With 1.16 billion raised in favor of African tech start-ups, the year 2018 reflects the exponential interest granted by investors to the African continent, according to the third report of the investment fund Partech.
+ 108% of investments with 1.16 billion dollars raised in 2018, 146 start-up companies compared to 124 in 2017, 70 series of A or B series … African tech start-ups have had the wind in their sails, if although the investment fund Partech speaks of a 2018 year “monumental” for fundraising.
To scrutinize this “record” year presented in the third annual report of the investment fund Partech, the two rapporteurs, Cyril Collon and Tidjane Dème, have followed the same methodology as the two previous years: they have booked the raising in equity only , for amounts between $ 200,000 and $ 100 million, by tech star-ups having their main market on the continent.
“It’s just amazing. In 2015, when we started to work on a fund dedicated to Africa, we had forecast that the billion dollars would be reached in 2020. We are already two years ahead of our forecasts, “comments Cyril Collon in the report. . In 2016, levees had increased by 33% over the previous year, then in 2017, by 53% compared to 2016, and now by 108% in 2018, which represents a 4-fold increase in investments over the years. last thirty-six months.
Proof that small African start-ups are growing and inspiring more and more confidence: among the 164 rounds counted in 2018, 70 (against 48 in 2017) are phase A and B, for a total amount of 482 million dollars (+ 58%), and 14 are growth drives (compared to 7 in 2017), for a total amount of $ 602 million (+ 102%). In this sense, the report notes that private equity groups (Helios, Goldman Sachs, Carlyle) as well as large private companies (Naspers, Paypal, Pernod-Ricard) are now investing earlier, in start-ups still in business. growth phase.
Kenya, Nigeria and South Africa leading
As was the case last year, Kenya, Nigeria and South Africa account for the vast majority of funds invested (78%). In 2018, their start-ups attracted $ 994 million out of the $ 1.13 billion raised in the 19 countries of the continent where over $ 200,000 worth of rounds took place. Behind them, Tanzania and Egypt, followed by Senegal, the first French-speaking state and seventh in the rankings.
The biggest fundraiser of the year was made by the German start-up Frontier Car, a specialist in used car sales and established in Nigeria, with 130 million raised in two rounds. Next come Webuycar in South Africa ($ 98 million) and Tala in Kenya with $ 50 million.
As the year before, it is the fintechs (Tala, Cellulant, Mines, Jumo …) that attract the majority of funds with 50% of investments. On the other hand, the B2B / digital adaptation sector, third in 2017, is gaining a share, draining 30.4% of funds (Twiga Foods, Frontier Car, Kobo 360, etc.), while digital consumer and telecommunications services are falling back from 42% of the funds raised in 2017 to 19.6% of the funds raised. In absolute terms, however, they remain relatively stable, rising from 235 to 228 million dollars (-3%).
“B2B models are naturally attractive to entrepreneurs […] it’s reassuring for investors,” commented Tidjane Dème in the presentation of the report.