It also noted that the early-stage rounds of seed and Series A investments were extremely dense, signifying investors’ increased confidence in taking early bets in Africa.
African startups raised $2 billion in funding rounds last year according to the Partech Africa 2020 report.
“The Partech Africa report tracked 250 rounds raised by 234 startups compared to 164 rounds by 146 startups the year before, representing 52 per cent growth year-on-year growth in deal count,” the report reads in part.
It also noted that the early-stage rounds of seed and series A investments were extremely dense, signifying investors’ increased confidence in taking early bets in Africa.
Startups look to investors to acquire capital since they are usually alienated by financial institutions.
The process is sequential, divided between pre-seed funding, seed funding, series A, B and growth. according to data, Investors continue to invest majorly in startups at the growth stage, which attracted $912 million from 19.
This is because startups at seed funding seek funds to apprehend a business idea or concepts, which is riskier than at growth stage when companies are already operating with some level of expected success.
According to the report, Nigeria attracted a record high of $747 million in tech VC investment which was 37% of all funding but only took 4th place behind Egypt in the deal count with a total of 16 startups.
Kenya took the 2nd place both in total funding as well as in the number of transactions with $564 million in funding over 52 deals and 15 startups.
In terms of total funding, South Africa slowed down compared to Nigeria and Kenya, with $205 million from 11 startups, but it remains the first in the deal count with 66 deals thanks to its maturing early-stage ecosystem growing faster.
According to the report, Egypt is getting strong attention by securing the 3rd place both in terms of total funding and in the number of transactions. With $211 million in total funding from 12 startups it overtook South Africa for the first time. It also surpassed Nigeria in the deal count with over 47 deals.
Ghana raised $55 million from 10 startups, Uganda raised above $38 million from 4 deals while Senegal raised $16 million from six deals.
Source: The Exchange