People & MoneyTech

Nigeria Trailed Kenya in Startup Investment in 2020 – Report

A recent report about startup investments in Africa shows that Kenya was the leading African destination for venture capital or startup investments last year.

The findings were reported by Startuplist Africa, based on an analysis of over 350 deals recorded in the African startup ecosystem.

The report focuses on African startups with publicly disclosed funding deals and excludes mergers and acquisitions (M&A).

“All funding data on startups are sourced from publicly verifiable sources like press releases, investors, and sometimes the companies themselves,” Startuplist said in response to a tweet asking about how the dataset was compiled.

Also Read: Funding Opportunities for Businesses

The report shows that Kenya led the way as the top startup investment destination in Africa with $266 million in investments ahead of Nigeria ($237 million), South Africa ($198 million), Egypt ($125 million), and Ghana ($90 million).

Kenya, which secured over 25% of total funding in Africa last year according to the report, has been attractive to investors over the past five years, during which it has raised around $1.09 billion, second to only Nigeria’s $1.74 billion.

Fintech at the top

The top industries that got funding in Africa last year were in fintech, renewable energy, Agritech, and logistics. 

Kenya-based companies including Greenlight Planet, Twiga Foods, Komaza, and others were the top-funded companies in 2020 with the renewable energy industry receiving the most investments, per data from Startuplist.

After Kenya, Africa’s other major tech hub and largest economy, Nigeria, came in second with over 23% share of total investments in African startups, into companies like Lumos, Flutterwave, InfraCredit, Accelerex, and 54Gene. Nigeria’s fintech industry was in the lead, attracting the bulk of the funding.

South Africa was the 3rd leading destination for VC investments in Africa last year. It had over 19% share of total deals, with investments secured by Jumo, Skynamo, Aerobotics, and others. In a rather unexpected development, the software-as-a-service industry got the most funding.

Startups in Egypt’s logistics sector led others in attracting VC investments, helping the North African nation claim over 12% share of total investments in the continent. Companies like Vezeeta, Swvl, and Halan being responsible for the top deals. 

Also Read: Ghanaian Startup OZÉ Secures $700,000 Funding

West Africa’s other notable but burgeoning tech hub, Ghana, ended the year as the 5th most attractive startup ecosystem after claiming a 9% share of overall funding. Chipper Cash closed multiple rounds within the year including a $30 million investment with participation from Jeff Bezos. The fintech industry secured the most funding, similar to Nigeria.

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