2019 brought more world consideration to Africa’s tech scene than maybe any earlier year.
A excessive-profile IPO, visits by each and every Jacks (Ma and Dorsey) and big Chinese language startup funding energized that.
The last 12 months served as a grande finale to 10 years that noticed triple-digit increases in startup formation and VC on the continent.
Here’s a high level intention of the 2019 market events that captured consideration and capped off a decade of rapid growth in African tech.
IPOs
The story of the year is the April IPO on the NYSE of Pan-African e-commerce company Jumia. This was the first itemizing of a VC-backed tech company working in Africa on a well-known world alternate — which brought its contain unpredictability.
Based in 2012, Jumia pioneered powerful of its infrastructure to promote items to consumers online in Africa.
With Nigeria as its detrimental market, the Rocket Web-backed company created accompanying beginning and payments companies and went on to develop online verticals into 14 African worldwide locations (though it only within the near previous exited about a). Jumia now sells all the things from cellphones to diapers, and offers online companies comparable to meals-beginning and classifieds.
Seven years after its operational open, Jumia’s inventory debut kicked off with fanfare in 2019, ideal to be adopted by volatility.
The safe retailer received investor self perception out of the gate, more than doubling its $14.95 opening allotment fee put up-IPO.
That lasted unless Would possibly perchance, when Jumia’s inventory came below attack from brief-vendor Andrew Left, whose firm Citron Learn issued a anecdote accusing the corporate of fraud. The American activist investor’s case was bolstered, in allotment, by a debate that played out across Africa’s tech ecosystem on Jumia’s legitimacy as an African startup, given its (primarily) European senior administration.
Your entire affair was further complex by Jumia’s 2d-quarter earnings call when the corporate disclosed a fraud perpetrated by about a of its staff and sales brokers. Jumia’s CEO Sacha Poignonnec emphasised the subject was closed, financially marginal and no longer the a associated as Andrew Left’s brief-promote claims.
No subject the steadiness, Jumia’s 2019 americaand downs forged a cloud over its inventory with investors. For the reason that company’s third-quarter earnings-call, Jumia’s NYSE allotment-fee has lingered at spherical $6 — lower than half of of its long-established $14.95 opening, and roughly 80% decrease than its excessive.
Even with Jumia’s put up-IPO rocky road, the continent’s leading e-commerce company aloof has a heap of capital and is on amble to generate more than $100 million in revenues in 2019 (albeit with big losses).
The company plans to attenuate costs by producing more earnings from bigger-margin web companies, comparable to payments and classifieds.
There’s a moderately easy equation for Jumia to rebuild shareholder self perception in 2020: steer clear of scandals and amplify revenues over losses. And now that the corporate is publicly traded — with monetary reporting requirements — there’ll be four earnings calls a year to own in mind Jumia’s growth.
Jumia is maybe no longer the continent’s standout IPO for for lots longer. Events in 2019 existing Interswitch changing into the 2d African digital company to list on a world alternate in 2020. The Nigerian fintech firm confirmed to TechCrunch in November it had reached one billion-greenback unicorn valuation, after a (reported) $200 million funding by Visa.
Based in 2002 by Mitchell Elegbe, Interswitch created powerful of the preliminary infrastructure to digitize Nigeria’s (then) predominantly money-primarily primarily based economy. Interswitch has been teasing a public itemizing since 2016, nonetheless delayed it for various reasons. With the corporate’s billion-greenback valuation in 2019, that cease is in all probability to terminate.
“An [Interswitch] IPO is aloof very powerful within the cards; in all probability sometime within the first half of of 2020,” a offer with facts of the recount knowledgeable TechCrunch.
China-Africa goes digital
2019 was the year when Chinese language actors pivoted to African tech. China is fundamental for its strategic relationship with Africa, primarily primarily based (largely) on alternate and infrastructure. Over the previous 10 years, the country has been less engaged within the continent’s digital scene.
That was unless a torrent of funding and partnerships this previous year.
July noticed Chinese language-owned Opera lift $50 million in project spending to give a purchase to its increasing West African digital commercial network, which contains browser, payments and scuttle-hail companies.
In August, San Francisco and Lagos-primarily primarily based fintech startup Flutterwave partnered with Chinese language e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.
