African tech startups raise over $700 million in 2020 despite pandemic

African tech startups raised more funding from more investors than ever before in 2020 despite the Covid-19 pandemic.

Despite the Covid-19 outbreak, African tech startups raised a record high of $701.5 million from investors in 2020. This is according to the African Tech Startups Funding 2020 report released by Disrupt Africa.

According to the report, 2020 was a record year for investment into the African tech startup ecosystem, with more startups raising more money, from more investors than ever before.

Specifically, 397 startups raised $701.5 million in total funding in 2020, indicating a 27.7% and 42.7% increase compared to 311 startups that raised $491.6 million in the previous year.

Highlights of the report

• The number of startups that received investments in 2020 grew by 217.6% compared to 125 tech startups in 2015, when the first edition of the report was published.
• Kenya, Nigeria, South Africa, and Egypt remain emphatically Africa’s “big four” from a funding perspective, accounting for 77% of funded startups and 89.2% of total investment.
• Nigeria (85), Egypt (82) and South Africa (81) lead the way from the perspective of the number of ventures.
• However, when it comes to total combined raised capital, it is Kenya that is Africa’s leader, with startups from the East African country raising over US$190 million in funding in 2020.
• The financial technology sector was the most attractive to investors in 2020, with more startups securing funding than any other sector and a combined total that dwarfed all others

Though these markets remain clear leaders, there are signs of growing activity elsewhere on the continent, with startups backed in 24 African countries, up from 19 in 2019, 20 in 2018, and 18 in 2017 respectively.

Meanwhile, a recent report by Nairametrics revealed that African startups raised over $1 billion in funding in 2020, with Nigerian startups raising 17% of the total amount. The report showed a list of notable startups that raised funds in the year, some of which include; Flutterwave, 54gene, Aella Credit, Helium Health, Kuda Bank amongst others.