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18 February 2022

A great year for African Tech

African tech start-ups raised over $2 billion dollars in 2021, a 206% increase from 2020, according to Disrupt Africa’s recent funding report. Nigeria, Egypt, South Africa, and Kenya were the premier investment destinations on the continent and fintech remained the most invested sector. Of the 564 tech start-ups harnessing the investment, 5 achieved Unicorn Status (up from 0 in 2020). They were: Flutterwave, a provider of payment infrastructure for the continent; OPay a mobile-based platform for payment transport and delivery; Chipper Cash, a money transfer app; Wave a mobile money app and Andela, a HR-tech unicorn which aims to pair African IT talent with a growing global IT demand.

Despite a record year of private equity funding for Africa start-ups, there are still perhaps some gaps. Disrupt Africa reports the average investment in each start-up in 2021 was around $3.8 million dollars. It is clear that in order to grow into global businesses, the more established start-ups require much larger sums to drive growth. The FT spoke with Niklas Adalbarth, the co-founder of Klarna (market cap: $45.6bn), who is trying to address this gap in growth capital investment. Adalbarth, along with dozens of tech executives have started a fund looking to raise $2 billion to find and support the next tech Unicorns. Buchanan expects to see the growth in private equity investment to continue into 2022 as Africa’s tech sector expands in both depth and breadth.

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