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Over a third of the over R500-million rand in venture capital (VC) investments directed to SA tech startups so far this year, has gone to startups in the fintech sector, reveal new figures compiled by Ventureburn on disclosed deals.
Ventureburn’s analysis — which considered only disclosed investments involving tech companies of under seven years old — reveals that in the first six months of the year fintech startups netted R188.7-million in eight disclosed SA tech startup deals, or about 37% of the R508.1-million of the total 18 disclosed deals (see the graphic, below).
The 10 biggest deals raised R444.4-million (see this story).
Fintech startups account for over a third of the over R500m rand in VC deals in SA tech startups so far this year
The total figure of R508.1-million is less than half of the almost R1.2-billion invested in 25 disclosed deals in the six months to end 31 December 2018, a figure which was distorted by three significant deals — two in startup JUMO and one in Yoco — which together accounted for R1-billion of total deal value. Fintech deals made up 10 of these 25 disclosed deals.
The R188.7-million in fintechs included:
- Two deals worth R30.6-million in insurtech by InvestSure (R9.6m) and Inclusivity Solutions (R21m). The investment amounts in two other insurtech deals — involving Ctrl, Nobuntu — were not disclosed.
- Three deals totalling R45.8-million in the crypto sector that were disclosed, namely: Centbee (R17.4m), Coindirect (R17.4m) and (Revix (R11m). A further deal (Ovex) was not disclosed.
There were a range of various kinds of investors involved in SA fintech startups in the last six months. They included:
- Both large local financial companies such as South Africa’s short-term insurer Santam, Allan Gray, JSE-listed investment group Sabvest and international firms Hannover Re Africa subsidiaries Lireas Holdings and Compass Insure.
- Venture capital and investment houses included Blue Garnet Ventures, 4Di Capital and Kalon Venture Partners and angel investor Michael Jordaan.
- International investors such as Goodwell Investments, London-based investor Concentric, the World Bank’s IFC and Quona Capital and Nairobi based Savannah Fund also took part.
AI, healthtech, proptech
Other hot sectors in terms of investment are artificial intelligence, healthtech and proptech.
Healthtech saw two deals, including Rapiddeploy’s R166-million Series-A round from US venture capital fund GreatPoint Ventures and innovation fund Samsung Next — the biggest deal so far announced this year in a SA tech startup (see this story). It follows investments in the previous six-month period in Vula Mobile ($70,000) and PharmaScout.
In contrast, other vertical sectors were dominated by local investors such as Paper Plane Ventures, SA hardware tech incubator Savant, Kalon Venture Partners, Naspers Foundry and in one particular investment (Intergreatme) local small investors that used equity crowdfunding Uprise.Africa.
Here is a list of all 26 disclosed and undisclosed investments in SA tech startups reported in the six months to 30 June 2019:
- Fintech: Ctrl, Nobuntu, InvestSure (R9.6m), Inclusivity Solutions (R21m), Ovex, Centbee (R17.4m), Coindirect (R17.4m), Revix (R11m) Ozow, Fundrr, The Sun Exchange (R3.5m), FlexClub (R16.8m) Lulalend (R90m)
- Artificial intelligence: Aerobotics (R29m) and Cortex Logic.
- Healthtech: Rapiddeploy (R167m) and Smartblade (R9m)
- Proptech: Flow (R20m), DigsConnect (R12m)
- Regtech: Intergreatme (R32m)
- Marketing and media: Fancam (R1.4m)
- Ondemand platforms: SweepSouth (R30m)
- Other platforms: GovChat (R20m), Peepz, Vidr
In all over half, or 15 of the 26 startups involved in the above investments are based in Cape Town with a further one located in nearby Stellenbosch. A total of nine startups are based in Johannesburg (five of these in fintech) and another in Pretoria.
Featured image: nattanan23 via Pixabay