5 key themes that emerged from Africa's startup ecosystem in the first half of the year

A quick retrospective on key ecosystem events & trends from January to June 2021.

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2021 has been a blockbuster year for venture capital investment globally. VCs invested an all-time H1 record ~$290 billion into startups worldwide in the first six months of the year, according to data from Crunchbase & CB Insights.

And, not to be left behind, Africa’s startup ecosystem is also experiencing a banner year. According to data from industry analysts1, African startups raised ~$1 billion in the first half of 2021, a significant acceleration from the same period in 2020.

While entrepreneurs & VCs may prefer looking up and to the right, here’s a quick look back at five key themes that emerged from the African startup ecosystem in the first half of the year.

1. The African startup ecosystem takes a center-stage seat in global media

“When a child washes his hands, he can eat with elders.” — Igbo proverb

At the start of the year, Tage Kene-Okafor, formerly with Nigerian media outlet Techpoint, joined Techcrunch, the leading global tech media platform. Quantitatively, Techcrunch’s Africa-focused coverage consequently rose +60% from H1 2020 to H2 2021. And qualitatively, there’s been greater diversity in the type of stories reported on. (According to marketing analytics firm Similarweb, Techcrunch received ~16M unique visitors in June, compared to ~194K for Techpoint.)

Similarly, Abubakar Idris, previously affiliated with a variety of media platforms including Nigeria’s TechCabal, joined Rest of World to cover Africa.

More global media coverage & exposure means more awareness, interest & credibility, and it bodes well for the ecosystem at large.

2. The rise of mega-rounds & African unicorns

"What was secret is revealed in the marketplace." — Igbo proverb

In the fintech sector, H1 2021 saw digital bank TymeBank’s February $109M round; payment platform Flutterwave’s March $170M Series C round, co-led by Tiger Global and Avenir Growth Capital; and cross-border money transfer firm Chipper Cash’s May $100M Series C round, led by SVB Capital. (Payments-focused super app OPay is rumored to have raised(?) quite a significant amount as well.) And outside of fintech, data analytics company Gro Intelligence’s January $85M Series B round, co-led by Intel Capital, Africa Internet Ventures, and the family offices of Ronald Lauder and Eric Zinterhofer, shouldn’t be ignored.

After these mega-rounds, there are now more African unicorns than there were at the end of 2020. Today, Jumia & Fawry are valued by public markets at over $1 billion, while Interswitch and Flutterwave have achieved this standing in the private markets. It’s probably fair to add Chipper Cash and OPay to the list of private African unicorns, but notably, Chipper Cash’s CEO declined to comment when asked directly about the firm’s valuation, and there seems to be no further public information about OPay’s rumored May round. (It’s worth noting also that Paga is perhaps on the cusp here as well.)

As the continent produces more unicorns and billion-dollar public companies, the continent’s attractiveness as a destination for global capital will undoubtedly increase.

3. Egypt’s ascent

"Whenever you wake up, that is your morning." — Igbo proverb

It’s morning in Egypt as its ecosystem has grown rapidly to become one of the continent’s most vibrant. In the first half of the year, ~50 deals were announced in the country, comprising well over $100M total.

In April, for example, digital payments provider Paymob raised an $18.5M Series A round that was hailed at the time as the largest Series A round in Egypt. And just two months later in June, tech-enabled B2B logistics platform Trella raised a $42M Series A round ($30M equity / $12 debt).

Moreover, Egypt-focused funds announced nearly ~$300M of dry powder in H1 2021. These include Algebra VenturesSawari Ventures, GIZ’s VC University, and Flat6Labs.

An ‘also-ran’ not too long ago, Egypt is on pace to overtake, in short order, Kenya as the continent’s third most attractive market for early-stage investment capital.

4. Francophone Africa demands attention

"No one gets a mouthful of food by picking between another person's teeth." — Igbo proverb

In years past, one might be hard-pressed to simply name significant occurrences in Francophone Africa’s startup ecosystem, but change seems to be afoot. In February, Cameroonian B2B fintech startup Diool raised $3.5M, and Maviance, another fintech player in the country, raised $3M a few months later. In March, Djamo, an Ivorian challenger bank, became the first startup from the zone to pitch at Y Combinator’s Demo Day; and the young fintech just reached 100,000 Android downloads in June.

And in April, Ivorian online marketplace Afrikrea announced a partnership with global firms DHL and Visa to launch ANKA, an omnichannel platform. (See CEO & Co-Founder Moulaye Tabouré’s '5 years of Entrepreneurship').

Also in Ivory Coast, Orange Bank Africa, the new digital bank from French telco Orange, announced in April that it reached 500,000 users and it announced in June that it disbursed over $80M in loans in ten months of operations.

Speaking of Orange, the spat between Orange Senegal and fintech startup Wave reverberated across the ecosystem in June. And elsewhere, Gozem, a super app offering ride-hailing, e-commerce, and fintech services in Togo and Benin, expanded into Francophone Central Africa in May; it also announced it completed 4 million lifetime trips.

While South Africa, Nigeria, Kenya, and Egypt tend to dominate the continent’s startup ecosystem, opportunities abound elsewhere, and the Francophone region offers certain advantages to those that can navigate the space.

5. 'Community capital' continues to climb

“No load is too heavy for ants.” — Igbo proverb

Whereas large institutions propel mega-rounds, individual investors are coming together to form investor syndicates. Perhaps leading the charge is Iyinoluwa Aboyeji’s Future Africa Fund, but there’s also Hayden Simmons’ Rally Cap Ventures, DFS Labs’ Sufficient Capital, Jason Njoku’s Investzilla, Bosun Tijani’s CcHub Syndicate, Nubi Kay' and Joe Kinvi’s HoaQ Club, and Obi Anusiem’s Club 14, among others.

These syndicates generally allow individuals to access ecosystem deal flow & high-quality analysis for a minimum of ~$3,000-$5,000 per deal.

But 'community capital' takes another form as well: traditional crowdfunding. For example, in April, Asaak raised ~$900,000 via a crowdfunding platform. And IrokoTV will soon launch its public crowdfunding campaign on Seedrs.

The democratization of access to early-stage startup equity and the increasingly important role of non-traditional sources of ‘venture capital’ is a trend that is sure to continue across Africa’s startup ecosystem.


There it is…the history of the first-half 2021 hunt, as told by your humble author. It’s a subjective and non-comprehensive list, and I’d love you to tell me where you differ. 👂

"There is that great proverb — that until the lions have their own historians, the history of the hunt will always glorify the hunter." — Chinua Achebe, in this 1994 Paris Review interview.

1

According to H1 2021 deal data from Briter Bridges and Africa: The Big Deal