Nigerian start-ups led other African businesses in investment attraction, Disrupt Africa has revealed in a report that estimated 210 African start-ups secured $334.5 million worth of investments in 2018.
Disrupt Africa’s annual African Tech Startups Funding Report for 2018 disclosed that Nigeria was the most preferred choice for financial investment, as 58 local start-ups from various sectors raked in a combined $94,912,000 funding.
After years of playing second to South Africa, Nigeria emerged as Africa’s start-up funding hub.
Breakdown of Disrupt Africa Report
The report, which tracks the total amount of funding raised by African tech start-ups each year, found that 210 start-ups raised a total of $334,520,500 in 2018. This, according to the report, was a substantial leap from 2017.
The number of start-ups that raised funds grew by 32.1 per cent, and total funding jumped by an impressive 71.5 per cent. Behind Nigeria was South Africa, with 40 businesses raising $59,971,000. Kenya ranked third in terms of the number of start-ups that raised funds.
Investors seeking alternatives to Nigeria, others
But the influence of Nigeria, South Africa, and Kenya is gradually dwindling, with investors seeking fresh grounds to invest in. Other African countries outside the top three are now being considered a viable alternative in the start-up ecosystems.
This was shown in the drop in funding of Start-ups in Nigeria, South Africa, and Kenya. The report stated in 2015, South Africa, Nigeria and Kenya accounted for more than 80 per cent of total funding raised, in 2018 that fell to 61.8 per cent.
Much of this was attributable to the rise of Egypt as a destination for funding, with the country’s start-ups raising $58.9 million in 2018, clearly establishing Egypt as a leading start-up hub on the continent. Companies in 16 other African countries secured investment.
Most preferred sectors for funding
In the total funds raised by these start-up businesses, fintech accounted for 39.7 per cent of the fund, securing $132.75 million seed fund. While other sectors like edu-tech, e-commerce, e-health, transport, logistics and agri-tech startups also attracted funding from investors.
The Co-founder of Disrupt Africa, Gabriella Mulligan analysed the tech report, stating it was an incredible year for tech entrepreneurs.
“It has been an incredible year for tech start-ups 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.”
While another Co-founder, Disrupt Africa, Tom Jackson, said
“The African tech space continues on its upward trajectory, with more start-ups than ever before securing record levels of funding in 2018.”