Africa’s Tech Start-ups Attracted US$2bn Investment in 2021

Investment into the African tech start-up ecosystem trebled over the course of 2021 that saw total funding pass the US$2-billion mark for the first time.

This is according to the seventh edition of the annual African Tech Startups Funding Report released by Disrupt Africa in partnership with Novastar Ventures, MFS Africa, Quona Capital, 4Di Capital, MEST Africa and Future Africa.

The report states that overall, 564 start-ups raised a combined US$2,148,517,500 in 2021. The number of funded start-ups grew by 42.1% on 397 in 2020, and the funding total was more than treble – up 206.3% on the US$701,460,565 banked the previous year.

Egypt, Kenya, Nigeria and South Africa have been identified as the ‘big four’ from a funding perspective, securing a greater share of total funding between them than in 2020.

Nigeria has taken top spot with 161 start-ups raising a combined total of more than US$900-million.

In December 2021 Nigeria’s government, in conjunction with industry leaders, released a statement detailing progress with the Nigeria Startup Bill (NSB).

The legislation is expected to reinforce the country’s start-up ecosystem and address issues like weak infrastructure, access to capital and disruptive regulation.

Though Nigeria and the rest of the “big four” remain clear leaders, there is still plenty of activity elsewhere on the continent, with start-ups backed in 24 African countries.

“Momentum has been building in the African tech space for quite some time now, and 2021 will be remembered as a watershed year.

“Breaking not just the US$1 billion but the US$2-billion mark, creating more unicorns, and about doubling the number of active investors – it was a very good 12 months indeed. It is still just a beginning, however, and there is plenty of room for more growth,” said Disrupt Africa co-founder Gabriella Mulligan.

Steve Beck, managing director at Novastar Ventures, said, “We have been investing in start-ups on the continent since 2014 and are encouraged by the tremendous growth of the venture ecosystem since then. Nevertheless, as start-ups move from proof-of-concept to scale, capital remains scarce.

“Disrupt Africa’s annual funding report is a critical resource for founders as they climb and navigate a capital ladder that still has missing rungs. We are delighted to partner with the team at Disrupt Africa to ensure their research is accessible to all entrepreneurs.

“The data and insights in the report are a vital resource, not just for charting the development of the venture ecosystem in Africa, but for supporting it.”

MFS Africa founder and CEO Dare Okoudjou said the African tech ecosystem had experienced unprecedented growth, breaking records year after year.

“It’s the clearest indicator that we are reaching an exciting inflection point in our sector. In the last quarter of 2021, we raised US$100-million in Series funding to accelerate our growth as we make borders matter less.

As such we understand the importance of the right funding to build the fundamental infrastructure needed to facilitate interoperability across payment schemes, borders, and currencies.

“Accurate and informative reports about the ecosystem raise the profile of our sector beyond Africa, and that interest helps to channel much-needed investments in impactful start-ups.”