Q1 2021; a 55.7% increase in Total Funding compared to Q1 2020

    Deals
    Financial Services
    Fintech
    Funding
    Startups
    The Funding Brief

The first quarter of 2021 saw $553M in total disclosed funding across 137 funding rounds. This is a significant increase from the $245M received in Q1 of 2020 across 105 funding deals representing an increase in activity in the African early stage ecosystem.

Financial services remains the most funded sector in Q1 this year as in 2020. Within the sector, Flutterwave raised the most in funding, in a $170M Series C funding round. With the prolonged coronavirus pandemic, most of the monetary transactions have been done from the comfort of home. Since using hard money and leaving home to access banking services was considered a risk, companies picked up the trend and availed better services through their apps. There has been increased demand for mobile financial services and this has contributed greatly to the increased funding. 

Female-led startups raised $108M in this quarter, a 391% increase from the $22M raised in the same quarter last year.  

The most active investors in Q1 2021 include SAB Foundation, All On, JUA Kickstarter Fund, AlphaCode and United States African Development Foundation.

Key takeaways 

  1. Q1's most funded sector by value:  Financial Services ($362M), Emerging Technologies ($94M) and Energy & Environment Resources ($48M)
  2. Most funded Country: Nigeria ($217M), South Africa ($145M), Kenya ($101M)  
  3. The most funded stage by value: Series C ($170M), Undisclosed, mostly Pre-Seed/Seed ($145M), Series B ($124M)
  4. Funds raised by regions: West Africa $221M, East and Central Africa $152M, Southern Africa $146M and Northern Africa $31M
  5. Amount raised by startups with female leads: $106M which is 19.31% of the total funding in the quarter.

Here is a further breakdown of the startups the top 10 deals in Q1

  • Flutterwave led the funding rounds this quarter with its jaw-dropping $170M Series C funding. Its investors include Avenir Growth Capital, Tiger Global Management, DST Global, Green Visor Capital, Salesforce Ventures, Greycroft Capitals, Insight Ventures, Early Capital Berrywood, Paypal, Worldpay FIS 9yards Capital. With this deal, the company is now valued at over $1billion. The company plans to use the funding to quicken customer acquisition in its present markets as it also continues to expand.
  • Tymebank, an investment company in South Africa raised $109M in February. The amount was contributed to by Apis Partners and JG Summit Holdings. The company believes that the investment will grow it into a top-tier retail bank in South Africa as it expands its range of banking products and grows its lending portfolio. With an average of 110,000 new customers per month, Tymebank aims at having over 4million customers within the next year.
  • Kenya’s Gro Intelligence was able to raise $85M in Series B funding in January. The investors that contributed to that amount are Intel Capital, Africa Internet Ventures, DCVC, GGV Capital and Eric Zinterhofer. The company plans on using the funding to accelerate the growth and adoption of the Gro Intelligence platform. The AI-powered decision-making tool is set to offer solutions and analytics on food, agriculture and climate economies. The funding will also enhance the machine-learning capabilities and deliver localised insights.
  • Daystar Power Africa received $38M in Series B funding from Proparco, DFI and IFU in January of this year. The Energy and Environment Resources Company plans on using this funding to grow operations in the key markets of Nigeria and Ghana. It will also extend its presence in other regional countries. Daystar Power, since its inception in 2017, provides a clean and reliable power option in Solar Power while reducing clients’ costs. 
  • Kudabank successfully raised $25M in Series A funding from Valar Ventures and Target Global. Target Global had also contributed to Kubabank’s $10M seed raise in November 2020. Founded in 2017, Kudabank is a full-service digital bank dedicated to helping people live healthier financial lives. At the end of February, Kudabank reported that it had handled $2.2billion in transactions.  This is a marked increase from the $500M in transactions per month. With the funding, the Company intends to expand into other countries on the continent.
  • South Africa’s Adumo, the country’s largest independent payment processor received $15M from International Finance Corporation in March. Founded in 2019 with headquarters in Bryanston, the company processes more than $5 billion in transactions annually with over 30,000 active users. The plan for the funds is to help roll out new payment innovations and purpose-based lending services to support consumers and retailers.
  • Mubawab a Morrocan real state agency that works in the Middle East and North Africa received $10M in March from Emerging Markets Property Group. This is on top of the $7M they received from the group in 2020. With the funding, Mubawab hopes to hire a large round of new employees and develop an in-house research and development department. This move will ensure an increase in efficiency to respond to the growing demand. 
  • Si-Ware Systems, an independent fabless semiconductor company in Egypt made off with $9M from Egypt Ventures and Sawari Ventures. The company produced the NeoSpectra microdevice which is revolutionary in the field of material identification and analysis. Si-Ware is planning on restructuring to form two companies. NeoSpectra will continue manufacturing the microchips and Pearl will develop and manufacture high-speed timing chips. The funding received will go into both companies to finance further product development.
  • HearX Group raised $8.3M  in February 2021 in Series A funding from Bose Ventures, HAVAIC, Futuregrowth Asset Management and Sphere Holdings. The South African Health startup ensures that consumers can conveniently purchase quality hearing aids online and programme them from the comfort of their homes. The funding received will help the company extend its reach. 
  • Nigeria’s application-based education platform ULesson received $7.5M in Series A funding. The amount was contributed to by Founder Collective, LocalGlobe, Owl Ventures and TLcom Capital and makes up for more than 88% of the funding received by the Education sector in this quarter. Launched in the middle of the global pandemic, uLesson is vital in driving the new normal in the education field. The company is looking to expand into East Africa after dominating most West African countries. It will also improve its services by setting up a pan-African primary school library. It will further introduce one-on-one tutoring and create a platform to allow learners to challenge each other on quizzes.To share with us your company fund raise, we urge you to claim your company profile on our website and please contact us at  info@digestafrica.com.To request further custom research and analysis, please contact us at  info@digestafrica.com.Are you an African entrepreneur seeking help with fundraising, allow Digest Africa to recommend and match you to a curated list of investors that meet your fundraising stage and requirements by completing our Raise Survey.

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