Africa's top venture rounds in the first half of 2020
Africa has been increasingly attractive as a VC investment destination in recent years and the trend continues through H1 2020
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This post explores findings from a new report on 2019 VC funding in Africa and highlights the top VC rounds of this year so far.
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Review: 2014 - 2019
2019 was a record year for venture capital in Africa. There were 139 VC deals completed across the continent for a total value of $1.4 billion, according to a new report from the African Private Equity and Venture Capital Association.
Value of VC deals in Africa, by year:
Despite differences in exact figures, this overall growth trend over the last 5-6 years that culminated in a record 2019 aligns with previously published reports. (See, for example, reports from Partech [PDF] and Briter Bridges [PDF]).
This dovetails well with the thoughts shared by Nigerian serial entrepreneur Sim Shagaya during a recent Invest Africa podcast (the Week 25 podcast of the week) on the evolution of Africa’s early-stage funding landscape:
"Now is a great time … a better time than we've ever been in … Funding is now available to a degree that it never was before.
Given various promising macro trends across African markets (e.g., prevalence of affordable mobile devices, fast-growing smartphone & internet penetration rates, rapid urbanization, a gradual rise of the consumer class, and strong working-age population growth), perhaps the increasing level of investor interest in Africa is not surprising.
On a sector-by-sector basis, however, the level of interest varies, and fintech is widely recognized as the darling of Africa-focused investors. AVCA data bears this out as the fintech sector accounted for the largest share of VC deals by volume from 2014 to 2019.
Share of number and value of VC deals in Africa, by sector, 2014 - 2019
Investor interest has also been quite concentrated in terms of locale. Over half of VC investments between 2014 and 2019 went to just three countries: South Africa, Kenya, and Nigeria. Egypt is a strong #4 however, having gained strong investor attention in recent years.
Top early-stage investment destinations by VC deal volume, 2014 - 2019
As Africa’s digital revolution proceeds across the continent, opportunities continue to abound for both intrepid investors and entrepreneurs. And despite the challenges presented by COVID-19 this year, investors continue to place bold bets on Africa.
2020’s top venture rounds (H1)
As we approach the end of the first half of the year, here’s a look back to some of the largest fundraising rounds that took place in H1 2020:
In February, Jumo, a South African mobile financial services platform raised a $55M venture round ($30-million equity, $25-million debt) from new investors and existing investors Goldman Sachs, Odey Asset Management, and Leapfrog Investments.
Founded in 2015 by Andrew Watkins-Ball, Jumo is a digital finance platform that helps partners build savings, lending, and insurance products for customers across emerging markets.
In February, Vezeeta, an Egyptian integrated healthcare platform raised a $40M Series D round led by Gulf Capital, with participation from Saudi Technology Ventures, BECO Capital, Silicon Badia, Vostok New Ventures, CE-Ventures, and Endeavour Catalyst.
Founded in 2012 by Amir Barsoum, Vezeeta, a ‘ZocDoc for the Middle East & Africa,’ helps patients search, book, and review doctors and medical services.
In January, Flutterwave, a Nigerian payments provider raised a $35M Series B round co-led by Greycroft & eVentures, with additional participation from CRE Ventures, FIS, Visa, Green Visor Capital, Endeavor, Fintech Collective, 9 Yards Capital, 4DX Ventures, and YCVC.
Founded in 2012 by Sam Clarke, Skynamo digitizes paper-based processes, automates administrative tasks, and helps manufacturer, wholesaler, and distributor sales teams with real-time access to customer and product information in the field.
In May, mPharma, a Ghanaian health-tech startup raised a $17M venture round, led by Novastar Ventures, with participation from the UK's development finance institution, CDC Group, and previous investors.
Founded in 2017 by Mounir Nakhla and Ahmed Mohsen (with Mohamed Aboulnaga joining ten months later as a co-founder), Halan provides on-demand transportation with two-wheelers (motorcycles) and three-wheelers (tuk-tuks) with ambitions to expand to commerce 7 payments.
Founded in 2019 by Dr. Abasi Ene-Obong, 54gene is a research, services and development company founded that uses human genetic data from diverse African populations to develop medical solutions.
Although investor interest in Africa continues to be high as evidenced by the funding rounds above, given the absence so far of mega-rounds (like the $200M Interswitch round, the $120M OPay round, and the $100M Andela round that took place in 2019), it’s likely that the total value of 2020’s VC deals will fall short of 2019 figures.
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