The extensive adoption of digital technologies post-COVID-19 during the year 2020 further revealed the key role played by the tech sector in the socio-economic development of countries worldwide.
Tech sectors such as healthtech and logistics came to the fore as individuals and businesses coped with the pandemic while adapting to the new normal.
2020 marked an outstanding year for investors in startups like Paystack, following the Nigerian fintech’s $200 million acquisition by Stripe.
Looking ahead to 2021, what tech sectors hold the most promise for investors?
The importance of medical and health technologies to the survival of the human race has never been more pronounced as it was post-COVID-19. It became imperative that people got tested and treated, as well as obtain authentic information regarding the cause, prevention and control of the coronavirus.
As a result, healthtechs became the go-to platforms for many people. Following from this, the healthtech sector has emerged as a very viable space in the global fight against disease outbreaks and preventable deaths as well as the advancement of diagnostics and provision of affordable medical care.
This was proven by notable investments into the sector in 2020, with Nigeria’s 54gene and Ghana’s mPharma closing funding rounds of $15 million and $17 million respectively.
Healthtechs are occupying a vantage position at this moment, and with the fight against COVID-19 still ongoing, it is one that is set to continue into 2021 and beyond. Investors surely do not want to miss out.
Nigeria is the biggest crypto market in Africa in terms of peer to peer (P2P) trading and global remittances. Crypto operations have boomed in Nigeria, with the early success of crypto startups like Bundle Africa showcasing the immense potential of the market.
Crypto solutions are exploding in Nigeria right now and I do not think anyone wants to be left out.Munachi Ogueke, YellowCard CBO
Just released this year, the Bundle app processed over N1 billion ($2.5 million) in trading volume within three months – a testament to the ever-growing adoption of cryptos in Nigeria. Bundle has already raised $450,000 pre-seed from Binance, the world’s largest crypto exchange in terms of trading volume as of January 2018.
Early-stage crypto remittance platforms such as Blueloop are also showing much promise, as remittance continues to grow across Africa. With Bitcoin’s ever-rising valuation, investors should definitely keep an eye on this sector!
Due to the movement restrictions imposed to curtail the spread of COVID-19, logistics services witnessed significant growth in patronage during the year as individuals and businesses had to send food packages and other items to intended recipients.
In response to the second wave of the coronavirus, mobility constraints are still very much in place in certain countries such as South Africa. Logistics startups are positioned to ease personal or corporate deliveries and will certainly be completing several orders day in and out.
Following the COVID-19 outbreak, many people have come to realise that logistics services are key to sending/receiving goods in a shorter turnaround time, and this has driven up the volume of orders handled by delivery companies.
Having led to revenue growth and boosted profits in the logistics sector this year, it can be inferred that the upward trend will be sustained into 2021.
Suggested read: Logistics, Health-tech; Here are Top 5 Sectors that Benefited from the Pandemic in Nigeria
Mobile gaming is slowly but surely gearing up as the next big thing in the tech space. Directly accounting for 45% of an estimated $152 billion global gaming revenue realised in 2019, mobile gaming is definitely one to pay close attention to.
A PwC report projects that Africa’s video game industry will be worth over half a billion dollars – $642 million by 2021.
The apparent success of gaming startups such as Carry1st and ChopUp reveals that mobile gaming is indeed viable and can be monetised across Africa. The sector is attracting much more interest, even from telecom giants including MTN.
With internet and smartphone penetration rising fast in Africa, investments in the mobile gaming sector are well worth the risk going forward.
While the sectors already highlighted are touted as the best placed to yield sizable returns on investment, investors would of course be looking out for the next Paystack.
Fintechs are usually promising due to their unique role in the strategic digitisation of financial services, and typically secure the biggest funding deals year in year out to scale their solutions and increase their chances of flourishing in the future.
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