2019 brought extra world attention to Africa’s tech scene than presumably any old year.
A high-profile IPO, visits by both Jacks (Ma and Dorsey) and huge Chinese startup funding energized that.
The final 12 months served as a grande finale to 10 years that noticed triple-digit increases in startup formation and VC on the continent.
Right here’s an outline of the 2019 market events that captured attention and capped off a decade of like a flash enhance in African tech.
IPOs
The legend of the year is the April IPO on the NYSE of Pan-African e-commerce firm Jumia. This become once the first itemizing of a VC-backed tech firm running in Africa on a well-known world exchange — which brought its have confidence unpredictability.
Founded in 2012, Jumia pioneered powerful of its infrastructure to sell items to shoppers online in Africa.
With Nigeria as its nefarious market, the Rocket Web-backed firm created accompanying transport and payments providers and products and went on to enlarge online verticals into 14 African countries (even supposing it lately exited a couple of). Jumia now sells all the pieces from cellphones to diapers, and offers online providers and products such as food-transport and classifieds.
Seven years after its operational open, Jumia’s stock debut kicked off with fanfare in 2019, handiest to be adopted by volatility.
The get retailer gained investor self belief out of the gate, extra than doubling its $14.95 opening share designate put up-IPO.
That lasted except Would possibly perchance perchance simply, when Jumia’s stock came below assault from fast-vendor Andrew Left, whose firm Citron Learn issued a document accusing the firm of fraud. The American activist investor’s case become once bolstered, in section, by a debate that conducted out all the plan in which by Africa’s tech ecosystem on Jumia’s legitimacy as an African startup, given its (basically) European senior management.
Your complete affair become once further advanced by Jumia’s 2nd-quarter earnings name when the firm disclosed a fraud perpetrated by some of its staff and sales agents. Jumia’s CEO Sacha Poignonnec emphasised the topic become once closed, financially marginal and no longer the identical as Andrew Left’s fast-sell claims.
Without reference to the balance, Jumia’s 2019 u.s.a.and downs cast a cloud over its stock with investors. Since the firm’s third-quarter earnings-name, Jumia’s NYSE share-designate has lingered at around $6 — lower than half of its customary $14.95 opening, and roughly 80% decrease than its high.
Even with Jumia’s put up-IPO rocky avenue, the continent’s main e-commerce firm peaceful has a heap of capital and is on tempo to generate extra than $100 million in revenues in 2019 (albeit with big losses).
The firm plans to diminish charges by producing extra earnings from elevated-margin web providers and products, such as payments and classifieds.
There’s a rather easy equation for Jumia to rebuild shareholder self belief in 2020: steer determined of scandals and expand revenues over losses. And now that the firm is publicly traded — with financial reporting requirements — there’ll be four earnings calls a year to build in suggestions Jumia’s progress.
Jumia may per chance presumably no longer be the continent’s standout IPO for a long way longer. Events in 2019 existing Interswitch turning into the 2nd African digital firm to checklist on a world exchange in 2020. The Nigerian fintech firm confirmed to TechCrunch in November it had reached one billion-buck unicorn valuation, after a (reported) $200 million funding by Visa.
Founded in 2002 by Mitchell Elegbe, Interswitch created powerful of the preliminary infrastructure to digitize Nigeria’s (then) predominantly money-basically basically based economy. Interswitch has been teasing a public itemizing since 2016, nevertheless delayed it for diverse reasons. With the firm’s billion-buck valuation in 2019, that live is susceptible to complete.
“An [Interswitch] IPO is peaceful very powerful in the cards; likely sometime in the first half of 2020,” a source with files of the divulge instructed TechCrunch.
China-Africa goes digital
2019 become once the year when Chinese actors pivoted to African tech. China is significant for its strategic relationship with Africa, basically basically based (largely) on commerce and infrastructure. Over the final 10 years, the country has been much less engaged in the continent’s digital scene.
That become once except a torrent of funding and partnerships this past year.
July noticed Chinese-owned Opera carry $50 million in enterprise spending to improve its increasing West African digital business network, which contains browser, payments and hump-hail providers and products.
In August, San Francisco and Lagos-basically basically based fintech startup Flutterwave partnered with Chinese e-commerce firm Alibaba’s Alipay to give digital payments between Africa and China.
