Fintechs, information technology firms, and other companies in Nigeria, Kenya, and South Africa attracted a total of 613 Venture Capital (VC) deals valued at $3.9 billion, between 2014 and 2019.
This is according to a new report that was released yesterday by Africa Private Equity and Venture Capital Association (AVCA), a pan-African organisation that encourages and monitors VC investments on the African continent.
Details of the report
According to a copy of the report which was titled “Venture Capital in Africa: Mapping Africa’s start-up investment landscape”, 2019 marked the best year for VC investments on the continent since 2014. A total of 139 deals valued at $1.4 billion were recorded last year alone.
A large portion of these VC deals during the 6-year period was recorded in South Africa, a country reputed for having a “well-developed VC ecosystem”. In specific terms, South African companies attracted 21% of these VC deals, followed by Kenyan companies with 18% and Nigerian companies with 14%.
Interestingly, 21% of these VC deals were said to have gone to African-owned companies that are headquartered outside of Africa, although offering their services (mostly fintech solutions) to consumers on the continent. A prime example of such companies would be Chipper Cash, an African-owned fintech company based in San Fransisco which offers payment services in Nigeria and elsewhere.
While commenting on the findings contained in the report, AVCA’s board Chair, ‘Tokunboh Ishmael, said:
“Africa’s VC industry continues to grow from strength to strength and we expect 2020 to be another strong year despite global macroeconomic headwinds. The continent’s VC ecosystem showcases the best of African innovation and entrepreneurship, which has the potential to be a key source of solutions to Africa’s intractable problems and a gamechanger for the continent’s development trajectory. AVCA remains committed to supporting the VC industry by charting its growth and providing authoritative research on the asset’s fundraising, deal, and exit activities.”
Further breakdown of the report
The fintech and information technology sectors received a bulk of these VC deals, accounting for 19% of the total volume of deals, respectively. Meanwhile, consumer discretionary and industries accounted for 18% and 12% of the deals, while communications, health care, and consumer staples collectively accounted for 19% of the VC deals over the 6-year period.
The report noted that a greater percentage of these VC deals streamed in from international investors. The African CV ecosystem was also said to have played a role. Some of these VC investors include AfricInvest, Alitheia Capital, Helios Investment Partners, and IFC Venture Capital.
You may download the full report by clicking here.