Nigeria Leads in African Start-up Funding with $94.9m

Emma Okonji

The Disrupt Africa has revealed that that 210 African start-ups secured $334.5 million worth of investments in 2018, with Nigeria leading other countries as the premier investment destination in the continent.

According to the report, Nigeria secured $94,912,000 funding with 58 start-ups from various sectors.
The firm disclosed this in its annual African Tech Startups Funding Report for 2018.

The report, which tracks total amount of funding raised by African tech start-ups each year, found that 210 start-ups raised a total of $334,520,500 in 2018. This, according to the report, was a substantial leap from 2017.

The number of start-ups that raised funds grew by 32.1 per cent, and total funding jumped by an impressive 71.5 per cent.

A key finding of the report was the emergence of Nigeria as Africa’s start-up funding hub, after years of playing second fiddle to South Africa.

Nigeria topped the list of African start-ups and was closely followed by South Africa, with 40 businesses raising $59,971,000. Kenya ranked third in terms of the number of start-ups that raised funds.

However, other African countries are emerging as more than viable alternative destinations for funding as investors increasingly look beyond the traditional “big three” start-up ecosystems.

This is a trend that has been slowly developing over the last few years.
Whereas in 2015, South Africa, Nigeria and Kenya accounted for more than 80 per cent of total funding raised, in 2018 that fell to 61.8 per cent.

Much of that was attributable to the rise of Egypt as a destination for funding, with the country’s start-ups raising $58.9 million in 2018, clearly establishing Egypt as a leading start-up hub on the continent. Companies in 16 other African countries secured investment.

In terms of sectors, the fintech space continued to dominate, showing a clear favourite among investors with $132.75 million seed fund, accounting for 39.7 per cent of total funds raised.

According to the report, this was an increase on previous years, but nonetheless there are strong signs of progress in other sectors, with multiple edu-tech, e-commerce, e-health, transport, logistics and agri-tech startups raising funding as investors saw opportunities in a large number of areas.

Analysing the report, the Co-founder of Disrupt Africa, Gabriella Mulligan, said: “It has been an incredible year for tech start-ups in Africa – and it’s a real pleasure to release this report and the impressive figures it contains. The continent’s entrepreneurs have grabbed the attention of investors, accelerators, and media both locally and globally this year with their innovative solutions and business models, and it’s great to be able to report on such strong results across our ecosystem.”

Another Co-founder, Disrupt Africa, Tom Jackson, said: “The African tech space continues on its upward trajectory, with more start-ups than ever before securing record levels of funding in 2018.”