Flagging. That’s how we would describe the African tech startup funding scene in 2023.
Global macro headwinds saw investors cut fewer checks and some reportedly backed down from commitments, forcing a slew of startup shutdowns and downsizing.
While on the surface, it seems Africa’s VC funding figures fell far from 2021 and 2022 levels, available estimates suggest the continent’s startups still managed to attract more than $5 billion.
Before the year’s scorecards start to roll out, we take a look at the top 10 largest fundraising rounds in the African tech startup industry this year and the trends they reveal.
Fewer mega-deals (just four >$100m rounds vs nine in 2022):
This signifies a shift towards cautious optimism from investors.
While big bets still happen, they’re rarer, with investors preferring to spread their bets on multiple promising startups.
This could lead to a more sustainable ecosystem, with startups forced to focus on stronger fundamentals and traction before securing large funding rounds.
MNT-Halan‘s $400 million round in Egypt and M-KOPA‘s $250 million in Kenya are rare exceptions, highlighting their established market positions and potential for significant impact.
Fintech takes the top spot but the landscape is more diverse:
Fintech remains a dominant sector due to its potential to address financial inclusion challenges in Africa.
However, other sectors like cleantech and mobility are gaining traction, indicating diversification in investor interest.
This diversification can lead to a more balanced and resilient ecosystem, as the success of the startup scene is not solely dependent on one sector.
The presence of Husk Power, Wetility, Nuru, Planet42, and Moove in the top 10 shows the growing importance of these sectors in attracting investor attention.
The rising prominence of debt + equity rounds:
This hybrid approach combines the flexibility of equity with the stability of debt, offering startups a more tailored financing solution.
It can be particularly useful for startups with strong revenue models but limited access to traditional equity funding.
This trend could democratize access to funding for startups, especially in emerging markets, as it caters to startups at different stages of growth and risk profiles.
MNT-Halan, M-KOPA, Planet42, and Moove all used debt + equity rounds, demonstrating the growing popularity of this approach.
Geographical distribution
The top 10 deals primarily focus on South Africa, Kenya, and Nigeria, showcasing the continued dominance of these countries in the African startup scene.
The Democratic Republic of Congo (DRC) emerged as a surprise entry in the top 10 thanks to Nuru‘s sizable Series B round.
Series B dominance
The majority of deals being Series B raises indicates a focus on mature startups with proven traction and scalability, further highlighting likely investor risk aversion.
Overall, the top 10 fundraising rounds paint a picture of a resilient African tech ecosystem adapting to a challenging global environment.
While mega-deals were scarce, the diversity of sectors, financing models, and geographical representation suggests potential for sustainable growth in the long term.
Stay tuned to our blog for a broader piece that explores standout trends in Africa’s tech landscape in 2023 and our high-conviction themes for the new year—to be published soon!
Venmo, Cash App, and Zelle are familiar names in the world of mobile-based digital payments in the West, having revolutionized how money is transferred and received by millions of people.
But did you know that Africa has been ahead of the game with its own mobile money systems since as far back as 2007?!
That’s right.
Today, we take you on a journey of how Africa became the biggest mobile money player in the world.
Where it all began
Once upon a time, not too long ago, accessing financial services was a challenge for many Africans. Unlike in the U.S. or Europe, traditional banking services were often very limited, especially in remote and rural areas.
But then mobile money.
In 2007, Safaricom, a leading mobile network operator in Kenya, launched a mobile money service called M-Pesa. Little did they know that this innovative concept would spark a digital revolution that would sweep across the continent.
M-Pesa, meaning “mobile money” in Swahili, allowed users to save, send, and receive money using just their mobile phones. This groundbreaking innovation proved to be a game-changer, enabling people without bank accounts to participate in the formal financial system.
In 2007, Safaricom, a leading telecommunications company in Kenya, launched a mobile money service called M-Pesa. Image credit: African Markets
The initial idea behind M-Pesa was to create a convenient way for Kenyans to transfer money securely. The service quickly gained popularity, as people in remote areas, where traditional banking services were scarce, embraced it as a means to conduct financial transactions with ease.
In no time, mobile money took root and started to grow, not only in Kenya but also in neighboring countries.
M-Pesa was launched in Tanzania the following year and is now present in at least 10 countries.
So, what made mobile money so popular?
Well, let’s unravel its magic!
Imagine a scenario: a hardworking individual in a rural village wants to send money to their family in the city.
Historically, this would involve a long and costly journey, with the risk of loss or theft. But with a mobile money account, a few taps on a phone screen can instantly transfer funds to their loved ones, efficiently.
One of the key factors that contributed to the rapid adoption of mobile money was its simplicity: all you needed was a basic mobile phone, and suddenly, you had a bank in the palm of your hand.
No more long queues or complicated paperwork. Money transfers could be done with a few simple clicks.
For deposits and withdrawals, mobile money agents, often found in local shops, act as the bridge between the digital and physical worlds, allowing users to convert cash into digital currency and vice versa.
An M-Pesa agent attends to a user. Image credit: HBS Digital Initiative
By 2010, M-Pesa had acquired 10 million active users and by 2016, it served almost 29.5 million active customers through a network of more than 287,400 agents. In the same year, the service processed around 6 billion transactions, peaking in December at 529 transactions every second.
The success of M-Pesa in Kenya sparked a wave of enthusiasm. As word spread about the convenience and reliability of mobile money, its impact began to reverberate throughout the continent.
Impressed by the service, other African countries eagerly jumped on the mobile money revolution, building theirs in M-Pesa’s image.
Over the next few years, the service spread to countries like Uganda, Ghana, Rwanda, and South Africa as mobile network operators and financial institutions started realizing the immense potential of mobile money.
MTN launched its MoMo service in Uganda in March 2009 and in Rwanda in February 2010. Telesom ZAAD in Somaliland in 2009 and Hormuud launched EVC Plus in Somalia in 2011.
