Investment platform Partech, in its 2020 report stated the growth in the African technology sector, as more deals are closed.
It noted that despite fights against a pandemic, the tech bubble is going on strong, and gets a boost from the rapid adoption of digitalisation by foundational economic sectors.
READ ALSO: Mixta Lists ₦1.66 Billion Series 33 Commercial Paper On FMDQ
Growth in Equity Rounds
It was observed that more startups closed more deals in 2020 than in 2019.
In comparison, deals closed in 2020 were 359 by 347 startups, while in 2019 there were 250 rounds. This represents a +44 percent growth on a year-on-year basis.
Another indicator of growth is the seed deals that have hit 228 deals which represent a year-on-year increase of +80 percent.
Pandemic Effects on Funding.
The continuous growth in the amount raised by startups in the African tech space has dented by the drop in funds raised in 2020.
Startups raised a total of $1.49 billion in 2020, a contrast to the $2-billion-dollar mark it hit in the previous year, representing a drop of -29 percent, as stated in Partech’s report.
What was explained as the possible reason for the drop in funding was linked to the scarcity of mega-round funding.
READ ALSO: The Reckitt Global Hygiene Institute Launches Fellowship Programme
Tech’s Resilience
With a high demand for tech support during the pandemic, as corporations ensure that in-person contact was limited, the tech space has continued to thrive, with the pandemic causing breakthroughs for many.
Some facts from the report:
Funding by Countries: Nigeria tops the list of African countries with the highest total funding from investors.
However, Egypt beats Nigeria on the list of equity deal count with 86 deals, which is representative of a +83 percent Year-on-Year growth. The report stated that 4 countries received 80 percent of the capital invested but in getting funds, 26 countries have been beneficiaries.
Funding by Sector: Leading on the board is the Fintech sector in equity funding, taking 25 percent of the total amount. In the agritech sector, there has been significant growth in the digitalisation of that sector, attracting a total of $179 million.
Following Agritech is Logistics & Mobility, attracting $157 million; while offgridtech and healthtech attracted $148 million and $141 million respectively.
Funding by Gender: There was a 4 percent drop of funds raised at rounds for startups with female founders.
In 2019, 17 percent of female founders made up the total, while 13 percent were able to compete for investors’ capital in 2020. In terms of equity funding, there was a 1 percent increase, with female founders making up 14 percent of equity funding.
Investors in Funding Rounds: There has been a +24 percent increase Year-on-Year in the number of VCs.
Who Is Partech?
It is an investment company based in San Francisco and Paris, supporting entrepreneurs from the seed stage to the venture stage and ultimately to the growth stage.
The firm has invested in 82 startups in 24 countries across continents including America, Europe, Africa, and Asia while realising $1.3 billion in total exit value in 2020.
Its Growth Measurement Model
The Partech Africa annual report uses the same model it had started with, covering equity deals in both digital and tech spheres, lasering-in on funding rounds that are above $200,000.
In Africa
Partech remains the Africa’s lasrgest VC fund, with its headquarters in Dakar, Senegal.
