Africa’s startup scene has seen continued progress year on year. After a slight setback in 2020, courtesy of the coronavirus and the ensuing lockdown, activities have resumed as usual — well, almost.
As the year ends, we bring you a few memorable moments across the African tech ecosystem, some good and some bad.
More African investors throw their hats in the ring
For so long, most of the investment into African startups came from foreign investors. Make no mistake, that is still the case. However, more African investors are springing up and providing much-needed funding for African startups.
This year saw PiggyVest’s Co-founder, Odunayo Eweniyi team up with Eloho Omame to start FirstCheck, an African firm funding startups founded by women. Seasoned investor and early PiggyVest investor, Olumide Soyombo, launched Voltron Capital; LoftyInc Capital launched its third fund of $10 million. Ventures Platform recently announced the first close of its $40 million fund.
Many founders also invested in startups themselves or as part of a collective, with Flutterwave’s Founder, Olugbenga Agboola; Paystack’s Co-founders, Shola Akinlade and Ezra Olubi; and Babs Ogundeyi, Founder and CEO of Kuda Bank some of the founders to do so.
All this points to a better understanding of the dynamics of funding tech startups by local investors and would help support more innovators on the continent. We’re excited to see how this plays out.
Nigeria’s crypto ban
With a broken payment infrastructure, many Nigerians took to cryptocurrencies to navigate global financial systems.
However, the Federal Government of Nigeria was having none of it. Through the Central Bank of Nigeria, it issued a circular in February instructing commercial banks and other licensed financial institutions to stop facilitating transactions for cryptocurrency exchanges in the country.
There was a brief period when it seemed users of cryptocurrencies were going to capitulate, but they were only regrouping with peer to peer transactions increasing as a result.
The year of the unicorns
As the year started, Africa had only one unicorn. As of December, it now boasts five fintech startups as OPay, Flutterwave, Chipper Cash, and talent outsourcing company, Andela, joined Interswitch as the continent’s unicorns.
Flutterwave led the way when it raised $170 million in a Series C round in March, bringing its total funding to $225 million.
OPay was the next with a $400 million raise that took its valuation way past the $1 billion mark and made it the fastest African startup to cross the $1 billion valuation mark.
By September, Andela became the latest unicorn after Softbank led a $200 million Series E round in the talent outsourcing startup. Chipper Cash rounded up the list as Africa’s seventh unicorn raising a $150 million extension round. This followed its $100 million Series C raise in May.
Twitter’s first African office
Nigeria’s frequent fight with Ghana continued this year, and this time, it was not over who had the better jollof rice but over Twitter’s decision to set up its first African office in Ghana.
The decision to set up in Ghana was a surprise to many after comments made by Twitter’s then CTO (now CEO), Parag Agrawal, during a 2019 visit to Nigeria.
During the visit, Agrawal commented on the availability of technical talents in Nigeria and impactful public conversations.
The roles it began hiring for also indicate that the plan might have been to set up in Nigeria with the company listing free speech, online freedom, and the open Internet as its reasons for choosing Ghana.
The Nigerian Startup Bill
Building a startup in Nigeria means occasionally pulling all-nighters as you try to figure out how to surmount the latest regulatory hurdle. For so long, it has been argued that Nigerian startup founders need to be proactive in their interactions with the government and regulators.
As a result, some of the country’s most prominent founders and investors came together to work on the Nigerian Startup Bill. The Bill seeks to set a framework of interaction between the Nigerian startup community and the government to enable startups to thrive.
However, this is not the first of such initiatives, and few people expressed scepticism about it. However, it seems plans are on track, with TechCabal reporting that Nigeria’s Federal Executive Council has approved the bill.
It remains to be seen whether things work better this time around, but we hope they do.
Nigeria’s Twitter ban
On Wednesday, June 2, 2021, microblogging platform, Twitter, deleted tweets made by the Nigerian President, Muhammadu Buhari. According to Twitter, the decision resulted from the President’s violation of its abusive behaviour policy.
Two days later, on June 4, 2021, the federal government responded by banning the use of the microblogging platform in Nigeria, forcing Nigerians to access Twitter using VPNs. Over the next few months, the federal government disclosed a willingness to lift the ban, provided Twitter agreed to some conditions.
In August, the Federal Minister of Information and Culture, Lai Mohammed, hinted that the ban would be lifted “in a matter of days.” It’s been over four months now, and the ban is still in place.
Francophone Africa gets its first unicorn
Until this year, all of Africa’s tech unicorns had been founded in predominantly English speaking countries. But in September, Wave broke that monopoly, becoming the first francophone Africa unicorn. Perhaps, unsurprisingly, it came from the fintech sector.
The startup became a unicorn after it raised $200 million in Africa’s largest Series A round to date. Founded by Drew Durbin and Lincoln Quirk, Wave launched in Senegal in 2017, offering free deposits and withdrawals via its mobile application while charging users a 1% fee for money transfers.
Its low-cost solution has enabled it to take on more established players in Senegal, with Orange, the country’s largest mobile money operator, reportedly going as far as stopping its Senegalese users from purchasing Orange airtime using Wave’s application.
Record-breaking rounds for Egyptian startups
In many ways, 2021 was the year of Egyptian startups. Last year, startups in the country raised $156 million, but by August 2021, they had eclipsed those figures. As of September, startups in the country had raised over $400 million in 2021.
Consequently, it now rivals Nigeria, Kenya, and South Africa as the continents top investment destinations.
Already, the country has one startup valued above $1 billion in Fawry and could have two when Swvl lists publicly. According to Disrupt Africa’s Egyptian Startup Ecosystem Report 2021, this year, Egypt is behind only Nigeria in terms of funding raised by its startups. However, unlike most startup powerhouses on the continent, Egypt’s most prominent startups are in eCommerce instead of fintech.
MainOne’s impending acquisition
Last year, telecommunications service provider, MainOne, celebrated its 10th anniversary. This year, reports have emerged that the company is in talks to be acquired by Equinix for $320 million.
It is fair to say that the news was one few, if any, were expecting as Nigerians made their feelings known on Twitter. A central talking point was the rumoured cost of the transaction, with some of the opinion that the company was underpriced.
However, Funke Opeke, the company’s Founder and CEO, quashed such suggestions in an interview with TechCrunch. According to her, while MainOne has raised money since its founding, not all of it has been equity raises, with the company also raising debt rounds.
At $320 million, this is the highest any Nigerian tech company has acquired. Throw in the fact that this is a female-led company, and you can see how impressive it is.
Nigeria’s surprising 5G auction
Nigeria’s road to getting 5G has thrown up some surprises, but none has been more surprising than one of the recently concluded 5G auction winners — MAFAB Communications.
Until the bids were announced, very little was known about MAFAB Communications or its operations. However, it surprisingly beat Airtel to become one of two holders of Nigeria’s 5G licence. For context, the company was only incorporated on July 8, 2020, but managed to edge out older and more established players.
As we step into the new year, we do so with excitement at what is to come, and we hope you had an amazing year.
Merry Christmas, and a happy new year.
Accidental writer, covering Africa’s startup landscape and its heroes.