By 2011, more than 100 mobile money services were operating in Africa, reaching people who previously had limited access to formal financial services.
Africa continues to lead global adoption
Fast forward to today, more mobile money services have emerged in Africa while mobile money accounts and transaction value on the continent continue to skyrocket.
Africa accounted for up to 70% of the world’s $1 trillion mobile money value in 2021 after mobile money transactions on the continent jumped 39% from $495 billion in 2020 to $701.4 billion.
Last year, that rose a further 22% to a jaw-dropping $836.5 billion (bigger than the GDP of Nigeria, Africa’s largest economy!) but its share of the global $1.26 trillion mobile money value fell to 66.4%.
Per GSMA’s 2023 State of the Industry Report, mobile money is growing faster in sub-Saharan Africa than in other regions except for the Middle East & North Africa.
However, it’s not just about the numbers
Perhaps its greatest achievement, mobile money has brought financial inclusion to millions of Africans who were previously excluded from the formal economy.
Data from the World Bank shows that around 45% of people living in Sub-Saharan don’t have access to a bank account. But mobile phones are widespread across the continent and are helping to bridge the financial gap.
As of 2022, Sub-Saharan Africa had up to 763 million registered mobile money accounts, more than double the figures in the next closest region, and more Africans now enjoy access to a whole range of financial services that were previously out of reach.
The innovative service has empowered women entrepreneurs, allowing them to take charge of their finances and contribute to their families’ well-being; facilitated access to education and healthcare; paved the way for exciting innovations such as mobile banking apps and digital wallets.
Beyond money transfers…
Mobile money services in Africa have also quickly evolved beyond simple person-to-person money transfers and cash in-cash out.
Providers have continually expanded their services, introducing innovative features to meet the diverse needs of their users.
For instance, mobile micro-loans and savings accounts empower individuals to access credit and save money, fostering entrepreneurship.
In Kenya, M-Shwari allows users to save money and access micro-loans directly from their mobile wallets, creating opportunities for entrepreneurs and small business owners.
Partnerships between mobile money providers and other companies have expanded the range of services available, with users now able to pay their electricity and water bills via mobile money and purchase airtime from network operators.
Health organizations have integrated mobile money into their operations, enabling payments for medical services and health insurance premiums.
Despite its transformative effect across the continent so far, it’s clear that the mobile money revolution in Africa is far from over.
Innovations continue to emerge, including interoperability between different mobile money platforms, making transactions even more convenient.
The potential for digital lending, savings, and insurance services on mobile money platforms holds great promise for the future.
As the mobile money landscape continues to evolve, so is the competition. Telecom companies, financial institutions, and fintech startups are all in the race to capture a share of this rapidly expanding market.
This healthy competition will only lead to improved services, lower transaction costs, and increased accessibility for users.
The growth of mobile money in Africa is nothing short of awe-inspiring.
From humble beginnings in Kenya, it has spread like wildfire, empowering individuals, driving economic development, and transforming societies across the continent.
As mobile money continues to evolve and expand its horizons, it remains one shining example of how technology is being harnessed to drive positive change in Africa.
The tide is rising for climate tech in Africa. Fueled by a surge in investor interest, the sector is witnessing a wave of innovation, with over 3,000 startups pitching their solutions for a climate-resilient future.
A new report, “Investing in Climate Tech Innovation in Africa,” by Catalyst Fund, dives into the dynamics of this burgeoning sector, offering invaluable insights for investors, innovators, and stakeholders alike.
If you’re a keen follower of the African tech ecosystem, you must’ve heard of the Paystack, Careem, and Opay Mafia(s) by now.
But have you ever heard of the Jumia Mafia?
For people not familiar with the name, though we hope there’s none, let’s give you a brief introduction to the company.
An e-commerce giant
Jumia started as an online retailer in Nigeria in 2012, co-founded by Jeremy Hodara and Sacha Poignonnec, ex-McKinsey consultants along with Tunde Kehinde and Raphael Kofi Afaedor.
The company has since expanded to at least nine other African countries, where it offers several services, including digital payments and delivery.
In April 2019, the e-commerce operator became the first African startup to list on a major global stock exchange when it debuted on the New York bourse.
One fact about Jumia that’s equally as impressive—as its NYSE IPO or standing as the continent’s largest e-commerce operator—but often overlooked is the impact that the company has had on Africa’s entrepreneurial ecosystem.
Meet the Mafia
Jumia has not only made waves in the African tech industry but also inspired a new generation of entrepreneurs who now run their respective exciting startups.
Some of them include:
Tunde Kehinde and Ercin Eksin, co-founded Lidya, a Series B startup that provides SMEs with access to finance. The startup uses a credit-scoring system that analyzes a borrower’s online reputation and has raised $16.5 million since its launch.
Raphael Afaedor is another Jumia alumnus who co-founded Kyosk Digital, a platform that connects informal retailers using kiosks and other similar retail outlets directly to FMCG companies.
Maguelone Biau co-founded Twende, a ridesharing company that pools African city dwellers with the most direct, affordable, and reliable transport options.
Kayode Adeyinka is the CEO of Gigmile, a Techstars-backed startup building the services and financial infrastructure for the African gig economy.
Guy Futi runs ORDA, a startup he co-founded that offers cloud-based restaurant software built for African chefs and food business owners, as CEO.
Sam Chappatte’s Kapu is a new e-commerce platform that aims to “reduce the cost of living” in Africa. By sourcing directly from farms & manufacturers, creating a low-cost logistics model & minimal food waste, Kapu says it can sustainably pass on savings to its customers. These customers access even lower prices if they place the order as a group (“pamoja”).
Roger Xavier Macia, a former Chief Commercial Officer at Jumia Senegal, is now the co-founder of Lengo, a startup that combines AI technologies and retailer crowdsourcing to deliver real-time data on consumer goods for FMCGs in Africa.
