2020 The year of African startups, the startup ecosystem in Africa has grown beyond leaps and bounds to exceed expectations. The resulting funding achievement of these new ventures has become proof of the successes recorded.
Now 2020 came with its promises and then the reality of COVID-19 shattered many of those promises, many industries, sectors, and even economies came crashing to their knees. Despite all of this, the African startup ecosystem remained resilient and thrived. The growth of technology-based entrepreneurs has continued to break ground across the continent. In Egypt, Rozeta raised a $40 million series of funding in February 2020.
Pay-Me is an infrastructure technology enabler providing payment solutions to empower digital financial service providers through mobile wallet technology In Eastern Africa. In December, the startup introduced a new business-to-business or b2b e-commerce marketplace, with plans to scale it up to new locations in 2021 and add new services to its offerings.
Also in Kenya Armitrack launched its peer-to-peer or p2p trucking logistics marketplace in 2019, intent upon disrupting the country’s difficult and inefficient road transportation network by connecting transporters directly, with cargo owners skipping middlemen and making pricing more competitive in southern Africa.
A notable startup worth mentioning uses technology to manage properties, Rios finally launched its services to the public towards the end of 2020. With backing from heavyweights local angels, including bill Palladino and Mark Forrester. Premier credits is a micro-lending platform in Zambia. It started operations in 2019, and provides microloans to Zambian entrepreneurs and small-scale traders, primarily women, and has already launched operations in Zimbabwe in partnership with a local bank providing affordable bicycles, smartphones, and solar equipment on a pay-as-you-go basis.
Now coming to West Africa saga, the startup Gozem was initially a motorbike riding hailing service, but quickly added car taxis, rickshaw hailing expanded to the Benin Republic, and launched an e-commerce delivery services and finally acquired Togo’s leading food delivery app deliver in October.
The acquisition of FinTech company Pay Stack by global payment lender Stripe for more than $200 million was a landmark moment for the African startup scene, one of the COVID-19 crisis hits. Many expected the African startup space to dwindle, funding, and was expected to take a serious hit. And there were fears for the survival of many of the continent’s most promising young businesses. Some startups were seriously impacted. But African Tech has managed to ride out the crisis, though it isn’t over yet.
Let’s look at some of the startups across African regions.
Since it launched in 2015 in Cairo, Rozeta has allowed more than 4 million patients across four countries to search, book and review the best doctors and medical services in just one minute. It also provides innovative software as a service to more than 30,000 healthcare providers listed on its platform in May market forces to raise $350,000 in seed funding. It was then named as the only Sub Saharan African company selected for the Y Combinator summer 2020 batch securing another $150,000 in funding.
Now in August Pay Mob raised a $3.5 million funding round to grow its merchant network and accelerates regional expansion, with a startup targeting further expansion in Africa and the Gulf Cooperation Council countries.
In December of 2020, premier credit secured $650,000 in funding from Enigma ventures to support further expansion across the Sadek region.
Do you see any region particularly sort of taking dominance when it comes to how startups are growing and incubated in that space?
I mean, if you look at the data, obviously, South Africa, had the biggest resources allocated to bed in terms of the number of companies within Africa, and Nigeria which a huge part of that is also demographic, any product you launch and does well in Nigeria, you will have 200 million people to provide, your product or service.
At the end of the day, execution is what will drive success. If you capture Legos, you’ve already exceeded what you can potentially extract out of Ghana. Legos being the 3rd largest economy in Africa.
So we’ve talked about FinTech being the big money-spinner in Nigeria, what about in East Africa? What about South Africa? What are we looking at? I think, by the time you go to Kenya, they tend to be a bit more diverse. A lot of logistics businesses have done, you know, especially in Kenya, raised pretty decent money. South Africa, it’s, it’s a lot more diverse. And that also goes to show the, in terms of the maturity of that market. So when you go from TMT to FinTech to insurance tech, there, there are a couple of exciting companies. So I was looking at South Africa run insurance to bring him here, there’s no reason why we wouldn’t be able to launch him. But yeah, obviously it goes back to some of that external factor. If you kind of you know, before you solve a problem, you tend to know the requirement for you to kind of know space well, so you can identify what the pain points are and develop a solution. There are one or two insurance companies in Nigeria as well, as well as healthcare. Okay, yeah, it’s coming up and at the end of the conversation is the fact that they are growing. There might be some right now that are the superstars of the ecosystem, but they’re those who are nipping at their telco. So let’s talk about funding. Now. We’ve seen that external funding on many fronts might be dwindling.
But with startups, several African investors are becoming more interested And are actively investing. Many would even say it’s past time for Africans to invest in Africa. So what do you think about this trend?
There’s a lot more in terms of the African startup, but we are very happy to see the progress of the startups on the continent in 2020, the pandemic year, as we call it, but the year in which we saw success, we saw the scale.