When it comes to startups, it turns out South Africa has the largest, Nigeria the most and Kenya the highest total startup investments testament to the fact that startup investments vary widely across Africa.
This is according to research by startup funding platform VC4Africa and VC4Africa co-founder Ben White shared these insights today at the 2015 Global Entrepreneurship Congress in Milan, the world’s premier annual gathering of startup champions, with attendees from over 150 countries.
End of 2014, VC4Africa was able to track 104 investments in startups across Africa listed on its platform, with a total amount of USD 27 million. Out of the 104 tracked investments, most were in Nigeria (24), followed by Kenya (19), Tanzania (12), South Africa (11), Ghana (10), Uganda (10), Cameroon (9) and Egypt (9). Countries like Nigeria, Kenya, South Africa and Ghana are often named as examples of startup hotspots in Africa. Nigeria, coming out as the continent’s top startup investment destination, recently got more and more attention, for example with new incubators opening and the two most recent DEMO Africa events.
When looking at the averages of tracked startup investments in the 8 mentioned countries, we see the largest average investment in South Africa (250K), directly followed by Kenya (slightly lower, rounded off 250K as well). Behind this are Uganda (152K), and – at a distance – Tanzania (66K), Ghana (65K), Nigeria (57K), Egypt (42K), and Cameroon (28K).
It is known that South Africa’s startup scene includes more mature ventures and explains the bigger ticket sizes. The research indicates this is also the case in Kenya, and that startup investments in other ‘startup hotspots’ Nigeria and Egypt are much smaller on average. Certainly the volume of deals in Nigeria points to the quick rise of the startup scene there, and the promise for much bigger deals expected to happen in this market the coming period.
The sum of all tracked startup investments is highest in Kenya (4.7M). After this South Africa (2.8M) is followed by Uganda (1.5M) and Nigeria (1.4M) at some distance, followed by Tanzania (788K), Ghana (648K), Egypt (381K) and Cameroon (251K). The high sum of investments in Kenya corresponds with this country being considered one of Africa’s ‘startup hotspots’.
VC4Africa Co-Founder Ben White explains: “The research shows there are a growing number of businesses that are successfully growing their operations over time and adding much needed jobs to the African marketplace. This is a key message to investors. Now is the time to get involved in this space.”
Some African startups that have raised funding include TopCheck, Tugende, IroFit, Ubongo, Soko, Karibu Solar,Njorku, Kiro’o Games and many others. They are early stage ventures that require investments less than USD 1 million. Each venture is scalable, makes smart use of technology, or is disruptive in their application of a business model. Think innovations such as a touch sticker, a platform for social gaming, mobile payment startups, recycling waste for street lamps, edu tech ventures, messaging and other apps, and more.