Marie-Reine Seshie, Jumia’s former Head of Marketing in Ghana, is now the CEO and co-founder of Kola Market. The startup provides digital inventory management, marketing, and sales solutions to SMEs, powered by AI technology.
Omolola Oladunjoye, ex-Chief Commercial Officer at Jumia Nigeria, now runs Penda LLC – a fully integrated social commerce platform across Africa.
Joe Falter, a former executive at Jumia in the UAE for nearly eight years, co-founded Zapp, a startup that provides on-demand grocery delivery services, has raised around $300m, and is backed by some of the world’s leading venture investors.
These are just some of the incredible startups that have been created by former Jumia employees.
Jumia is one of Africa’s earliest tech companies and ranks among the region’s biggest startup success stories.
So it comes as little surprise that former employees and founders have gone on to create their own incredible technology companies, disrupting various industries across the continent.
By sector classification, well over half, or 70% of startups founded by Jumia alumni are either in retail, e-commerce, foodtech, or fintech.
This suggests that Jumia’s early success as an e-commerce giant has created a positive spillover effect, as former employees leverage their experience and networks to create new businesses in related industries such as retail, last-mile delivery & logistics, and digital payments – all crucial components of e-commerce.
Naturally, working in a particular industry provides individuals with valuable insights into the workings of that industry and complementary ones.
Hence, ex-Jumia employees are well-positioned to leverage their expertise and create innovative solutions to meet the needs of consumers in these industries.
And they’re doing so, successfully and with sufficient VC backing.
Collectively, about 14 of such startups we tracked have raised around $330 million in venture capital funding, with over half of them at the seed stage or above.
This shows the talent and expertise that exists within the Jumia ecosystem, which has helped to create a vibrant startup culture out of emerging markets where it operates.
The funding also signals the emergence of a new generation of innovators who are able to attract significant investment and build successful businesses—a positive development for the tech industry.
In addition, it reflects how the African startup ecosystem is becoming increasingly mature and sophisticated, with successful companies spawning new ventures and nurturing the next generation of entrepreneurs.
Altogether, these startups have created around 1,300 direct jobs.
Jumia has served as a springboard for talented individuals who are contributing to the growth of not only Africa’s startup ecosystem but also globally, even after leaving the company.
It’s impressive to see how the e-commerce giant’s success has paved the way for some of Africa’s most brilliant ‘techpreneurs’.
Truly, great companies have the power to inspire incredible founders and fuel the growth of an entire entrepreneurial ecosystem!
By doing so, they help to build a stronger economy and a better future for all.
De Senegal à la Côte d’Ivoire, les avancées passionnantes dans le domaine de la technologie façonnent l’avenir en Afrique francophone.
Saviez-vous que l’Afrique abrite le plus grand nombre de locuteurs français au monde ?
Oui, vous avez bien lu.
La langue française, introduite sur le continent par la colonisation de la France et de la Belgique, est aujourd’hui parlée par environ 167 millions de personnes en Afrique en 2023, ce qui représente 51 % de la population mondiale de locuteurs français.
Cette population est répartie dans 29 pays, soit plus de la moitié des 55 pays d’Afrique, s’étendant du Maghreb en Afrique du Nord aux nations subsahariennes du centre et de l’ouest telles que le Sénégal, la Côte d’Ivoire et le Cameroun.
Jusqu’à 21 de ces pays sont désignés comme des “pays francophones”, où le français est soit la langue officielle, soit couramment parlée.
Et, selon certaines estimations, il y aura 700 millions de locuteurs français d’ici 2050, dont 80 % en Afrique.
Selon certaines estimations, il y aura 700 millions de locuteurs français d’ici 2050, dont 80 % en Afrique.
Pourtant, malgré sa prédominance, la région francophone reste souvent dans l’ombre des discussions concernant l’une des tendances les plus marquantes du continent : la montée de l’innovation technologique et des start-ups.
Pendant la majeure partie de la dernière décennie, une grande partie de l’attention et des investissements ont été orientés vers les start-ups des pays anglophones.
Pour mettre les choses en perspective, l’Afrique francophone attire généralement moins de 20 % des investissements en capital-risque annuels de l’Afrique.
Bien au contraire, la région a produit certaines des start-ups les plus remarquables dans les domaines de la technologie financière et des logiciels en Afrique.
Wave du Sénégal (service de paiement mobile), InstaDeep de la Tunisie (fournisseur de solutions d’intelligence artificielle récemment acquis par BioNTech SE dans le cadre d’une transaction de 684 millions de dollars), Chari du Maroc (une plateforme de commerce électronique pour les petits détaillants), et Yassirde l’Algérie (une super application pour les services à la demande, le transport, la livraison de dernière mile, les services de paiement, etc.) en sont des exemples brillants.
Les barrières linguistiques et les préférences des investisseurs jouent un rôle dans cette disparité.
La plupart des investisseurs en capital-risque actifs en Afrique proviennent des États-Unis et du Royaume-Uni, favorisant les marchés anglophones en raison de leur familiarité.
Pendant ce temps, les investisseurs français sont rares sur la scène des start-ups africaines, ce qui contribue à la répartition inégale des financements.
Une autre raison majeure du retard des financements des start-ups africaines francophones est leur entrée récente sur la scène.
Leur émergence au cours des trois dernières années et leur statut de démarrage entravent les tours de financement plus importants.
En 2021, la fintech sénégalaise Wave a atteint un jalon remarquable en devenant la première start-up du pays à atteindre une valorisation d’un milliard de dollars après avoir levé 200 millions de dollars.
Battre les probabilités : la montée des start-ups francophones
En 2021, la start-up sénégalaise Wave a atteint un jalon remarquable en devenant la première start-up du pays à atteindre une valorisation d’un milliard de dollars après avoir levé 200 millions de dollars.
Elle s’est également distinguée en tant que première licorne en dehors des hubs technologiques traditionnellement dominants tels que le Nigeria, l’Afrique du Sud, l’Égypte et le Kenya, et en tant que pionnière en Afrique francophone.