In September, China’s Transsion — the most intelligent smartphone vendor in Africa — listed in an IPO on Shanghai’s novel STAR Market. The firm raised ≈ $394 million, some of which it’s directing toward enterprise funding and operational growth in Africa.
The final quarter of 2019 brought a November surprise from China in African tech. Bigger than 15 Chinese investors placed over $240 million in three rounds. Transsion-backed client payments startup PalmPay raised a $40 million seed, pointing out its goal to develop into “Africa’s finest financial providers and products platform.”
Chinese investors also backed Opera-owned OPay’s $120 million carry and East-African trucking logistics firm Lori Methods’ (reported) $30 million Sequence B.
Within the novel year, TechCrunch will continue to cowl the commerce arc of this surge in Chinese tech funding in Africa. There’ll absolutely be a preference of unusual macro news facets to fabricate, given the debate (and critique) of China’s engagement with Africa.
Nigeria and fintech
On debate, the case is susceptible to be made that 2019 become once the year when Nigeria develop 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 mobile-money product. Nonetheless extra founders and VCs are selecting Nigeria as the epicenter for digital finance enhance on the continent.
A rough tally of 2019 TechCrunch protection — including beforehand talked about rounds — pegs fintech-related funding in the West African country at around $400 million over the final 12 months. That’s related to roughly one-third of all startup VC raised for the total continent in 2018, according to Partech stats.
From OPay to PalmPay to Visa — startups, big finance companies and investors are making Nigeria dwelling-nefarious for his or her digital finance operations and Africa growth programs.
The founder of early-stage cost startup ChipperCash, Ham Serunjogi, explained the crucial to running there. “Nigeria is the most intelligent economy and most populous country in Africa. Its fintech industry is one amongst the most evolved in Africa, up there with Kenya and South Africa,” he instructed TechCrunch in Would possibly perchance perchance simply.
When the total 2019 VC numbers are counted, this may per chance presumably be rate matching up fintech stats for Nigeria to Kenya to appear how the countries compared.
Acquisitions
Tech acquisitions continue to be severely uncommon in Africa, nevertheless there had been several to existing in 2019. Two of the continent’s powerhouse tech incubators joined forces in September, when Nigerian innovation center and seed-fund CcHub obtained Nairobi-basically basically based iHub, for an undisclosed amount.
The acquisition brought collectively Africa’s most extremely effective tech hubs by membership networks, quantity of applications, startups incubated and world visibility. It also elevated the standing of CcHub’s Bosun Tijani all the plan in which by Africa’s tech ecosystem, as the CEO of the novel joint entity, which also has a VC arm.
In other acquisition teach, French television firm Canal+ obtained the ROK film studio from Nigerian VOD firm IROKOtv for an undisclosed amount. The deal set apart ROK founder and producer Mary Njoku to blame of a brand novel organization with higher scope and sources.
Many outdoor Africa aren’t mindful that Nigeria’s Nollywood is the Hollywood of the continent, and one amongst the most intelligent film industries in the realm (by manufacturing quantity). Canal+ instructed TechCrunch it appears to be like to be like to bring Mary and the Nollywood manufacturing ethos to create divulge in French-speaking African countries.
Other well-known 2019 African tech takeovers integrated Kenyan web firm BRCK’s acquisition of ISP Surf, Nigerian digital-lending startup OneFi’s Magnify engage and Merck KGaa’s engage of Kenya-basically basically based online healthtech firm ConnectMed.
Moto hump-hail mania
In 2019, Africa’s bike hump-hail market — rate an estimated $4 billion — noticed a flurry of funding and growth by startups taking a look to scale on-question taxi providers and products. Uber and Skedaddle obtained into the bike taxi commerce in Africa in 2018.
A preference of local and foreign startups have continued to develop in key countries, such as Nigeria, Uganda and Kenya.
A battle for funding and market share emerged in Nigeria in 2019, between key moto hump-hail startups MAX.ng, Gokada and Opera-owned ORide.
The on-question bike market in Africa has attracted foreign funding and moved toward EV pattern. In Would possibly perchance perchance simply, MAX.ng raised a $7 million Sequence A round with participation from Yamaha and is the usage of a portion to pilot renewable energy powered e-bikes in Africa.
