In 2019, Africa’s tech scene got more global attention than perhaps any previous year. Twitter CEO Jack Dorsey and Chinese business magnate, Jack Ma both visited the continent. The year also saw triple-digit increases in startup formation and Venture Capital on the continent. Here’s a general summary of the 2019 rapid growth in African tech.
IPOs
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In April, Pan-African e-commerce company Jumia listed its IPO on the NYSE. It became the first listing of a VC-backed tech company operating in Africa on a major global exchange
With Nigeria being its primary market, Jumia created additional delivery and payments services and later expanded into 14 African countries, although it recently exited a few. Jumia now sells virtually everything from mobile phones to groceries and offers online services such as food-delivery and classifieds.
In May, however, Jumia’s stock came under attack from short-seller Andrew Left, whose firm Citron Research issued a report accusing the company of fraud. The case was bolstered, in part, by a debate that played out across Africa’s tech ecosystem on Jumia’s legitimacy as an African startup, given its (primarily) European senior management.
The company plans to reduce costs by generating more revenue from higher-margin internet services, such as payments and classifieds.
Events in 2019 point to Interswitch becoming the second African digital company to list on a global exchange in 2020, according to Jake Bright of TechCrunch. The Nigerian fintech firm confirmed in November that it had reached a billion-dollar unicorn valuation, after a reported $200 million investment by Visa.
Interswitch was founded in 2002 by Mitchell Elegbe. Back then, it created much of the initial infrastructure to digitize Nigeria’s predominantly cash-based economy. The company has been teasing a public listing since 2016 but delayed it for various reasons. With its billion-dollar valuation in 2019, that pause is likely to end soon.
China-Africa Alliance goes digital
In July, Chinese-owned Opera raised $50 million in venture spending to support its growing West African digital commercial network, which includes a browser, payments and ride-hail services.
In August, technology startup Flutterwave partnered with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.
September saw China’s Transsion — the largest smartphone seller in Africa — listed in an IPO on Shanghai’s new STAR Market. The company raised $394 million, some of which it is directing toward venture funding and operational expansion in Africa.
The last quarter of 2019 brought an influx of investment from China into African tech. More than 15 Chinese investors placed over $240 million in three rounds. PalmPay, a Transsion-backed consumer payments startup raised a $40 million seed, stating its goal to become “Africa’s largest financial services platform.”
Chinese investors also backed Opera-owned OPay’s $120 million raise and East-African trucking logistics company Lori Systems’ (reported) $30 million Series B.
Nigeria and fintech
2019 was the year that Nigeria became Africa’s (unofficial) capital for fintech investment and digital finance startups.
Kenya has held this title before now, with the local success and global acclaim of its M-Pesa mobile money product. But more founders and VCs are opting for Nigeria as the epicentre for digital finance growth on the continent.
A rough tally of 2019 TechCrunch coverage — including previously mentioned rounds — pegs fintech-related investment in Nigeria at around $400 million over the last 12 months. That’s equivalent to roughly one-third of all startup VC raised for the entire continent in 2018, a Partech stats shows.
From OPay to PalmPay to Visa — startups, big finance companies and investors are making Nigeria home-base for their digital finance operations and Africa expansion strategies.
Acquisitions
Two of Africa’s powerhouse tech incubators collaborated in September, when Nigerian innovation centre and seed-fund CcHub acquired Nairobi-based iHub, for an undisclosed amount.
The acquisition brought together Africa’s most powerful tech hubs by membership networks, the volume of programs, startups incubated and global visibility. It also elevated the standing of CcHub’s Bosun Tijani across Africa’s tech ecosystem, as the CEO of the new joint entity, which also has a VC arm.
Other notable 2019 African tech takeovers included Kenyan internet company BRCK’s acquisition of ISP Surf, Nigerian digital-lending startup OneFi’s Amplify buy and Merck KGaa’s purchase of Kenya-based online health tech company ConnectMed.
Africa’s motorcycle ride-hail market
In 2019, Africa’s motorcycle ride-hail market — worth an estimated $4 billion — saw a rush of investment and expansion by startups looking to scale on-demand taxi services. Uber and Bolt got into the motorcycle taxi business in Africa in 2018.
A number of local and foreign startups have continued to grow in key countries, such as Nigeria, Uganda and Kenya.
A battle for funding and market share emerged in Nigeria in 2019, between key moto ride-hail startups MAX.ng, Gokada and Opera-owned ORide.
The on-demand motorcycle market in Africa has attracted foreign investment and moved toward EV development. In May, MAX.ng raised a $7 million Series A round with participation from Yamaha and is using a portion to pilot renewable energy powered e-motorcycles in Africa.
Closed up ventures
Just like any tech ecosystem anywhere else, not every startup in Africa killed it or even continued to run in 2019. Two e-commerce companies — DealDey in Nigeria and Afrimarket in Ivory Coast — closed up digital shop.
Southern Africa’s Econet Media shut down its Kwese TV digital entertainment business in August.
South Africa-based, Pan African-focused cryptocurrency payment startup Wala ceased operations in June. Founder Tricia Martinez named the continent’s poor infrastructure as one of the culprits to shutting down.
African startups went global
2019 saw more startups expand to new markets abroad products and business models developed in Africa. In March, FlexClub — a South African venture that matches investors and drivers to cars for ride-hailing services — announced its expansion to Mexico in a partnership with Uber.
Three African-founded fintech startups — Flutterwave, Migo and ChipperCash — started developing their business models strategically in Africa toward plans to expand globally.
By December, Migo (formerly branded Mines) had announced its expansion to Brazil on a $20 million Series B raise.
