Startup - December 23, 2021

Startups in Africa Raised $4bn in 2021 despite COVID-19 Pandemic

This year, five of African startups became unicorns, with two in September alone, an indicator of unprecedented investor interest in Africa’s startup ecosystem.

December 23, 2021

4 min read

A lot of startups in Africa rebounded and raised a record $4 billion before the close of 2021, showing a rise in investor interest in the continent’s rapidly growing tech industry.

Africa currently has seven unicorns: Jumia, Interswitch, Flutterwave, Andela, Wave, OPay, and Chipper Cash.

This year, five of them became unicorns, including two in September alone, suggesting an unprecedented interest in Africa’s startup industry.

The main terrains of startups in Africa, Nigeria, South Africa, Egypt, and Kenya, have eaten the lion’s share of over $4 billion raised in 2021.

According to data-driven research firm Briter Bridges, African businesses raised $605 million in November 2021 alone, which is roughly half of the total amount of funding raised by African startups in all of 2020, around $1.3 billion.

While financial technology companies continue to receive the lion’s share of total funding, cleantech is increasingly attracting capital from local and international investors, including a growing number of corporations looking to accelerate their transition to renewable energy.

“Healthcare, data and IT infrastructure, and agriculture follow as more private companies reach maturity, but ticket sizes remain contained compared to those across fintech and cleantech”, Briter Bridges said.

According to Connecting Africa, Nigeria, South Africa, Egypt, and Kenya accounted for 80% of all cash raised on the continent by the end of November, with Nigeria accounting for 35% of all capital raised.

In 2021, Nigerian companies raised $1.37 billion, whereas South Africa raised $838 million, Egypt raised $588 million, and Kenya raised $375 million. For the year, startups in Africa’s most populated country landed over 200 deals, while the remaining three countries each landed over 100.

According to Connecting Africa, Senegal and Tanzania were two other proactive areas outside of the big four, with entrepreneurs raising $222 million and $96 million, respectively.

Chipper Cash, which raised a total of $250 million this year, was one of the biggest success stories. The writers, Max Cuvellier and Maxime Bayen, decided not to pin the funding to Ghana, claiming that the startup’s Ghanaian and Ugandan co-founders, as well as its African headquarters, split between Ghana and Kenya, “making it extremely pan-African”.

“Without Chipper Cash, Ghana raised $48m in 2021; Algeria – $30m; Morocco – $29m; Tunisia – $23m; Uganda – $18m; Rwanda – $16m; the DRC – $12m and Cameroon – $11m”, Connecting Africa study stated.