In August, the authorities of Rwanda announced a national policy to section out gas-bike taxis altogether in favor of e-motos, in partnership with early-stage EV startup Ampersand.
Unusual funds
The past year noticed several novel funding initiatives for Africa’s startups. Senegalese VC investor Marieme Diop spearheaded Dakar Community Angels, a seed-fund for startups in French-speaking Africa — or 24 of the continent’s 54 countries.
Africinvest teamed up with Cathay Innovation to protest the Cathay Africinvest Innovation Fund, a $100+ million capital pool aimed at Sequence A to C-stage startup investments in fintech, logistics, AI, ag tech and education tech.
Accion Conducting Lab launched a $24 million fintech fund originate to African startups.
And Naspers supplied extra critical facets on who can pitch to its 1.4 billion rand (≈$100 million) Naspers Foundry fund, which made its first funding in online cleaning providers and products firm SweepSouth.
Closed up shop
Love several tech ecosystem, no longer every startup in Africa killed it or even continued to tread water in 2019. Two e-commerce companies — DealDey in Nigeria and Afrimarket in Ivory Cruise — closed up digital shop.
Southern Africa’s Econet Media shut down its Kwese TV digital leisure commerce in August.
And South Africa-basically basically based, Pan African-focused cryptocurrency cost startup Wala ceased operations in June. Founder Tricia Martinez named the continent’s sad infrastructure as one amongst the culprits to shutting down. A that you just may per chance imagine signal to the startup’s death may per chance presumably need been its 2017 ICO, where Wala netted handiest 4% of its $30 million token providing.
Africa’s startups toddle world
2019 noticed extra startups enlarge to novel markets foreign products and commerce units developed in Africa. In March, FlexClub — a South African enterprise that suits investors and drivers to vehicles for hump-hailing providers and products — announced its growth to Mexico in a partnership with Uber.
In Would possibly perchance perchance simply, Additional Crunch profiled three African-based fintech startups — Flutterwave, Migo and ChipperCash — setting up their commerce units strategically in Africa toward plans to enlarge globally.
By December, Migo (beforehand branded Mines) had announced its growth to Brazil on a $20 million Sequence B carry.
2020 and beyond
As we glance to what may per chance presumably approach in the novel year and decade for African tech, it’s telling to appear again. Ten years ago, there had been numerous “if” questions on whether or no longer the continent’s ecosystem may per chance presumably create definite events: billion-buck startup valuations, IPOs on well-known exchanges, world growth, funding from the realm’s prime VCs.
All those questionable events of the past have develop into fact in African tech, even if some of them are peaceful in low abundance.
There’s no crystal ball for any innovation ecosystem — no longer the least Africa’s — nevertheless there are several issues I’ll be on the lookout for in 2020 and beyond.
Within the conclude to term I’ll originate up with what Twitter/Square CEO Jack Dorsey may per chance presumably quit around Bitcoin and cryptocurrency on his return to Africa (lookout for an upcoming TechCrunch feature on this).
I’ll also be aware the next-section of e-commerce in Africa, which can pit Jumia extra competitively against DHL’s Africa eShop, Opera and China’s Alibaba (which hasn’t yet entered Africa in plump).
On a long-term foundation, a pattern to be aware is how the continent’s first wave of millionaire and billionaire tech-founders may per chance presumably disrupt 21st century dynamics in Africa around politics, vitality and philanthropy — hopefully for the upper.
More well-known 2019 Africa-related protection @TechCrunch
- Nigeria’s #StopRobbingUs advertising and marketing campaign may per chance presumably spur tech advocacy neighborhood, CEOs train
- Africa can checklist extra gazelles at dwelling than unicorn IPOs foreign
- Kenya’s Twiga Foods eyes West Africa after $30M carry led by Goldman
- Africa-focused Andela cuts 400 team as it confirms $50M in earnings
- Fb’s latest legend purge exposes Africa’s misinformation divulge
- Ethiopia’s narrate to develop into an African startup hub hinges on connectivity
- Lessons from M-Pesa for Africa’s novel VC-rich fintech startups
