The African Startup Ecosystem in 2020

Despite COVID, 2020 was a record year for investment into the African tech startup ecosystem, with more startups raising more money and from more investors, than ever before. This is according to the sixth edition of the annual African Tech Startups Funding Report 2020 released by startup news and research portal Disrupt Africa. The report finds that 397 startups raised US$701.5 million in total funding. Both these figures are up substantially on the previous year. The number of funded startups increasing 27.7% over 2019, and the funding grew by 42.7%. Disrupt Africa’s report also shows that at least 370 active investors were involved – a 42.8% growth on 2019 with 261 investors. 2019 figures were a 68.4% rise on the 155 investors identified in 2018. Kenya, Nigeria, SA and Egypt accounted for 77% of funded startups and 89.2% of total investment. Nigeria (85), Egypt (82) and South Africa (81) lead the way from a ventures perspective, but when it comes to total combined raised capital Kenya was Africa’s leader, with its startups raising over US$190 million in 2020.

Innovation hubs have also developed. In 2020 Pan-African hubs innovation network AfriLabs added an additional 27 new members to expand its total membership to 225 across 47 countries. Founded in 2011, AfriLabs is the network of technology innovation hubs on the continent, aiming to support the growth of hubs and their communities and create high potential entrepreneurs that will stimulate economic growth and social development in Africa. The new additions mean AfriLabs has added 8 new cities plus one country – Cabo Verde.

AfriLabs has joined with the Ecommerce Forum Africa in planning a series of events over the next years to assist ecommerce businesses to understand and benefit from the AfCFTA. AfriLabs and the EFA have applied for assistance from the UN Economic Commission for Africa to run these events. More information to follow.