Emerging Markets Spotlight: Africa
We’re thrilled to present the third of four installments at Conduit that focus on emerging markets, detailing vertical-agnostic startup leaders in distinct regions. In the third part of our series, our team at Conduit sat down to evaluate the rapidly expanding tech ecosystem in Africa.
In this report, we focused on three regions: South Africa, Nigeria, and Kenya. In the first quarter of 2020, African startups collectively raised over $350m. This figure has grown significantly since the reported $300m a year prior in Q1 2019. Broken down by region, South Africa led total funding with $112m, Nigeria with $74m, Kenya with $62m, and Egypt with $51m.
In South Africa, after Jumo’s monumental raise in Q1, the pandemic and its accompanying lockdowns reduced the increased rate of free-flowing investments. Since March, most African businesses, including startups, have struggled. Despite feeling similar effects of the lockdown, Nigeria plays the leading role as Africa’s unofficial capital for fintech investment and digital finance startups. Finally, in Kenya, fintech continues to have the most representation (Cellulant, CarePay, AZA Group), followed by energy and environmental tech (M-Kopa, Powerhive), with e-commerce trailing at (Twiga Foods, Copia Global) at about $33.3m raised in the last year.
JUMO, founded in 2014, is a fintech platform for mobile network operators and banks. The platform facilitates digital financial services (credit and savings) in emerging markets by way of USSD short codes. In February, the company closed a marquee $55 million financing round.
RapidDeploy, founded in 2014, offers cloud-based software that enables public safety officials to reduce emergency response times and improve situational awareness. Launched in Cape Town by Steven Raucher and Brett Meyerowitz, the startup landed a $12 million round back in 2019.
Droppa, founded in 2016 by Khathutshelo Mufamadi, is a Johannesburg based on-demand platform for trucks and bakkies. The company closed a multi-million round from IDF Capital in late 2019. The web platform and app allows members of the public, and now retailers as well, to source trucks and bakkies to deliver goods on their behalf.
Flutterwave, founded in 2016 by Iyinoluwa Aboyeji and Olugbenga Agboola, allows clients to tap its API to facilitate payments for African companies to pay companies in other continents and abroad. In January, the company announced a $35 million Series B financing along with new partnerships with payment processing giants WorldPay and Visa as it preps to scale.
Helium Health, founded in 2016 by Tito Ovia, Adegoke Olubusi, and Dimeji Sofowora, offers an EMR system that eliminates paper records in healthcare facilities along with the risks associated with them through a line of automated processes. In May, the company announced its Series A round of $10 million. The round was co-led by AAIC and Dubai-based, MENA-focused Global Ventures with participation from YC and Tencent.
54gene, founded in January 2019, is a biotech and genomics platform that offers genetic testing and molecular diagnostics services to Africans while unlocking vital health information. In April, the company secured a $15 million Series A round led by Adjuvant Capital with participation from Y Combinator, Fifty Years, KdT Ventures, Better Ventures, Aera VC and Pioneer Fund.
Celluant is a digital payments platform that recently launched its multi-function consumer app Tingg, which serves as a solution to the fragmentation in the African digital payments space by merging payment, commerce and financial services into a single platform. Since its founding in 2004, Cellulant has raised $55 million in funding across three separate rounds.
CarePay, launched in 2015, is an e-health enterprise focused on driving healthcare inclusion across Africa. The company raised a $45 million Series A with PharmAccess Group and ELMA Investments on the cap table. In a bid to improve the M-TIBA platform, CarePay plans to layer on blockchain, AI, and ML capacities over its core enterprise healthcare platform.
Twiga Foods is a mobile food delivery application that links farmers and vendors to fair, trusted, modern markets. Across three rounds, the company has raised over $44 million with IFC, Google Launchpad, and Wamda among the notable investors. Since its founding in 2014 by Grant Brooke, Twiga now works with 17,000 farmers while continuing to scale rapidly.
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As we scale our platform, understanding key market shifts across verticals will become increasingly vital. Our team will be digging deeper into emerging trends and first movers in the coming weeks, which you can find here.