Business / Economy
Africa and the Start-Up economy
26 Mar 2018 at 12:38hrs | Views
Disrupt Africa, an entrepreneurship portal, has just released a new study that shows that the number of African tech startups that succeeded in raising funding is growing. In 2017, 159 companies were able to raise funds, up from 146 companies in 2016 and a significant increase when compared to 125 start-ups that attracted investment in 2015.
This takes African startups to an all-time record high of US$195,060,845. Gabriella Mulligan, co-founder of Disrupt Africa commented that "The tech entrepreneurship ecosystem is really coming into its own across Africa. There have been years of speculation as to whether the tech-first Africa narrative is real or just hype, but these numbers emerging in our research show undeniably that African startups are impacting all aspects of daily life and service delivery."
African startups are focusing on ways to use technology for everything from home cleaning to healthcare. Financial technology is one of the most lucrative sectors -- almost one third of all funding went to fintech companies in 2017 and this proportion of funding seems to be remaining stable.
Other sectors include ecommerce which saw little support from investors in 2016 but rebounded in 2017. In 2017 ecommerce start ups in Africa grew 350% which allowed them tocollect over US$16 million in investment capital over the course of the year. .
Agri-tech is also attracting investors and entrepreneurs alike. Agri-tech is on an upward trajectory. Funding into this sector grew 203% in 2017.
Mulligan says that "Areas like agri-tech and e-health offer the perfect balancing of motivations for investors. With vast untapped markets in need of innovative new solutions, and the substantial impact element of ventures operating in these areas, these investments offer both sizeable returns and impact."
African Start Ups to Watch
Some of the most promising African Start-Ups to watch in 2018 are:
Sokowatch
Sokowatch comes from Kenya. It gives small businesses in East Africa a new and more user-friendly method of ordering and delivering. Sokowatch was launched in 2013 and focuses on offering small shops a convenient method of placing orders from multinational suppliers. The order is placed via SMS and is then processed through the Sokowatch system. The system notifies nearby delivery agents who bring the order to the shop within 24 hours.
Sokowatch now supplies over 5000 shops in Nairobi and has moved into Dar es Salaam where it picked up an additional 1000 clients. The company is now siming to expand into Mombassa, Kigali and Kampala. Sokowatch was named a winner of the Innotribe Startup Challenge and is a World Bank XL Africa accelerator program, leading it to secure significant investment.
Ways to Cap
Ways to Cap is designed to give African businesses and online casino venues a way to buy and sell products. Through this company African businesses can identify products, verify them, obtain insurance and financing, ensure payments security and manage shipments.
This start-up has received $120,000 US in funding and was selected to join the Silicon Valley-based Y Combinator where staffers received three months of intensive mentoring and training. The participants performed so well that Y Combinator, Battery Ventures and other parties gave it an additional boost in funding.
hearX
hearX, from South Africa, is a start-up that was developed in 2013 at the University of Pretoria. Its first product is hearScreen, a smartphone app that detects hearing loss. Once a hearing loss has been identified the app will link the patient to appropriate health services.
hearX demonstrates how African start-ups can aid their population in securing better access to health care. Additional products include a suite of cloud-based health solutions that assist individuals find decentralized, how-cost ear and hearing care. To date the app has aided more than 70,000 people.
hearX has raised over $2.8 million US so far. It also raised money on Indiegogo, a crowdfunding platform and is attracting attention worldwide.
Farmerline
Farmerline comes from Ghana where it aims to connect small-scale farmers to products, resources and information services so that they can boost their incomes. Farmerline has registered 200,000 farmers to date in Western Africa.
Farmerline was selected to join Switzerland-based zero-equity, multi-corporate Kickstart Accelerator and won the King Baudouin African Development Prize which was worth EUR 75,000 in prize money. It has been named second-best start-up in the food vertical. There are now plans for Farmerline to open an office in Zurich next year so that the program can expand..
Intelworld
Entrepreneurs in Uganda developed the Intelworld Xente which is a mobile commerce platform. Via Xente customers from around the world can buy products from Ugandan merchants with options to pay in installments, with mobile money or with credit cards. Customers can adjust their payments to pay immediately or defer their payment. Over 50 Ugandan businesses use Xente which was developed in 2014 but is only now gaining attention. It's used for bill payments, TV subscriptions, ticket purchases and airtime recharge. The companies that use Xente have sold services to over 3000 customers worldwide so far.
In 2018 the developers want to extend the service to vendors who sell physical products. They are looking to bring investors onboard to help push the start-up through a rapid growth phase.
FilKhedma
Fil Khedma, from Egypt, is looking to expand in 2018, thanks to recently secured funding. The start-up presently serves Cairo as an online marketplace for home maintenance and improvement. It connects home-owners to plumbers, carpenters, electricians, air conditioning maintenance and appliance repair people.
