Nigerian Startups Attracted 17% of Over $1bn Africa Funding in 2020


Nigerian startups contributed more than 17% of the over $1 billion funds raised by African startups in 2020. This is according to the latest data gathered by Startuplist Africa on the African Startup Ecosystem.

The report revealed that the funds were raised by over 280 startups in more than 350 deals across the continent in 2020.

Startuplist Africa’s report focuses on African Startups that have raised $100K and above

Investments in Africa grows despite pandemic

Despite the negative effects of the pandemic on investors, Venture Capital Investments in Africa continued to maintain an upward trajectory growing by over 400% in the past 5 years.

According to the report, investments in Q1 2020 rose 76% year-on-year but took a dive in Q2 as the negative effect of the pandemic dropped investments by 41%. However, investments bounced back by over 75% in Q3.

A total of over 400 investors have invested in Africa during the year. Kenya’s Greenlight Planet’s $90 million private equity deal was the highest funding recorded in 2020.

South Africa’s JUMO and Egypt’s Vezeeta follows with $55 million and $40 million raised respectively. Nigeria’s Flutterwave and Lumos complete the top 5 fundraisers on the continent with $35 million each.

Related post: Nigerian Startups Responsible for 97.9% of $1.8bn Raised by W/African Startups in the Last 10yrs

69% of early- stage startups raised less than $10 million

In terms of ticket size distribution, a larger percentage of African Startups raised above $10m. Series A funding saw 56% of the startups raise above $10M while Series B was even higher at 81%.

Similarly, Series C funding recorded about 77% of funds above $10M. However, seed funding for early-stage African startups raised mostly between $1m – $10m, with as much as 31% raising below $1M.

Clean Energy startups saw the highest funding

2020 saw investors diversify in their investments as new sectors saw increased funding. Clean energy startups raised the most money, recording a 200% increase from last years total.

Last year’s investment hotbeds like Fintech and Logistics have somewhat
slowed down as the pandemic has prompted investors to diversify into new industries.

However, the finance industry is still the most desirable industry in Africa by deal count. The sector recorded over 33 investment deals during the year, the highest by any sector.

The health and logistics sector follows with 19 deals each. Agriculture and Renewable energy which recorded 13 deals each complete the top 5 sectors by deal number.

Suggested read: “Tech Startups Need More Opportunity to Showcase their Innovations” – Techwizard CEO

Nigeria remain’s Africa’s Top Investment Destination

Startups in Kenya raised the largest funding in 2020 with over $194 million recorded. Nigeria comes in second with over $170 million raised during the year.

However, Nigeria still remains Africa’s number 1 investment destination as the country tops both charts investment destinations by deal count and investment destinations by the number of startups.

This year, Kenya showed its strength as a top investment destination while South Africa continued its dominance among the top startup ecosystems on the continent.

In summary

Despite the pandemic, investment in Africa was higher than many will have expected especially due to the economic uncertainty that has disrupted many sectors.

However, the long-term effect is visible in the new wave of diversification by investors on the continent. Notably, the obvious bounce back in investment during the third quarter of the year is good news to startups

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