African startups raised $1 million every 2 hours in 2021 — Africa: The Big Deal
Even to a casual observer, 2021 was a massive year for the African tech ecosystem. It was the year when there were more disclosed funding rounds than we could keep up with. Data from various sources show that startups on the continent received over $4 billion from investors in 2021. That represents more than double the investments gotten in 2020.
Numbers, they say, don’t lie, and with help from Briter Bridges’ Africa Investment Report 2021 and data from Africa: The Big Deal, we’ll be extracting some insights.
Funding for women-led startups needs to be better
Much has been written about the near absence of financing for women-led startups. While startup funding continues to grow, it is still disproportionately skewed towards startups led by men or at least one man on the founding team.
The Big Deal reports that only 0.95% of the funding raised by African startups went to startups founded or led by a woman. While this percentage is less than that of 2020 (2%), it is partly explained by the fact that funding raised in 2021 was 2.5x more than 2020’s figures.
However, it is noteworthy that while the total amount raised by women is increasing, the percentage of funding going to startups founded or led by women is on the decline from 4% in 2019 to 0.95% in 2021.
To be fair, women worldwide have a harder time raising money than men, and with Africa’s startup scene in its early stages, that is to be expected. However, more can and should be done to fund African startups founded by women. Fortunately, it seems more investors are willing to do this with firms like FirstCheck Africa providing funds for female founders.
Fintech reigned supreme
As has been the case in the last few years, fintech startups received the bulk of funding in 2021. According to Briter Bridges, 62% (~$2.9 billion) of total funding in African startups went to fintech startups, double the 31% recorded in 2020.
Healthtech and Biotech follow closely at 8%, with logistics (7%), education (5%), and cleantech (5%) rounding up the top five sectors by investment value. With payments still posing a problem for businesses and individuals, fintech looks set to retain its place as a preferred destination for investment in Africa for a while.
Four countries still dominated
Just like fintech and men dominate funding received, the Big Four – Nigeria, Egypt, South Africa, and Kenya – still dominate Africa’s funding scene. For example, Nigeria alone accounts for a whopping $1.5 billion of the total funding.
Funding for women-led startups needs to be better
Much has been written about the near absence of financing for women-led startups. While startup funding continues to grow, it is still disproportionately skewed towards startups led by men or at least one man on the founding team.
The Big Deal reports that only 0.95% of the funding raised by African startups went to startups founded or led by a woman. While this percentage is less than that of 2020 (2%), it is partly explained by the fact that funding raised in 2021 was 2.5x more than 2020’s figures.
However, it is noteworthy that while the total amount raised by women is increasing, the percentage of funding going to startups founded or led by women is on the decline from 4% in 2019 to 0.95% in 2021.
To be fair, women worldwide have a harder time raising money than men, and with Africa’s startup scene in its early stages, that is to be expected. However, more can and should be done to fund African startups founded by women. Fortunately, it seems more investors are willing to do this with firms like FirstCheck Africa providing funds for female founders.
Fintech reigned supreme
As has been the case in the last few years, fintech startups received the bulk of funding in 2021. According to Briter Bridges, 62% (~$2.9 billion) of total funding in African startups went to fintech startups, double the 31% recorded in 2020.
Healthtech and Biotech follow closely at 8%, with logistics (7%), education (5%), and cleantech (5%) rounding up the top five sectors by investment value. With payments still posing a problem for businesses and individuals, fintech looks set to retain its place as a preferred destination for investment in Africa for a while.
Four countries still dominated
Just like fintech and men dominate funding received, the Big Four – Nigeria, Egypt, South Africa, and Kenya – still dominate Africa’s funding scene. For example, Nigeria alone accounts for a whopping $1.5 billion of the total funding.
Comments
Post a Comment
Message Sent