Tech In Africa – reasons I'm excited

I’m sure you’ve seen the multitude of blogs about African tech but it’s hard to find one that connects the dots about what’s going on in Africa. From South Africa to Ghana, Nigeria to Kenya, there is a lot happening in every corner and everyone seems to be riding the wave. I wanted to take a step back and focus on why people should be excited about tech and startups in Africa. So here it is!

Capital Capital Capital!

2021 saw a record year of capital flowing to African startups. Despite being a year dominated by covid recovery, $5.2bn was invested across 640 startups. Nigeria by far lead the way with $1.8bn of investment more than double South Africa which had $832m of funding, with Egypt third most capitalised with $652m being invested into its startups. Exploring the data a little further we can see that of the ~681 funding rounds 507 went to seed stage companies. That represents almost three quarters of the funding rounds. We are already seeing signs that 2022 will be another record year. In January alone roughly 60 deals were done totalling ~$430M in disclosed funding.

Global Attention

World leading VC funds are now playing an active role in investing in African founders. The big VC players are now firmly fixed on Africa as a breeding ground for the next wave of unicorns. Tiger recently invested in Ghanian fintech float, and Nigerian investment platform Bamboo, this was off the back of their 2021 investments in Flutterwave, Mono and FairMoney. Other major players such as Softbank which invested in Opay and Andela and az16 has invested in Zipline and Goldfinch are also increasing their stake on the continent.

Young population

Africa as a continent has the youngest population. Around 40 percent of the population is aged 15 years and younger. Although the median age on the continent has been increasing annually, it remains low at around 20 years. By 2035, the number of young people reaching working age in Africa will exceed that of the rest of the world combined, and by 2100, over one in three people in the world will be from the African continent. This presents a unique challenge to innovate and provide solutions to support the growing numbers of people. I think the greatest areas of innovation as a result of the rise will be in Healthcare, Financial Services and E-commerce.

Talent

The talent in Africa is truly world class. I have the privilege of speaking on a weekly basis to founders solving some of Africas toughest challenges. In June 2021 I had the opportunity to judge a hackathon hosted by Startup Discovery School and HC Talent Group at Kumasi Hive, an entrepreneurial hub based in Ghana’s second largest city Kumasi. The enthusiasm and innovation to really approach long standing problems they faced was extremely refreshing. As the ecosystem grows, no doubt there will be pressures on the talent pipeline as startups compete for the cream of the crop, and it may just be the hugest hurdle to come.

One thing I know for sure about African tech is this: it’s only going to get better. In fact.What we’re seeing right now—the proliferation of new startups and investors, along with increased interest from abroad—is a testament to this reality. I expect great things from the African tech ecosystem in 2022 and beyond, and the future looks bright.