Report: over $185m invested in Africa’s tech startups in 2015

Tech startups in Africa raised an estimated total of over US$185-million in 2015, according to a recent report.

The report, titled African Tech Startups Funding Report 2015 by startup news site Disrupt Africa, polled hundreds of startups, investors, hubs and other ecosystem players over the course of two months.

It found that 125 tech startups secured a total of US$185 785 500 during the course of 2015. To little surprise, South Africa, Nigeria, and Kenya made up the bulk of the overall figure.

In South Africa, 45 startups raised funding, 36% of the overall total. An estimated 24% of deal value was recorded in Nigeria, while Kenya made up 14.4%. Other investor hotspots include Egypt, Ghana, and Tanzania.

Though the total value of South African deals was found to make up 29% of the overall value, Tom Jackson from Disrupt Africa tells Ventureburn that the startups raised less funding each, compared to Nigeria and Kenya.

“The average of just over US$1.2 million [per startup funding round in South Africa] was below the average amounts in Nigeria, Kenya and Tanzania,” Jackson points out. This trend is echoed by the Southern African Venture Capital and Private Equity Association which found that while the deal activity has increased, the average deal size has declined by 22% in recent years.

Read more: Survey: South Africa’s Venture Capital industry is now worth a massive R2bn

According to the report, the solar sector saw the most investor activity, accounting for 32.9% of total funds raised. This is likely attributed to Kenya’s pay-as-you-go solar company M-Kopa’s US$19-million as well as its Tanzania-based counterpart, Off Grid Electric, which raised US$25-million.

Read more: Richard Branson, Al Gore, Steve Case back Kenyan solar startup M-Kopa in $19m round

The fintech sector is the second most favoured industry for investors, securing 29.6% of the total funds. It’s also been the most popular industry in South Africa.

“There will have been many funding rounds across the continent that have taken place quietly,” adds Jackson. “But in terms of demonstrating the development of the ecosystem, these figures are an excellent starting point. We expect to see further growth in 2016.”