Uganda tech startups raise USD 16 Million, as Africa hits a record USD 560 Million

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Partech Ventures has released its funding report for the African tech startup scene for the year 2017 and there are some really exciting figures and trends.

The report, which sums up all the VC funding activities across the continent, indicates that African tech-startups raised in the region of USD 560 Million in funding for the year 2017. This represented a 53% year over year growth or 1.53x compared to the amount raised in the year 2016.

The same report also indicates that Uganda raised USD 16 Million which is over 50x more than the amount reported by the same report last year for the year 2016.

Going by the figures in the report, a lot of wild positive growth can be seen in both the leading and emerging ecosystems on the continent. Though, despite a growth in the funding raised by tech startups in the leading ecosystems of South Africa, Nigeria and Kenya, their total percentage contribution to the continental figure dropped from 81% to 76%.

South Africa, which at 42 had the most number of deals raised the highest total funding with USD 167.9 Million. This was followed by Kenya with 25 deals worth a total of USD 147 Million in funding and Nigeria which had 17 deals that were worth USD 114.6 Million.

Uganda came in at number seven with only 5 deals that were worth only USD 16 Million. This is a huge leap for Uganda seeing that the country was number 12 in the report released last year for the year 2016.

When it comes to the sectors, the report says that “the top three verticals remain Off-Grid Tech, Fintech & E/M/S-Commerce, attracting 61% of the total funding, down from 72% in 2016.”

Though off-grid tech had a 10% decline in year over year funding, it still retained the top spot with $120 Million. This was closely followed by Fintech at USD 119 Million which experienced over 70% year on year growth.

However, it should be noted that there was USD 117 Million that went to off-grid in form of debt that wasn’t included since the report doesn’t track debt, grant or ICO funding.

The report also highlighted a growth in the deal sizes. It pointed out that “Africa’s series A deal size reached USD 4.5 Million in 2017” from USD 3.7 Million in 2016.

Similarly, Seed+ funding round size rose from USD 0.83 Million to 0.91 Million in 2016 and 2017 respectively. Lastly, Series B round size experienced a decline from USD 11.1 Million to USD 10.5 Million in 2016 and 2017 respectively.

Although there are some consistencies reported about funding in the African tech scene in both the Disrupt Africa and Partech Ventures reports, there has been some disparities. Especially in the total funding figures.

For example, both reports indicate a declining combined share of the leading markets as well as the fact that funding increased by over 50%, yet, the actual figures wildly differ.

There is a debate on which figures to quote or go by seeing that both Partech Ventures and Disrupt Africa release funding reports. For example, in January last year, Disrupt Africa reported that African tech startups had raised an estimated USD 185.7 Million. While Partech Ventures reported that they had raised an estimated USD 366 Million in funding.

There is a USD 181 Million disparity in the two figures reported by the two companies. Similarly, this year, Disrupt Africa report that African tech startups raised an estimated $195 Million in funding. While as Partech Ventures has reported USD 560 Million. Again, there’s a USD 371 Million disparity in the two figures reported.

Part of the explanation as to why this is occurring is perhaps the differing methodologies employed in the analysis. Another critical difference stems from how each of them defines an African startup. Partech Ventures treats an African tech startup as “ones having their primary market in Africa in Africa.”

Therefore, their definition focuses on “operations and revenue” and “independent of Headquarters location or country of incorporation”. Furthermore, Partech Ventures doesn’t track deals lower than USD 200,000 as well as those above USD 100 Million know as Megadeals. They also exclude any grants, debts and ICO deals.

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