Africa is home to notable unicorns in the tech community and it’s a wonder just how fast Africa tech ecosystem has grown. In 2019, it was estimated that a whopping $2 billion went into the growth of tech startups in Africa.
However, a few months into the pandemic hit Africa in several ways than one. Investments were slowed down and companies had to adjust to a necessary work-from-home policy.
The continent had gotten rapt attention from the global audience since the visit of top figures like Jack Ma of Alibaba and Jack Dorsey of Twitter. But, the pandemic lowered the high expectations that the global tech ecosystem was beginning to have of Africa.
Since its recovery from the pandemic, Africa has since witnessed massive growth in both the success/funding of startups and the amazing achievements of its unicorns. The pandemic left its negative marks but it also contributed to the growth and successes of tech companies in Africa.
As businesses reopened globally and the pandemic drove people to adopt new habits in e-commerce, work, expenditure, online delivery, and learning, venture capital into various industries was poised to increase immensely and Africa was not exempted.
Stephen Deng, co-founder and partner of DFS Lab, a firm that invests in digital commerce startups, serially compared the 2016 Southeast Asia funding landscape to where Africa might be in 2021 at $3 billion. His predictions weren’t far-fetched as recorded numbers from Maxime Bayen surpassed Deng’s predictions.
Attaining unicorn status (which would require a valuation of $1 billion) is the dream of every founder and it’s definitely not an easy feat. Interswitch was the only unicorn the continent had until five more African companies attained the unicorn status. These 5 companies are; Flutterwave, OPay, Wave and Chipper Cash and Andela.
In terms of funding, international investors remarkably took the bull by the horns and offered their support for their desired startups from pre-seed to Series E stage. Investors such as Berlin-based VC firm Target Global and renowned investment firm and hedge fund Tiger Global cut checks across early and growth stages.
Target invested in both Series A rounds of Kuda and Mono (including the Series B round of the former). The European VC also led the pre-seed rounds of Kippa and Edukoya. On the other hand, Tiger led Union54’s seed round, Mono’s Series A and later rounds in FairMoney and Flutterwave.
Other deals where growth firms participated in early and growth stages included Sequoia in Telda’s pre-seed; Wave’s Series A, via stealthy wealth management fund Sequoia Heritage; and OPay’s Series C, via its subsidiary fund Sequoia Capital China.
It is expected that Africa would witness substantial growth in the following years. BusinessDay has referred to the continent as a “bright spot” while discussing the positive effects of cryptocurrency in Africa. Nigeria is one of the companies that have benefitted from Cryptocurrency in no small measure.
A good number of Africa’s currently engaged young tech talent with Silicon Valley firms in America and elsewhere in the developed world would have remained in despair, without jobs and a bright future to look forward to in their home countries if not for the rapid growth of tech in the continent.
As Africa’s success continues to grow exponentially, African governments increasingly seek to regulate tech and tap from its huge revenue potential to boost their strained budgets. A good example of this is the Nigerian government’s plan to help creators sell their intellectual property rights.
There are risks to African tech innovation and growth from this interventionism. In spite of this, the tech will continue to provide a better quality of life for Africans and gain monumental ground in every part of the continent.
