[African Startup Review] Pie Kamau: Capital funding for tech startups gain momentum in 2022
The startup ecosystem in Africa is taking shape. A lot of technological innovations especially in the areas of fintech, e-mobility, e-commerce, healthtech, foodtech and cleantech have seen accelerated growth towards Africa’s digital transformation and innovation.
These transformations are paramount as they open doors of opportunities for MSMEs, who form a huge portion of the startup ecosystem, enabling them to compete on a global stage which in turn gains them access to new and international markets. Digital transformation also enables organizations and governments to contemporize processes and projects thereby increasing profitability.
In its StartupBlink Ecosystem Index Report 2021, startup ecosystem map and research center, StartupBlink, ranked South Africa as having the most developed startup ecosystem in Africa, ahead of Kenya, Nigeria and Rwanda.
In this edition, we are going to look at some of the African startups that have raised funding this year so far, contributing towards digital transformation and innovation in the continent.
Africa’s mobility tech sector is booming with last mile delivery and e-logistics services gaining momentum. A South African B2B delivery-as-a-service (DaaS) startup Orderin, raised a $4.7 million pre-Series B funding to scale its infrastructure and improve its last-mile delivery service. This funding brought the total funds raised by the startup so far to $19.85 million.
Another African mobility startup that has secured financing this year is Moove, a mobility fintech that provides revenue-based vehicle financing to mobility entrepreneurs across Africa. Moove is Uber's exclusive vehicle supply partner in Africa. The startup secured $10 million financing from NBK Capital Partners to address the continent's vehicle financing gap. Today, Moove also announced a partnership with CFAO Motors to support mobility entrepreneurs in Nigeria and Ghana.
Kenya is also in the bandwagon of mobility sector transformation. Logistics startup Amitruck, raised $4 million seed funding. Amitruck is eyeing market dominance in the Africa trucking and logistics market, which accounts for almost 80 percent of transported goods. The startup will use the funds to accelerate mobility digital solutions across Africa.
The retail industry in Africa has also seen a significant shift with emergence of e-commerce and B2B marketplaces startups which are disrupting the conventional ways of shopping. Retailo, a B2B marketplace startup for retailers in the Middle East, North Africa, and Pakistan (MENAP), raised $36 million Series A funding to empower community commerce in the MENA region. The startup is digitizing the region's retail supply chains.
PwC's 'More in store for African retail & consumer businesses' publication cites that the long-term outlook for African retail and consumer businesses remains positive. Anton Hugo, Retail and Consumer Industry Leader at PwC Africa said: ''As Africa has risen to prominence as an investment destination over the past several years, so the role of retail and consumer goods has taken on greater significance. Sub-Saharan Africa (SSA) remains one of the fastest growing regions in the world and the successful expansion of a number of global and African retailers and consumer goods companies across the region speaks to the opportunities that exist.''
According to Statista, the African online retail has been growing fast in recent years and this trend is forecasted to continue as internet penetration has been on the rise with more people having access to smartphones and internet connection.
Last but not least, the startup ecosystem that is taking the continent by storm right now is the fintech industry. According to Techcrunch, year 2021 saw more and bigger deals closed in Africa as tech startups across the continent raised close to $5 billion, where fintechs dominated the fundraising, accounting for nearly $3 billion.
This year will be no different. Already, there's alot of fintech capital being disbursed to African fintech startups. Some of the beneficiaries include but are not limited to; IMFact, a Kenyan fintech which has received £3 million investment from FSD Africa; BFREE, a Nigerian fintech which has raised $1.7 million pre-series A funding round; Alvin, a Kenyan fintech startup which has raised $740,000 pre-seed funding; Zanifu, a Kenyan fintech that has closed $1million in seed round funding; OZÉ, a Ghanaian fintech that has raised $3 milllion financing; CompariSure, A South African fintech which has raised $980,000 pre-Series A funding; NALA, a Tanzanian fintech which has raised $10 million seed funding and Pyypl, which has sealed $11 million Series A financing round to expand in the Middle East and Africa.
From this review, it’s clear that there's an attractive niche for digital innovation and transformation in the African continent. This has been contributed by Africa's fast growing economies and emerging markets which are boosting the economic growth and industrialization, ultimately transforming people’s lives.