Le financement dirigé par l’IFC a suscité une attention considérable, suscitant la curiosité concernant les progrès technologiques dans la région plus large.
Depuis lors, les investissements dans les start-ups africaines francophones ont augmenté de manière constante.
Les start-ups africaines ont levé 4,8 milliards de dollars en 2022, le Nigeria étant en tête avec 1,2 milliard de dollars, suivi du Kenya, de l’Égypte et de l’Afrique du Sud.
Cependant, les données d’Africa: The Big Deal, une publication qui suit le financement en capital-risque en Afrique, ont révélé un changement de dynamique au-delà des “Big Four”.
Les pays francophones comme l’Algérie, la Tunisie et le Sénégal ont attiré respectivement 151 millions de dollars, 119 millions de dollars et 112 millions de dollars.
La Côte d’Ivoire a levé 34 millions de dollars, et le Togo a atteint pour la première fois la barre des 10 millions de dollars de financement. Le Mali a également connu sa meilleure année avec 6 millions de dollars.
Bien que les investissements en Afrique centrale francophone restent inférieurs à ceux des autres régions, le Tchad, le Cameroun, le Congo et la RDC ont vu augmenter les flux d’investissements, passant de 24 millions de dollars en 2021 à 50 millions de dollars en 2022.
BioNTech a acquis InstaDeep pour 684 millions de dollars.
Quel est l’avenir des “Francophones” en Afrique ?
Plusieurs tendances indiquent un changement dans les perspectives des entreprises technologiques de l’Afrique francophone.
Julaya (Côte d’Ivoire) : fournit aux entreprises africaines des comptes numériques pour effectuer des paiements et des transactions de paiement mobile à leurs employés et fournisseurs.
Gozem (Togo) : une super application qui propose une gamme de services, notamment le transport, le commerce électronique et les services financiers, dans plusieurs pays d’Afrique francophone.
Daba (pan-africain) : permet aux gens, principalement en Afrique francophone, d’accéder à une large gamme de produits d’investissement, des actions cotées à la Bourse régionale des valeurs mobilières (BRVM) aux obligations et aux fonds communs de placement, en passant par les entreprises en phase de démarrage, le tout via une application mobile.
Jambo (RDC) : se concentre sur l’introduction de la Web3 sur les marchés africains avec pour mission d’intégrer le prochain milliard d’utilisateurs africains.
Hub2 (Côte d’Ivoire) : une start-up fintech de premier plan en matière d’interopérabilité et d’infrastructure de paiement en Afrique francophone, présente dans 14 pays.
Djamo (Côte d’Ivoire) : propose des solutions de banque numérique pour les personnes exclues financièrement.
Auto24 (Côte d’Ivoire) : une entreprise de voitures d’occasion vendues directement aux consommateurs qui offre des solutions novatrices pour garantir des transactions transparentes et sécurisées.
Bizao (Côte d’Ivoire) : numérise les paiements pour les entreprises locales et internationales. Depuis 2019, Bizao a conclu plus de 30 partenariats avec des opérateurs de téléphonie, des banques et des opérateurs de paiement mobile en Afrique.
Oko (Mali) : développe des produits d’assurance récolte basés sur le mobile abordables pour offrir aux petits exploitants agricoles la sécurité financière dont ils ont besoin, quelle que soit l’évolution des conditions climatiques instables. La start-up opère au Mali et en Ouganda et a proposé une assurance à plus de 15 000 agriculteurs.
Paps (Sénégal) : est une entreprise de transport et de logistique alimentée par la technologie qui propose des services de bout en bout pour satisfaire les clients.
Yassir exploite la confiance des utilisateurs pour construire la plus grande super application d’Afrique francophone.
La région offre également un environnement politique plus propice à l’innovation tout en offrant aux start-ups une voie d’expansion régionale relativement aisée en raison de la culture, de la langue, de la réglementation et de la monnaie partagées.
Quatorze pays utilisent le franc CFA, régulé par l’Union économique et monétaire ouest-africaine et la Communauté économique et monétaire de l’Afrique centrale.
La monnaie est arrimée à l’Euro et ne fluctue pas, offrant le type de stabilité des taux de change qui n’est pas disponible ailleurs sur le continent.
Les deux unions représentent 14% de la population totale de l’Afrique et 12% de son PIB.
De plus, la région abrite six des sept économies à la croissance la plus rapide en Afrique subsaharienne, selon le FMI.
Les investisseurs en capital-risque français tels que Saviu, Orange Ventures, Newfund Capital, Proparco, CFAO et AfricInvest soutiennent de plus en plus les start-ups de la région.
Au moins 24 fondateurs de start-up de la région ont levé plus d’un million de dollars en 2022.
Comme de nombreuses start-ups évoluant dans l’espace du commerce électronique B2B sur le continent, Chari numérise le secteur des produits de grande consommation (FMCG) largement fragmenté au Maroc et en Tunisie.
La présence d’un solide système de soutien aux premiers stades de développement sous forme de concours, d’incubateurs, d’accélérateurs, de hubs technologiques et de studios de capital-risque contribue également à la croissance de l’entrepreneuriat dans la région.
Par exemple, Mstudio soutient les entrepreneurs en début de parcours, et en ce qui concerne les concours, l’incubateur technologique Hadina RIMTI organise le Marathon de l’Entrepreneur en Mauritanie.
Pour la formation à l’entrepreneuriat au Mali, des ateliers ont été conçus et menés par les incubateurs locaux CREATEAM et Impact Hub.
Pendant ce temps, Jambar Tech Lab et Traction Camp préparent les entrepreneurs au Sénégal et au Kenya à développer leurs entreprises en partenariat avec des incubateurs sur le terrain, CTIC Dakar & iHub.
De plus, des programmes d’innovation ouverte tels que le hackathon basé au Mali organisé par DoniLab, CREATEAM, Jokkolabs, Teteliso & Impact Hub ont conduit à la conception d’une nouvelle application de mobilité urbaine pour une grande entreprise locale.