In September, China’s Transsion — the ideal smartphone vendor in Africa — listed in an IPO on Shanghai’s unique STAR Market. The company raised ≈ $394 million, about a of which it’s directing toward project funding and operational enlargement in Africa.
The last quarter of 2019 brought a November shock from China in African tech. Extra than 15 Chinese language investors placed over $240 million in three rounds. Transsion-backed particular person payments startup PalmPay raised a $40 million seed, pointing out its map to change into “Africa’s ideal monetary companies platform.”
Chinese language investors additionally backed Opera-owned OPay’s $120 million lift and East-African trucking logistics company Lori Systems’ (reported) $30 million Series B.
In the unique year, TechCrunch will proceed to veil the industry arc of this surge in Chinese language tech funding in Africa. There’ll completely be a different of unique macro facts facets to assassinate, given the debate (and critique) of China’s engagement with Africa.
Nigeria and fintech
On debate, the case might presumably well be made that 2019 was the year when Nigeria change into Africa’s unofficial capital for fintech funding and digital finance startups.
Kenya has held this title hereto, with the local success and world acclaim of its M-Pesa cell-money product. But more founders and VCs are selecting Nigeria as the epicenter for digital finance growth on the continent.
A tough tally of 2019 TechCrunch protection — at the side of previously mentioned rounds — pegs fintech-associated funding within the West African country at spherical $400 million over the last 12 months. That’s a associated to roughly one-third of all startup VC raised for your entire continent in 2018, in accordance to Partech stats.
From OPay to PalmPay to Visa — startups, big finance firms and investors are making Nigeria house-detrimental for their digital finance operations and Africa enlargement methods.
The founder of early-stage price startup ChipperCash, Ham Serunjogi, outlined the crucial to working there. “Nigeria is the ideal economy and most populous country in Africa. Its fintech alternate is one among the most evolved in Africa, up there with Kenya and South Africa,” he knowledgeable TechCrunch in Would possibly perchance.
When your entire 2019 VC numbers are counted, this would presumably well be worth matching up fintech stats for Nigeria to Kenya to query how the worldwide locations compared.
Acquisitions
Tech acquisitions proceed to be a bit rare in Africa, nonetheless there had been several to display in 2019. Two of the continent’s powerhouse tech incubators joined forces in September, when Nigerian innovation heart and seed-fund CcHub received Nairobi-primarily primarily based iHub, for an undisclosed amount.
The acquisition brought collectively Africa’s most extremely effective tech hubs by membership networks, volume of programs, startups incubated and world visibility. It additionally elevated the standing of CcHub’s Bosun Tijani across Africa’s tech ecosystem, as the CEO of the unique joint entity, which additionally has a VC arm.
In heaps of acquisition sigh, French television company Canal+ received the ROK film studio from Nigerian VOD company IROKOtv for an undisclosed amount. The deal save ROK founder and producer Mary Njoku responsible of a brand unique group with bigger scope and resources.
Many originate air Africa aren’t aware that Nigeria’s Nollywood is the Hollywood of the continent, and one among the ideal film industries within the enviornment (by manufacturing volume). Canal+ knowledgeable TechCrunch it seems to be to elevate Mary and the Nollywood manufacturing ethos to assassinate lisp in French-speaking African worldwide locations.
Other notable 2019 African tech takeovers included Kenyan web company BRCK’s acquisition of ISP Surf, Nigerian digital-lending startup OneFi’s Magnify prefer and Merck KGaa’s make a selection of Kenya-primarily primarily based online healthtech company ConnectMed.
Moto scuttle-hail mania
In 2019, Africa’s bike scuttle-hail market — worth an estimated $4 billion — noticed a flurry of funding and enlargement by startups taking a look to scale on-demand taxi companies. Uber and Rush got into the bike taxi industry in Africa in 2018.
A different of local and foreign startups own continued to develop in key worldwide locations, comparable to Nigeria, Uganda and Kenya.
A fight for funding and market allotment emerged in Nigeria in 2019, between key moto scuttle-hail startups MAX.ng, Gokada and Opera-owned ORide.
