Disrupt Africa announced that 210 African start-ups secured $334.5 million worth of investments in 2018, with Nigeria leading other countries as the premier investment destination in the continent.
In its annual African Tech Startups Funding Report for 2018, the company reveals that Nigeria secured $94,912,000 funding with 58 start-ups from various sectors.
According to the report, which tracks total amount of funding raised by African tech start-ups each year, 210 start-ups raised a total of $334,520,500 in 2018, an amount that was a substantial leap from 2017.
In 2018, the number of start-ups that raised funds grew by 32.1 percent, and total funding jumped by an impressive 71.5 percent. A key finding of the report was the emergence of Nigeria as Africa’s start-up funding hub, after years of playing second fiddle to South Africa.
Although closely followed by South Africa, which had 40 businesses raising $59,971,000, Nigeria topped the list of African start-ups. Kenya ranked third in terms of the number of start-ups that raised funds.
However, other African countries are emerging as more than viable alternative destinations for funding as investors increasingly look beyond the traditional “big three” start-up ecosystems. This is a trend that has been slowly developing over the last few years. In 2015, South Africa, Nigeria and Kenya accounted for more than 80 percent of total funding raised, but in 2018 that fell to 61.8 percent.
Much of that can be attributed to the rise of Egypt as a destination for funding, with the country’s start-ups raising $58.9 million in 2018, clearly establishing Egypt as a leading start-up hub on the continent. Companies in 16 other African countries secured investment.
In the case of sectors, the fintech space continued to dominate, showing a clear favourite among investors with $132.75 million seed fund, accounting for 39.7 percent of total funds raised.
Speaking on the report, the Co-founder of Disrupt Africa, Gabriella Mulligan, said “it has been an incredible year for tech start-ups in Africa – and it’s a real pleasure to release this report and the impressive figures it contains. The continent’s entrepreneurs have grabbed the attention of investors, accelerators, and media both locally and globally this year with their innovative solutions and business models, and it’s great to be able to report on such strong results across our ecosystem”.