Le marché africain francophone, fort de 400 millions de personnes, offre une opportunité distincte alors que son écosystème technologique se développe et que les start-ups attirent davantage l’attention et les investissements régionaux et mondiaux.
Bien que la préparation aux services numériques varie d’un pays à l’autre, les succès récents comme Wave et InstaDeep illustrent le potentiel collectif de la région. Des hubs technologiques au Sénégal aux avancées des fintech en Côte d’Ivoire, les développements technologiques passionnants façonnent l’avenir des entreprises et des services en Afrique francophone autant que dans les régions plus “populaires”.
From Senegal’s hubs to Cote d’Ivoire’s fintech advancements, exciting tech developments are shaping the future in francophone Africa.
Did you know that Africa is home to the largest number of French speakers in the world?
Yes, you read that right.
The French language, brought to the continent through colonialism by France and Belgium, is today spoken by an estimated 167 million people in Africa in 2023, who make up 51% of the global French-speaking population.
This population is spread across 29 countries, more than half of Africa’s 55, extending from the Maghreb in North Africa to sub-Saharan nations in the center and west such as Senegal, Ivory Coast, and Cameroon.
Up to 21 of those countries are known as “francophone countries”, where French is either the official or commonly spoken language.
And, according to some estimates, there will be 700 million French speakers by 2050, 80% of them in Africa.
Yet for all its ubiquity and predominance, the francophone region often remains overshadowed in discussions surrounding one of the continent’s most prominent trends: the surge in technology innovation and startups.
For the better part of the last decade, much of the attention, and investments, have been skewed toward startups in predominantly English-speaking countries.
For context, francophone Africa typically attracts less than 20% of Africa’s annual VC funding.
Far from that, the region has produced some of the most notable fintech and software startups in Africa.
Senegal’s Wave (mobile money service), Tunisia’s InstaDeep(AI solutions provider recently acquired by BioNTech SE in a $684m deal), Morocco’s Chari (an e-commerce platform for small retailers), and Algeria’s Yassir (a super App for on-demand, ride-hailing, last-mile delivery, payment services, and more)are some shining examples.
So why does francophone Africa get sidelined?
Language barriers and investor preferences play a role in this disparity.
Most venture capital investors and firms active in Africa originate from the US and UK, favoring Anglophone markets due to familiarity.
Meanwhile, French investors are scarce in the African startup scene, contributing to the uneven funding distribution.
Another major reason for the lag in francophone African startups’ funding is their recent entry into the scene.
Their emergence in the last three years and early-stage status hinder larger funding rounds.
In 2021, Senegalese fintech Wave achieved a remarkable milestone as the country’s inaugural startup to reach a $1 billion valuation after raising $200 million.
Beating the odds: the rise of francophone startups
In 2021, Senegalese fintech Wave achieved a remarkable milestone as the country’s inaugural startup to reach a $1bn valuation after raising $200m.
Notably, it also stood out as the first unicorn outside of the traditionally dominant tech hubs such as Nigeria, South Africa, Egypt, and Kenya—and the pioneer in French-speaking Africa.
The IFC-led funding received significant attention, sparking curiosity about tech progress in the broader region.
Since then, investment in French-speaking African startups has steadily increased.
African startups raised $4.8bn in 2022, with Nigeria leading with $1.2bn, followed by Kenya, Egypt, and South Africa.
But data from Africa: The Big Deal, a publication that tracks venture funding in Africa, revealed a shift in momentum beyond the “Big Four.”
French-speaking countries like Algeria, Tunisia, and Senegal attracted $151m, $119m, and $112m respectively.
Côte d’Ivoire raised $34m, and Togo reached the $10m funding mark for the first time. Mali also marked its most successful year with $6m.
While investment in central francophone Africa remains lower than in other regions, Chad, Cameroon, Congo, and DRC saw increased investment inflows: from $24m in 2021 to $50m in 2022.
What does the future hold for “the French” in Africa?
Several trends indicate a change in the tech venture fortunes of French-speaking Africa.
For one, the region boasts some of the highest mobile phone adoption rates, which is fueling the rise of even more tech-driven startups. Some of these are:
Julaya (Côte d’Ivoire): provides African businesses with digital accounts to make payments, and disburse mobile money transactions to their employees and suppliers.
Gozem (Togo): a super app that offers a host of services – including transport, e-commerce, and financial services – across several countries in francophone Africa.
Daba (pan-African): enables people, primarily in francophone Africa, access a wide range of investment products, from stocks listed on the regional exchange BRVM, bonds, and mutual funds to early-stage ventures, all through a mobile application.
Jambo (DRC): focused on bringing Web3 to African markets with a mission to onboard the next billion African users.
Hub2 (Côte d’Ivoire): a leading fintech startup in interoperability and payment infrastructure in Francophone Africa, present in 14 countries.
Djamo (Côte d’Ivoire): offers digital banking solutions to people excluded financially.
Auto24 (Côte d’Ivoire): a direct-to-consumer used car company that provides new, innovative solutions to ensure transparent and secure transactions.
Bizao (Côte d’Ivoire): digitizes payments for local and international companies. Since 2019, Bizao has signed over 30 partnerships with telecom operators, banks, and mobile money operators in Africa.
Oko (Mali): develops affordable mobile-based crop insurance products to provide smallholder farmers with the financial security they need, regardless of unstable climate trends. The startup operates in Mali and Uganda and has brought insurance to more than 15,000 farmers.
Paps (Senegal): is a technology-driven transportation and logistics company that offers end-to-end services for customer satisfaction.
BioNTech bought InstaDeep for $684m.
The region also has a more conducive policy environment for innovation while offering startups a relatively easy regional expansion route due to shared culture, language, regulations, and currency.
Fourteen countries use the CFA franc, regulated by the West African Monetary and Economic Union and the Central African Economic and Monetary Community.
