Four countries including Nigeria, Kenya, South Africa, and Egypt were the biggest on the continent when it comes to funding, accounting for 77 per cent of funded startups, and 89.2 per cent of total investment in 2020.
The yearly African Tech Startups Funding Report 2020, released by startup news and research portal, Disrupt Africa, has disclosed.
According to the report, in the sixth edition, Nigeria had the most funded startups at 85, followed by Egypt with 82, and South Africa with 81. Kenya had 59 funded startups but leads when it comes to combined raised capital at over $190 million in funding in 2020.
The report noted that although these markets remain clear leaders, there are signs of growing activity elsewhere on the continent with more investments in Ghana and Tunisia and more money raised in Morocco.
It explained that if Ghana and Tunisia are added to the top four, then the top six countries accounted for 84.6 per cent of funded startups and 92.6 per cent of total investment.
In 2020, startups secured investment in 24 different countries, an increase on 2019 when there were funded companies in 19 countries.
Connectingafrica.com in its analysis, said although more startups from less-established markets are raising funding, capital continues to concentrate in the big four, which brought in a combined $625.6 million.
The report stated that the biggest growth story in Africa last year was Ethiopia, which saw five startups raise $2.3 million, an increase of 9,160 per cent from the single $25,000 recorded in 2019. However, $2 million of the 2020 total went to one software development and training company, Gebeya.t
Morocco, Senegal, Rwanda, Ivory Coast and South Africa saw the next biggest increases in funding between 2019 and 2020.
The report found that overall new funding records were set in 2020, as 397 startups raised $701.5 million in total funding. This was an improvement on the previous year, with the number of funded startups increasing 27.7 per cent from 2019’s number, and the funding total growing by 42.7 per cent.
Co-founder of Disrupt Africa, Gabriella Mulligan, noted: “The growth in funding seen across the continent’s tech ecosystems in 2020 is extremely strong, and all the more impressive given the circumstances of the year – COVID-19 and its many implications.”
“As African startup funding passes the $700 million mark for the first time, and more investors pump more money into more markets than ever before, there are no signs of the sector slowing down.”
Overall, Africa’s startups have seen a lot more funding coming their way since the report began in 2015; back then only 125 startups secured investment, compared to almost 400 in 2020.