Disrupt Africa has this week provided some insight into the continent’s startup funding environment during 2020, with its free-to-download African Tech Startups Funding Report. While the COVID-19 pandemic has impacted many industries, the findings of the report show some positive signs as far as the startup ecosystem in Africa is concerned.
To that end a total of 397 startups on the continent raised a combined total of $701 460 565 (~R10.65 billion) during the last calendar year. It is a record-breaking figure, and by some margin too, increasing 42.7 percent compared to the figures from 2019, along with 27.7 percent more startups securing funding during the same period.
While those figures are very promising, Disrupt Africa does point to another key finding of the report as the majority of funding happened in four countries – South Africa, Kenya, Nigeria and Egypt.
It is perhaps unsurprising to see those four figure extensively in the report, especially as they account for 307 of the 397 that Disrupt Africa drew stats from.
This unfortunately highlights a disparity in terms of how startups are not only dispersed across the African continent, but also that much of the money being raised remain in those economic hubs. More specifically, the funding from startups in those four countries accounts for 89.2 percent of the $701 million total.
Interestingly though, looking closer at the numbers, Disrupt Africa found that fewer startups secured funding in the top country in the report – Kenya – with its 59 startups securing $191 million. Showcasing that the East African nation is indeed the leading hub as far as startups on the continent goes.
With 2021 seeing the fight against the pandemic continuing, so is the desire to digitally transform and disrupt industries where possible. As such we should see an even greater hunger for startups with innovative solutions in the coming year.
Here’s hoping though, that the lion’s share of startup funding does not remain with the four usual suspects.
To read the report in full, as well as find out its insights from it, head to Disrupt Africa’s portal here.