The currency is pegged to the Euro and does not fluctuate, providing the kind of foreign exchange stability that’s not available elsewhere on the continent.
Both unions represent 14% of Africa’s total population and 12% of its GDP.
In addition, the region is home to six out of the seven fastest-growing economies in sub-Saharan, per the IMF
French VC investors like Saviu, Orange Ventures, Newfund Capital, Proparco, CFAO, and AfricInvest are also increasingly backing startups in the region.
The presence of a robust early-stage support system in the form of competitions, incubators, accelerators, technological hubs, and venture studios is also contributing to entrepreneurship growth in the region.
Mstudio, for instance, supports early-stage entrepreneurs, and in terms of competitions, tech incubator Hadina RIMTI organizes the Entrepreneur’s Marathon in Mauritania.
For entrepreneurship training in Mali, workshops have been designed and conducted by local incubators CREATEAM and Impact Hub.
Jambar Tech Lab and Traction Camp meanwhile, are getting entrepreneurs in Senegal and Kenya ready to scale their businesses by partnering with incubators on the ground, CTIC Dakar & iHub.
And, open innovation programs like the Mali-based hackathon organized by DoniLab, CREATEAM, Jokkolabs, Teteliso & Impact Hub led to the design of a new urban mobility app for a large local firm.
The 400-million-population-strong francophone African market offers a distinctive opportunity as its tech ecosystem unfolds, and startups attract more attention and capital from regional and global investors.
While readiness for digital services varies across countries, recent successes like Wave and InstaDeep illustrate the region’s collective potential.
From Senegal’s tech hubs to Cote d’Ivoire’s fintech advancements, exciting tech developments are shaping the future of business and services in francophone Africa as much as they are in the more “popular” region.
Dans le paysage commercial dynamique d’aujourd’hui, les startups se sont imposées comme les moteurs de l’innovation, perturbant les industries traditionnelles et façonnant l’avenir.
Ce post vise à démystifier le monde des startups, en éclairant ce qu’elles sont, comment fonctionne l’investissement dans les startups, comment les investisseurs peuvent gagner de l’argent en investissant dans les startups, et le processus de sortie d’un investissement dans une startup.
Qu’est-ce qu’une startup ?
Une startup est une jeune entreprise à ses débuts, généralement fondée par des entrepreneurs avec une idée révolutionnaire ou une solution unique à un problème.
Les startups se caractérisent par leur potentiel de croissance rapide, leur évolutivité et leur vision de perturber ou de créer de nouveaux marchés. Elles opèrent souvent dans des secteurs axés sur la technologie, mais peuvent s’étendre à diverses industries.
Qu’est-ce que l’investissement dans les startups ?
L’investissement dans les startups consiste à fournir un soutien financier à des entreprises en phase de démarrage en échange d’une participation au capital.
Ce processus se déroule généralement lors de différentes phases de financement, où les startups lèvent des capitaux pour stimuler leur croissance. Les investisseurs peuvent participer à ces étapes ou phases de différentes manières, comme l’investissement providentiel, les fonds de capital-risque ou les plateformes de financement participatif.
En règle générale, l’investissement dans les startups se déroule à différentes étapes, notamment le démarrage, la série A, la série B, etc., jusqu’à l’introduction en bourse (IPO) et la sortie, etc., chaque étape représentant une phase distincte de la croissance et du développement d’une startup.
Il est important de noter que toutes les startups ne passent pas par toutes ces étapes, et la chronologie et les besoins de financement peuvent varier considérablement.
Lors de l’investissement dans les startups, la due diligence est cruciale. Les investisseurs analysent en profondeur le modèle commercial de la startup, son potentiel de marché, l’expertise de l’équipe, le paysage concurrentiel et les projections financières.
En menant des recherches approfondies, les investisseurs peuvent identifier les startups prometteuses ayant plus de chances de réussir.
Comment pouvez-vous gagner de l’argent en investissant dans les startups ?
Investir dans les startups offre le potentiel de rendements significatifs, mais comporte également des risques plus élevés par rapport aux voies d’investissement traditionnelles. Voici quelques moyens pour les investisseurs de gagner de l’argent grâce aux investissements dans les startups :
Appréciation du capital : À mesure qu’une startup se développe et atteint des étapes clés, la valeur de ses actions peut augmenter. Les investisseurs qui ont acheté des actions à un stade précoce peuvent bénéficier de l’appréciation du capital lorsque l’entreprise réussit et attire d’autres investissements ou devient publique.
Dividendes ou distribution de bénéfices : Certaines startups peuvent générer des bénéfices à un stade précoce. Dans de tels cas, les investisseurs peuvent recevoir des dividendes ou des distributions de bénéfices, fournissant ainsi un flux de revenus régulier.
Acquisition ou fusion : Les startups dotées de produits ou de technologies convaincants deviennent souvent des cibles d’acquisition attrayantes pour de plus grandes entreprises. Si une startup est acquise ou fusionne avec une autre entreprise, les investisseurs peuvent réaliser un profit de la vente de leurs actions. Par exemple, Instagram, l’application populaire de partage de photos, a été acquise par Facebook en 2012 pour environ 1 milliard de dollars. Cette acquisition a généré des rendements importants pour les investisseurs de première heure.
Introduction en bourse (IPO) : Une autre stratégie de sortie potentielle pour les investisseurs dans les startups est une IPO. Lorsqu’une startup devient publique, les investisseurs peuvent vendre leurs actions sur le marché boursier, réalisant des gains si la valorisation de l’entreprise a augmenté. En 2019, le géant du commerce électronique africain Jumia est entré en bourse, offrant à ses premiers investisseurs la possibilité de sortir et de réaliser des profits.
Marché secondaire : Les investisseurs peuvent vendre leurs actions sur un marché secondaire, où des investisseurs privés achètent et vendent des actions de sociétés non cotées en bourse. Cela permet aux investisseurs de sortir de leurs investissements avant une IPO ou une acquisition. SharesPost et EquityZen sont des exemples de plateformes de marché secondaire qui facilitent l’achat et la vente d’actions de startups.
