The Rise of The African Tech Scene
Since our last study in December 2017, the African Tech Scene has been growing continuously. More than a simple rise, the evolution has exceeded all the expectations we had. For the first time, the amount raised by tech startups operating in Africa has surpassed $1bn ($1.16bn according to Partech Africa).
Even though the size of the investments needs to be put into proper perspectives compared to the US ($131bn) or Asia ($93bn), Africa has all the assets to be the next blue-chip investment hub. This asset combination creates a unique social-economic environment supported by:
- One of the youngest and most dynamic populations in the world with 1.22bn people and a median age of 19 years old, yielding huge demographic dividend
- A growing middle class alongside one of the fastest urbanization rates in the world drive a new pool of opportunities within the continent. Consumer spending in Africa is set to rise from $860bn in 2008 to $1.4Tn in 2020, according to McKinsey Global Institute
- More Intra-African co-operations with the increased number of Pan-African M&A deals and the implementation of the African Continental Free Trade Agreement (AfCFTA) which will create one the largest free-trade areas in the world in terms of the member states (52 out of the 55 African Union nations)
- A high Mobile Money adoption rate:
- Strong digital indicators with 147% of Mobile connectivity in Southern Africa even though the continent lags behind in terms of internet penetration
- The growth of structured tech ecosystem which attracts complementary players (VC Funds, Incubators, Accelerators etc.) More details available on our data base: http://bit.ly/2XA1eVu
The emergence of new champions as below proved the potential:
- Jumia with its listing on the New-York Stock Exchange at a valuation above $1bn
- Zipline which has reached a valuation of $1.2bn
Beyond the numbers, we have the founders…
At ODVA, we have decided to emphasize the background of the people behind all those investment amounts. We would like to highlight how inspiring these founders are and to understand their success in a more qualitative way. We focused on the founders of startups having raised more than $100k in funding in 2018 and who are based in Africa or targeting an African country as their primary market.
The first indicator we tracked down is the academic background. We wanted to understand the level and the place of education of those founders. The numbers show a high-level of education with 97% of the entrepreneurs having at least a Bachelor’s degree and 58% a Master’s degree.
When we scrutinized their place of study, we find that most of them have studied either in Europe or in the USA (30% & 35% respectively). Nevertheless, the founders who graduated from an African university account for 1/3 (12% in South Africa, 7% in Kenya and 4% in Ghana). This highlights the rise of home-grown entrepreneurs with an Africa-based education.
Over the last few years, the education system in Africa has significantly improved as evidenced by the rise of local initiatives such as the launch of the first Africa-based Master’s degree in Machine Intelligence from the AIMS in Kigali (Rwanda) in partnership with Google and Facebook.
Another significant indicator is the percentage of women among those founders. Within the cohort, 16% of the founders are female. Comparatively, in France this number has reached 12.5% in 2018. Although this indicator needs to be improved, we can easily highlight disruptive and successful startups with at least one female among the founding team such as: Sendy, BitPesa, AJA.LA, Baobab Circle, Afrimarket, Safi Analytics, Tulaa, Jamii and many more.
In this sense, we certainly value the diversity and inclusion among both the startups in which we invest and our own organization. To have a glimpse of ODV’s mindset, I invite you to read the paper written by Manon Caussade explaining “Why Orange Digital Ventures is #MovingForward”.
To better understand our approach and get additional insights, have a look at our full presentation below:
We strongly believe that only a collective work will make the local data more relevant and available in Africa. Thus, we are very glad to share the access to our DataBase. Feel free to reach out for any feedback at ouis.abdessadok@orange.com.
______________To access the database, click here ____________
The purpose of this Database is to give you an overview of the current Tech Ecosystem in Africa. If we have missed anyone, please reach out to us and we will be more than happy to update our DataBase.
A special thanks to Bilal Djelassi and Sami Machta for their contribution and precious insights.
About Orange Digital Ventures Africa
We stand as an early-stage corporate fund to support unconventional and driven entrepreneurs from Africa whose ambition is to imagine, design and develop tomorrow’s services and technologies. We engage with compelling technology startups, creative spirits and visionary founders to help them achieve breakthrough innovation in the digital industry, accelerate their growth and successfully bring their products and services to the market.
More information on: http://digitalventures.orange.com/
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