Africa's New Tech Startups Are in a League of Their Own

Startup culture
Startup culture | © Dennis Skley / Flickr

Culture Trip Writer

Africa’s tech scene is soaring and picking momentum. 2017 proved to be the best year yet, since tracking began, as African tech startups raised funds to a tune of US$195 million, a 51 percent rise compared to the previous years.

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Disrupt Africa, an entrepreneurship portal, has released a funding report that illustrates the number of African startups has shot up from 146 companies in 2016 to 159 companies last year. This goes to show that the days of speculation, if the African tech narrative is real or hyped up, are over. The investors are now confident and willing to invest in African ventures.

African tech startups are stirring up things from healthcare to farming and everything in between. However, fintech was the biggest attraction of the investment with 45 fintech startups raising a third of the total funding raised in 2017. The success of mobile money, and innovations like Kenya’s M-Pesa that works across East Africa has continued to show the potential for the need of models that provide services to under-served segments of the population and small businesses.

Uganda’s e-health startup team, thinkIT Limited

Uganda placed herself on the map with two grantees LipaMobile — a cashless transaction system used in schools to help families plan, save and manage educational expenses — and Ensibuuko, a platform with a cloud-based core banking software customized for savings and credit cooperatives.

Agritech and e-health offer a perfect balance to motivate investors. They cover a vast untapped market with need of innovative solutions. Investors are always eager to back up such ventures operating in these areas as these investments offer both substantial profits and impact in communities.

Nearly 1 billion people in Africa are smallholding farmers. It’s no wonder that both the entrepreneurs and investors are tapping into the agro-tech space. The agriculture sector employs 65 percent of the continent’s labor force. And in 2017, agri-tech startups raised a total of US$13.2 million registering a 203 percent rise since 2016.

South Africa, Nigeria and Kenya continue to hold their positions as the top investment destinations in Africa. However, last year saw other markets such as Egypt, Ghana, Morocco emerge as possible hot-spots.

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