En conclusion, investir dans les startups peut être une entreprise gratifiante mais risquée. Comprendre la nature des startups, effectuer une due diligence approfondie et diversifier son portefeuille d’investissement sont des étapes essentielles pour réussir dans l’investissement dans les startups.
When it comes to investing, diversification is a concept that seasoned investors swear by. But what exactly is diversification, and why is it important?
In this blog, we will explore the significance of diversification in investing, understand its benefits, and learn how investors can leverage it to enhance their portfolio returns.
So, fasten your seatbelts and get ready to spread your investment wings!
What is Diversification?
Diversification is a risk management strategy that involves spreading your money (investments) across a variety of different assets or asset classes.
By investing in a range of assets, such as stocks, bonds, real estate, and commodities, investors aim to reduce the overall risk of their portfolio.
The idea behind diversification is to avoid putting all your eggs in one basket, minimizing the impact of any single investment’s poor performance on your overall wealth.
Why is diversification important?
Reduces risk: Diversification is crucial because it helps reduce the risk associated with investing. Different asset classes have unique risk profiles, and by diversifying, you spread your risk across various investments. If one investment underperforms, others may compensate for the loss, potentially safeguarding your capital.
During the Global Financial Crisis of 2008 which rocked markets worldwide, for instance, investors who had diversified their portfolios beyond just stocks and bonds, including investments in real estate, commodities, or alternative assets, fared better. These diverse investments helped offset the losses incurred by traditional stock and bond holdings.
Smoothing out returns: Diversification can help smooth out the volatility or instability of your investment returns. When one asset class experiences a decline, another may be thriving. By having a mix of investments, you can potentially balance out the highs and lows, aiming for more stable and consistent returns over the long term.
Capital preservation: Diversification is an effective strategy for preserving your capital. By diversifying your portfolio, you avoid the risk of losing everything if a single investment fails. Even if one investment does poorly, the other investments may hold or increase their value, preserving your overall wealth.
How to apply diversification when investing
Asset allocation: Determine an appropriate asset allocation based on your investment goals, risk tolerance, and time horizon. Allocate your funds across different asset classes, such as stocks, bonds, and real estate, based on their historical performance and correlation with each other.
Geographic diversification: Expand your horizons by diversifying geographically. Invest in both domestic and international markets to reduce exposure to country-specific risks. For example, if your portfolio is heavily concentrated in one country and that economy suffers, your investments may be severely affected. However, by diversifying across different countries, you can potentially mitigate the impact of regional downturns.
Sector diversification: Within each asset class, diversify across sectors. Different sectors perform differently in various economic conditions. By spreading your investments across sectors like technology, healthcare, energy, and consumer goods, you can balance the risk and potential return associated with specific industries.
During the dot-com bubble of the late 1990s, many investors poured their money into internet-related stocks. However, when the bubble burst in 2000, countless companies collapsed, causing massive losses. Those who had diversified their portfolios across different sectors and asset classes were better positioned to weather the storm.
Conclusion
Diversification is a fundamental principle of investing that helps mitigate risk, smooth out returns, and preserve capital.
By allocating investments across different asset classes, geographies, and sectors, investors can enhance their chances of long-term success.
Remember, the key is not to put all your eggs in one basket.
Disclaimer:This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients.
Africa is not only rich in cultural heritage and breathtaking landscapes but also offers incredible investment opportunities.
But investing in the continent requires patience as strategies that succeed in one country may not work in others.
In this post, we explore five compelling reasons why you should consider investing in Africa, even if you reside outside the continent.
A young and fast-growing market
Africa has over 1.3 billion people and is the world’s youngest region, with almost 60% of its population under 25 years old while the median age is 19.
The continent also boasts a rapidly growing population and an expanding middle class. According to the World Economic Forum, by 2030, over 40% of Africans will belong to the middle or upper classes, and there will be a higher demand for goods and services.
By that time, household consumption is expected to reach $2.5 trillion, more than double that of 2015 at $1.1 trillion.
With increasing urbanization and rising disposable incomes, it presents an untapped market ready for investors to tap into a vast consumer base, which offers tremendous growth potential across various sectors.
Innovation and entrepreneurship
Africa is witnessing a remarkable surge in innovation and entrepreneurship. From fintech startups to renewable energy solutions, African entrepreneurs are harnessing technology to solve local challenges and create scalable businesses.
The continent has produced at least seven unicorns—private companies worth $1 billion or more.
One such startup is Flutterwave, a Nigerian fintech unicorn revolutionizing digital payments across the continent. Another standout is Andela, a pan-African company connecting skilled software developers with global companies.
These innovative startups demonstrate Africa’s increasing prominence in the global tech landscape, fueling economic growth and driving technological advancements across the continent.
By investing in African startups and venture capital funds, you can support these innovative minds while potentially benefiting from their future successes.
Rapid digital transformation
Africa has witnessed a rapid digital transformation in recent years, revolutionizing various sectors.
With increasing internet penetration, mobile connectivity, and innovative solutions, the continent has embraced technology in all facets of life.
More so, the contribution of the mobile industry to its GDP will grow to almost $155 billion.
From mobile banking to e-commerce platforms, Africa’s digital revolution is empowering individuals, bridging the digital divide, and creating opportunities for socio-economic development across the continent.
The abundance of natural resources
Africa is blessed with an abundance of natural resources that contribute significantly to its economic potential.
With vast mineral deposits, the continent holds a substantial share of the world’s reserves of gold, diamonds, platinum, and other precious metals. It is also rich in oil and gas resources, with countries like Nigeria, Angola, and Algeria being major producers.
Additionally, Africa possesses extensive reserves of timber, fertile agricultural land, and a diverse range of flora and fauna.
These resources present immense opportunities for economic growth, industrial development, and foreign investment.
