African Startups Set New Record with Over $700M Funding in 2020

A new startup funding report by Disrupt Africa shows that 2020 was not at all a bad year for the African startup ecosystem as more money was raised from investors than ever before.

The report is the sixth edition of the annual African Tech Startups Funding Report 2020 released by startup news and research portal Disrupt Africa and is for the first time available free as part of an open-sourcing programme in partnership with Catalyst Fund, RTB House, Quona Capital, 4Di Capital, Villgro Africa, Lateral Capital, and Otundi Ventures.

The report shows that new funding milestones were reached in 2020 with 397 African startups securing an incredible US$701.5 million in total funding. All of these numbers are up significantly compared to the previous year, with the number of funded startups rising by 27.7 percent in 2019 and the overall amount of funding growing by 42.7 percent.

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Although growth has slowed a bit, amid the COVID-19 pandemic, the numbers represent the remarkable trajectory from 2019, and indicates that the African tech startup ecosystem continues on its strong footing from a funding perspective.

At least 370 active investors are included in this year’s report, reflecting 42.8 percent growth compared to the previous year, when data tracked 261 investors. This number is an increase on the 155 investors we recorded in 2018,

From a funding viewpoint, Kenya, Nigeria, South Africa and Egypt remain emphatically the “big four” of Africa, accounting for 77 percent of funded start-ups and 89.2 percent of overall investment. Nigeria (85), Egypt (82) and South Africa (81) are leading the way from a venture perspective, but Kenya is the leader of Africa in terms of total combined raised funds, with start-ups from the East African country raising more than US$190 million in funding in 2020.

Whiles these markets remain strong leaders, startup activity in other locations on the continent is on the rise, with startups sponsored in 24 African countries, up from 19 in 2019, 20 in 2018, and 18 in 2017.

Once again, the financial technology market was the most lucrative for investors in 2020, with more startups receiving financing than any other sector and a combined total that surpassed all the others.