tied, then Kenya, Egypt, Ghana and Morocco.
‘The number of startups that raised funding increased 17% from 125 to 146. This demonstrates increasing interest in African tech startups in a variety of sectors, while it is refreshing that a greater percentage of those startups came from outside the big five – South Africa, Kenya, Nigeria, Eqypt and Ghana,’ Jackson told me.
But, the report found, the total amount of funding fell. ‘More startups are raising smaller rounds. It is the end of irrational money, and an upturn in angel investing from both at home and overseas,’ he adds.
Gabriella Mulligan, co-founder of Disrupt Africa, added: ‘2016 was another great year for African tech startups and investors.
Leaps and bounds
Our ecosystem progressed in leaps and bounds over the course of the year, which is evidenced by strong growth in the number of startups raising funding, and an encouraging expansion of ecosystem activity across the continent.’
There was a notable upturn in Egypt and other North African countries, Jackson said.
Not surprisingly, fintech was the sector with the most start-ups, followed by e-commerce, e-health, agri-tech, and the recruitment, transport and marketing sectors were tied. Fintech also achieved the most funding, then entertainment, solar, e-health, agri-tech, and marketing.