South Africa, Nigeria and Kenya remain the top three most attractive African destinations for investors in tech start-ups, followed by Egypt and Ghana.
This is according to the Disrupt Africa’s second Tech Start-ups Funding Report for 2016, which notes that African tech start-ups raised almost $130-million in funding in 2016.
The report shows that fintech became the most popular sector for tech investment in 2016, with start-ups in that space raising 24% of the overall total, the report says. Agri-tech ventures are reported as the fastest growing sector.
“Funders and corporates are acknowledging the huge growth potential these ventures hold in bringing critical services to previously unserved or underserved Africans,” says Deon Lewis, co-founder and CEO of Futureneers, a South African based start-up accelerator and venture capital company. “There has been great investment in telecommunication infrastructure on the continent which is fuelling the development of technology that meets important needs. This is the gap that many innovative and resourceful entrepreneurs are filling.”
Futureneers agrees with the findings of the report, but Lewis says the education space should not be underestimated. “In our view ed-tech will become the next fintech in terms of the most invested sector,” says Lewis. “On a continent where 30-million children miss out on primary school education yet there is 73% mobile phone penetration, there is little question that the fusing of technology with education in Africa has the potential to expand the educational horizons of millions. The question is just how to implement that in challenging and varied local contexts.”
Lewis adds that Bill Gates, through the Bill and Melinda Gates Foundation, has already poured billions of dollars, into what he calls the “future of learning”, while Mark Zuckerberg recently announced a new $50-million edtech investment. Both have a big push towards personalised learning for African students. Other investors are sure to follow, Lewis believes.
“The growing interest and activity in African venture capital signifies an evolving and expanding opportunity for investors and entrepreneurs to make good on the opportunities in this space as well as provide much needed jobs and economic development to local economies.”