With the right investment strategy, you can benefit from the continent’s rich resources and contribute to its sustainable development.
Stronger and more dynamic economies
Africa is experiencing a remarkable shift towards diverse and stronger economies. With a focus on innovation, entrepreneurship, and sustainable development, several African nations are making significant strides.
The continent has witnessed a surge in technological advancements, fostering digital transformation and leapfrogging traditional infrastructure barriers.
Countries like Nigeria, Kenya, and South Africa have emerged as tech hubs, attracting global investments and nurturing homegrown startups. African governments are also supporting sectors like agriculture, renewable energy, and manufacturing to stimulate economic growth and reduce dependency on commodities.
Regional collaborations, such as the African Continental Free Trade Area (AfCFTA), are promoting intra-African trade, opening up new markets, and encouraging economic integration.
Africa’s total exports are projected to reach approximately $952 billion by 2035, driven by the growth of regional trade and enhanced connectivity, according to a new report by Standard Chartered.
This momentum towards diverse and stronger economies is poised to unleash Africa’s immense potential, empowering its people and offering investors exciting opportunities across the continent.
Investing in Africa presents a world of opportunities for those outside the continent.
With an untapped market, abundant resources, growing infrastructure, a vibrant entrepreneurial ecosystem, and favorable policies, Africa is poised for economic growth and development.
Disclaimer:This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients.
Les investisseurs institutionnels et individuels ont pu participer via la nouvelle plateforme d’investissement unifiée de Daba pour soutenir le premier système d’exploitation IA pour les biens de consommation courante en Afrique.
Credit image : Lengo AI
Daba Finance, une start-up qui permet d’investir de manière transparente dans les meilleures entreprises privées et publiques d’Afrique, a participé récemment à une levée de fonds pré-amorçage menée par la start-up sénégalaise d’intelligence artificielle (IA), Lengo. Les investisseurs institutionnels et individuels ont pu participer via la nouvelle plateforme d’investissement unifiée de Daba.
Daba a été lancée en 2021 avec une mission simple : démocratiser l’investissement en Afrique en offrant aux investisseurs de tous niveaux un moyen sans obstacle d’accéder à des stratégies d’investissement sélectionnées et de construire leur patrimoine en investissant dans les marchés africains privés et publics, grâce à sa plateforme tout-en-un.
Qu’est-ce que Lengo ?
Fondée en 2021, Lengo est une plateforme d’IA qui offre une base de données étendue et des informations sur les biens de consommation courante pour les entreprises du secteur des biens de consommation courante en Afrique.
Lengo exploite le vaste réseau de boutiques de quartier qui représentent 90 % des achats sur le continent, en fonctionnant comme une solution logicielle en tant que service (SaaS) et en combinant les efforts des agents de terrain appelés “Lengo Eagles” et de l’IA pour fournir des données en temps réel sur les performances de vente de produits, en connectant les détaillants et les entreprises du secteur des biens de consommation courante.
La start-up fournit actuellement des informations sur plus de 2 000 produits, a cartographié près de 30 000 boutiques, et plus de 25 entreprises de biens de consommation courante utilisent sa plateforme mensuelle pour “arrêter de deviner en Afrique” et savoir où gagner sur le continent.
Pourquoi avons-nous soutenu Lengo ?
L’Afrique devrait représenter jusqu’à 40 % de la population humaine d’ici la fin du 21e siècle, le marché des biens de consommation courante étant positionné pour devenir son premier secteur industriel d’importance mondiale.
Alors que la demande de produits alimentaires emballés, de boissons, de produits de soins personnels et d’articles ménagers explose, les entreprises multinationales étendent leur présence et des acteurs locaux émergent. Mais ils ont besoin d’aide en raison des limitations de l’infrastructure et du manque de données sur les préférences des consommateurs, les tendances du marché et la dynamique de la chaîne d’approvisionnement.
Credit image : Lengo AI
Lengo résout ce dernier problème en tirant parti de l’IA et est bien placé pour capturer une part de marché importante dans un secteur qui représentait les deux tiers des dépenses de détail de 1,4 billion de dollars en Afrique en 2016 et devrait encore croître, grâce à l’augmentation des revenus de la classe moyenne et de l’urbanisation.
L’équipe fondatrice comprend Max Smith (PDG), avec une expérience étendue des ventes et de la recherche de marché en Afrique, Roger Xavier Macia (CCO), ancien CCO chez Jumia au Sénégal, et Ismaila Seck (CTO), un vétéran de la communauté de l’IA au Sénégal titulaire d’un doctorat en apprentissage automatique et en apprentissage profond.
“Daba est fier de s’associer à Lengo pour étendre davantage sa solution robuste qui répond aux besoins cruciaux du marché en croissance rapide des biens de consommation courante”, a déclaré Boum III Jr., co-fondateur et PDG de Daba. “Nous sommes encore plus déterminés à aider un plus grand nombre d’investisseurs à soutenir de telles entreprises et des start-ups viables pour surmonter les obstacles et sécuriser des capitaux.”
Autres investisseurs participants
La levée de fonds pré-amorçage a été co-dirigée par Ventures Platform et Acasia et a également vu la participation d’autres investisseurs de premier plan en Afrique, notamment P1 Ventures, Launch Africa, Voltron Capital, Super Capital et Atlantis Ventures.
Et ensuite ?
Avec la clôture de la levée de fonds pré-amorçage, Lengo prévoit d’utiliser les nouveaux financements pour développer la partie IA de son produit afin de se connecter avec les magasins à grande échelle, améliorer l’expérience utilisateur et les analyses en temps réel sur sa plateforme pour les entreprises du secteur des biens de consommation courante, et étendre sa couverture à plusieurs nouvelles villes en Afrique.
Pour concrétiser cette ambition, la start-up prévoit de recruter davantage de talents, avec une priorité pour les ingénieurs en IA/logiciels et les gestionnaires de produits prêts à contribuer en Afrique.
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