Algebra Ventures and Glint provided a funding round in September which will be added to funding from KiAngel to allow FilKhedma to revamp its technology and expand its reach to new locations. The company is focused on growing its userbase and expanding development, marketing teams and other operations.
This takes African startups to an all-time record high of US$195,060,845. Gabriella Mulligan, co-founder of Disrupt Africa commented that "The tech entrepreneurship ecosystem is really coming into its own across Africa. There have been years of speculation as to whether the tech-first Africa narrative is real or just hype, but these numbers emerging in our research show undeniably that African startups are impacting all aspects of daily life and service delivery."
African startups are focusing on ways to use technology for everything from home cleaning to healthcare. Financial technology is one of the most lucrative sectors -- almost one third of all funding went to fintech companies in 2017 and this proportion of funding seems to be remaining stable.
Other sectors include ecommerce which saw little support from investors in 2016 but rebounded in 2017. In 2017 ecommerce start ups in Africa grew 350% which allowed them tocollect over US$16 million in investment capital over the course of the year. .
Agri-tech is also attracting investors and entrepreneurs alike. Agri-tech is on an upward trajectory. Funding into this sector grew 203% in 2017.
Mulligan says that "Areas like agri-tech and e-health offer the perfect balancing of motivations for investors. With vast untapped markets in need of innovative new solutions, and the substantial impact element of ventures operating in these areas, these investments offer both sizeable returns and impact."
African Start Ups to Watch
Some of the most promising African Start-Ups to watch in 2018 are:
Sokowatch
Sokowatch comes from Kenya. It gives small businesses in East Africa a new and more user-friendly method of ordering and delivering. Sokowatch was launched in 2013 and focuses on offering small shops a convenient method of placing orders from multinational suppliers. The order is placed via SMS and is then processed through the Sokowatch system. The system notifies nearby delivery agents who bring the order to the shop within 24 hours.
Sokowatch now supplies over 5000 shops in Nairobi and has moved into Dar es Salaam where it picked up an additional 1000 clients. The company is now siming to expand into Mombassa, Kigali and Kampala. Sokowatch was named a winner of the Innotribe Startup Challenge and is a World Bank XL Africa accelerator program, leading it to secure significant investment.
Ways to Cap
Ways to Cap is designed to give African businesses and online casino venues a way to buy and sell products. Through this company African businesses can identify products, verify them, obtain insurance and financing, ensure payments security and manage shipments.
This start-up has received $120,000 US in funding and was selected to join the Silicon Valley-based Y Combinator where staffers received three months of intensive mentoring and training. The participants performed so well that Y Combinator, Battery Ventures and other parties gave it an additional boost in funding.
hearX
hearX, from South Africa, is a start-up that was developed in 2013 at the University of Pretoria. Its first product is hearScreen, a smartphone app that detects hearing loss. Once a hearing loss has been identified the app will link the patient to appropriate health services.
hearX demonstrates how African start-ups can aid their population in securing better access to health care. Additional products include a suite of cloud-based health solutions that assist individuals find decentralized, how-cost ear and hearing care. To date the app has aided more than 70,000 people.
hearX has raised over $2.8 million US so far. It also raised money on Indiegogo, a crowdfunding platform and is attracting attention worldwide.
Farmerline
Farmerline comes from Ghana where it aims to connect small-scale farmers to products, resources and information services so that they can boost their incomes. Farmerline has registered 200,000 farmers to date in Western Africa.
Farmerline was selected to join Switzerland-based zero-equity, multi-corporate Kickstart Accelerator and won the King Baudouin African Development Prize which was worth EUR 75,000 in prize money. It has been named second-best start-up in the food vertical. There are now plans for Farmerline to open an office in Zurich next year so that the program can expand..
Intelworld
Entrepreneurs in Uganda developed the Intelworld Xente which is a mobile commerce platform. Via Xente customers from around the world can buy products from Ugandan merchants with options to pay in installments, with mobile money or with credit cards. Customers can adjust their payments to pay immediately or defer their payment. Over 50 Ugandan businesses use Xente which was developed in 2014 but is only now gaining attention. It's used for bill payments, TV subscriptions, ticket purchases and airtime recharge. The companies that use Xente have sold services to over 3000 customers worldwide so far.
In 2018 the developers want to extend the service to vendors who sell physical products. They are looking to bring investors onboard to help push the start-up through a rapid growth phase.
FilKhedma
Fil Khedma, from Egypt, is looking to expand in 2018, thanks to recently secured funding. The start-up presently serves Cairo as an online marketplace for home maintenance and improvement. It connects home-owners to plumbers, carpenters, electricians, air conditioning maintenance and appliance repair people.
Algebra Ventures and Glint provided a funding round in September which will be added to funding from KiAngel to allow FilKhedma to revamp its technology and expand its reach to new locations. The company is focused on growing its userbase and expanding development, marketing teams and other operations.
Source - Agencies
