About Africa #21: Startups and Unicorns
Previously, we featured entrepreneurship in Africa, which is the highest rate in the world. A combination of a young population and lack of employment opportunities has driven Africans to start businesses. It is a true example of turning lemons into lemonade.
Now let's look at startups and so-called "unicorns" in Africa.
How African startups raised funding in 2023
Data trackers set the amount raised by African startups in 2023 at between $2.9 billion and $4.1 billion, down from $4.6 billion to $6.5 billion in total funding the previous year.
This article from Tech Crunch summarizes reports from three different trackers on the performance of African startups.
2022 was a record year for African startups, and last year the continent (along with the rest of the world) has seen a tumble in funding, after a rapid rise in US central bank policy rates.
The chart above was published in an article called, From Hot Rise to Cold Reality: An In-Depth Look at Africa’s 2023 Startup Funding Freeze which offers a thorough analysis of the African startup scene.
There is no shortage of information, websites, podcasts on African startups. One of them is a television series which started about the same time as the African Lions Fund was launched, in September of 2020.
Their vision:
StartUP Africa is a ground-breaking television series that documents the effort to bridge the digital divide between Africa and the rest of the world. This effort is led by young entrepreneurs, men and women, who are breaking stereotypes and building the future of Africa. The series celebrates and promotes diversity and the inclusion of sub-Saharan Africa as an integral and critical part of the future of the global tech industry.
Each episode is under 30 minutes long and features stories of entrepreneurship from different sub-Saharan countries. Here's the pilot episode: StartUP Africa, E-Pay, S1, E1 (voaafrica.com)
You can also find them on Youtube:
This site maintains a spreadsheet list of nearly 300 podcasts relevant to the African startup industry: African VC & Startup Podcasts | Dream VC (dream-vc.com)
The African Private Capital Association keeps track of private capital investments statistics in the continent and helps promote more activities via their events and courses. The image below is one sample of the data they have on their site.
African Unicorn: How Many in Africa Today?
Homegrown African VCs emerge to fill in the gaps foreign investors cannot
In the short period that these programs have been active, their efforts are beginning to show signs of success. Ai said that Dream VC’s alumni base of more than 170 African-focused investors — mostly Africans, including some from Somaliland and Algeria, and the African diaspora — are now in a position to drive a huge impact as they launch funds or are involved in investment firms that are making huge waves across the continent.
On International News . . .
Visa and Mastercard are pouring money into Africa
In 2023, Visa launched its Africa Fintech Accelerator program, just six months after the Mastercard Foundation announced a fund to invest in early-stage companies through local firms.
Last month, Mastercard agreed to buy a 3.8% stake in the mobile money business of Africa’s largest telecom, MTN, for $200 million. The company has a similar stake in Airtel Africa’s mobile money operations.
Local entrepreneurs and experts say these moves will help Visa and Mastercard stay relevant in Africa — at a time when users are moving towards digital wallets and quick codes.
Below is a video with highlights of the Africa Startup Festival 2023 which saw over 3,658 individuals from six different countries, including 1,953 startups and 65 investors get together for discussions, workshops, and future collaborations. Indeed, tickets are already on sale for Africa Startup Festival 2024 this coming November.