The on-demand bike market in Africa has attracted foreign funding and moved toward EV vogue. In Would possibly perchance, MAX.ng raised a $7 million Series A spherical with participation from Yamaha and is the usage of a fraction to pilot renewable energy powered e-motorcycles in Africa.
In August, the government of Rwanda presented a national policy to allotment out gasoline-bike taxis altogether in favor of e-motos, in partnership with early-stage EV startup Ampersand.
Recent funds
The previous year noticed several unique funding initiatives for Africa’s startups. Senegalese VC investor Marieme Diop spearheaded Dakar Network Angels, a seed-fund for startups in French-speaking Africa — or 24 of the continent’s 54 worldwide locations.
Africinvest teamed up with Cathay Innovation to narrate the Cathay Africinvest Innovation Fund, a $100+ million capital pool aimed toward Series A to C-stage startup investments in fintech, logistics, AI, ag tech and education tech.
Accion Venture Lab launched a $24 million fintech fund originate to African startups.
And Naspers offered more particulars on who can pitch to its 1.4 billion rand (≈$100 million) Naspers Foundry fund, which made its first funding in online cleansing companies company SweepSouth.
Closed up shop
Indulge in all tech ecosystem, no longer every startup in Africa killed it or even continued to tread water in 2019. Two e-commerce firms — DealDey in Nigeria and Afrimarket in Ivory Flit — closed up digital shop.
Southern Africa’s Econet Media shut down its Kwese TV digital entertainment industry in August.
And South Africa-primarily primarily based, Pan African-focused cryptocurrency price startup Wala ceased operations in June. Founder Tricia Martinez named the continent’s dejected infrastructure as one among the culprits to shutting down. A that you just may presumably well presumably imagine signal to the startup’s demise might presumably were its 2017 ICO, the put Wala netted ideal 4% of its $30 million token offering.
Africa’s startups walk world
2019 noticed more startups develop to unique markets out of the country merchandise and industry items developed in Africa. In March, FlexClub — a South African project that matches investors and drivers to vehicles for scuttle-hailing companies — presented its enlargement to Mexico in a partnership with Uber.
In Would possibly perchance, Extra Crunch profiled three African-founded fintech startups — Flutterwave, Migo and ChipperCash — increasing their industry items strategically in Africa toward plans to develop globally.
By December, Migo (previously branded Mines) had presented its enlargement to Brazil on a $20 million Series B lift.
2020 and previous
As we query to what might presumably well are available within the market within the unique year and decade for African tech, it’s telling to query abet. Ten years within the past, there had been somewhat heaps of “if” questions about whether the continent’s ecosystem might presumably well assassinate certain events: billion-greenback startup valuations, IPOs on main exchanges, world enlargement, funding from the enviornment’s high VCs.
All those questionable events of the previous own change into truth in African tech, despite the fact that about a of them are aloof in low abundance.
There’s no crystal ball for any innovation ecosystem — no longer the least Africa’s — nonetheless there are several things I’ll be on the lookout for in 2020 and previous.
In the near term I’ll delivery with what Twitter/Sq. CEO Jack Dorsey might presumably well accumulate spherical Bitcoin and cryptocurrency on his return to Africa (lookout for an upcoming TechCrunch feature on this).
I’ll additionally be aware the following-allotment of e-commerce in Africa, which can pit Jumia more competitively against DHL’s Africa eShop, Opera and China’s Alibaba (which hasn’t yet entered Africa in plump).
On a long-term basis, a vogue to own a look at is how the continent’s first wave of millionaire and billionaire tech-founders might presumably well disrupt 21st century dynamics in Africa spherical politics, vitality and philanthropy — hopefully for the upper.
Extra notable 2019 Africa-associated protection @TechCrunch
- Nigeria’s #StopRobbingUs advertising and marketing campaign might presumably well spur tech advocacy neighborhood, CEOs assert
- Africa can list more gazelles at house than unicorn IPOs out of the country
- Kenya’s Twiga Meals eyes West Africa after $30M lift led by Goldman
- Africa-focused Andela cuts 400 staff as it confirms $50M in earnings
- Facebook’s most modern anecdote purge exposes Africa’s misinformation trouble
- Ethiopia’s explain to change into an African startup hub hinges on connectivity
- Lessons from M-Pesa for Africa’s unique VC-rich fintech startups
