Digest Africa H2 2020 Brief

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The second half of 2020 saw more funding raised by African startup companies compared to the first half of 2020 (6.2%). Companies raised $440M across 189 rounds compared to $414M across 172 deals of H1 2020, an increase in funding of $26M. The month that recorded the highest number of deals was September 2020 with 69 deals that had a value of  $161.7M which is a significant uptick from September 2019 that recorded $30M across 36 rounds. The effects of the COVID-19 global pandemic had caused a drop in the funding for startups on the continent in the first half the year, but as business slowly returned, the funding gradually increased. Due to the lockdowns that were instituted to combat the COVID-19 in the second quarter of 2020, there was an expected dip in funding as cautious investors, in the face of economic uncertainty, continued to fund existing portfolio companies and/or sectors that were able to weather the COVID-19 effects. With lockdowns easing and business resuming, there was an attendant increase in funding in H2 which even saw some exits. This added to the continuing news of exits for the African ecosystem that have made headlines over the course of 2020. This has included the $288 million purchase of DPO Group, a payments services provider for African businesses, by Network International and Stripe’s $200M acquisition of Nigeria’s Paystack.

Read Also: Paystack Acquired By Fellow Y-Combinator Alum, Stripe 

Deals: Startups raised across a total of 189 disclosed deals, a 8.3% drop compared to H2 2019 (205 deals). This is a better performance compared to H1 2020, with an increment of 17 disclosed deals and a smaller percentile gap in funding compared to the same periods in 2019. Additionally, H2 2020 recorded 50 more deals in total (both disclosed and undisclosed deals) amounting to 266 compared to H1 2020 with 216 total deals. This could be a result of business slowly going back to normal after the ravages of COVID-19 as opposed to the lower investor participation of H1 where investors were looking to invest in more established companies with more sturdy business practices that could and did weather or benefited from the effects of the pandemic.

Funding: $440M in total disclosed funding was raised, which is an increase of $26M compared to the $414M raised in H1 2020. September 2020 had the highest number of funding deals, valued at $161.7M, 81.4% higher than September of 2019 ($30M). The largest round of the period was raised by clean energy startup Greenlight Planet, which raised $90M in Debt Finance from CDC Group, FMO, Norfund, ResponsAbility, SIMA Funds, Symbiotics Group, Global Partnerships and ARCH Emerging Markets Partners.

Industries: Financial Services attracted the highest number of deal count (60), however, the total funding valuation ($105M) ranked it in second place. The Energy and Environment Resources sector secured the most funding of this period, with $159.5M across 40 deals. This was due, in part, to the $90M raised by Kenyan startup, Greenlight Planet. These two were then followed by the Commercial and Retail and Agriculture Sectors with $55.7M and $48.2M respectively. Next was Emerging Technologies which raised $12.5M. The Travel & Leisure still had the lowest funding, even lower than what was raised in H1 ($65K) with just $30K raised for two startups in Uganda.

Countries: Kenya, Nigeria and South African startups continued to receive the lion’s share of total investment in Africa for another consecutive year, securing in total $351.6 across 110 deals ($211.4M, $84.8M and $55.4M respectively). The top individual startups attributed to these totals by country include Greenlight Planet’s $90M Debt Financing, $35M for Lumos Global and Planet42’s Series B $30M . 

Funding Stage: Majority startups raised early stage funding: Grants (70 deals, $3.57M), Seed (53 deals, $42.6M) and Series A (20 deals, $67.45M). The most funded startups in each of these stages: South Africa’s Lumkani with a 1.16M Grant, Kudabank’s $10M Seed and SunCulture’s $10M Series A. However beyond venture capital, Debt Finance attracted the highest value of funds (Greenlight Planet’s $90M Debt Finance.) 

Investors: Uganda-based, The 97Fund (10 deals, $127.5K) invested in 10 Africa-based startups, dispersing funds to the tune of $127K. This made it the top investor of H2. MasterCard Foundation also participated in 11 rounds making investments worth $440K. Other top investors based on the number of investments made for the second half of the year include: Future Africa (9 deals, Undisclosed), MEST Africa (8 deals, $750K), Nigeria Climate Innovation Centre and All On (8 deals, 80K), African Development Bank AgriPitch Challenge (6 deals, $120K), Anzisha Prize (6 deals, $82.5K) and GoGettaz Agripreneur Prize (6 deals, $110K). 

Exits: A total of 14 Exits were recorded in the period, the two most valuable and disclosed being Network International’s $288M acquisition of DPO Group and Nigerian Paystack’s $200M acquisition by Stripe. Collectively, a total of $496M was made by 4 startups that disclosed their acquisition value.

Fundraising: The only disclosed fund of the period was the $54M African River Fund III managed by impact investor XSML Capital with additional investment from Belgium Investment Company for Developing Countries, Dutch Good Growth Fund, FMO, IFC, Swedfund and SDG Frontier Fund.

These are the top 20 deals of H2 2020.

Top 20 Deals Ugandan Startups
STARTUPAmount RaisedFunding RoundInvestorsCountrySector
2Greenlight Planet$90,000,000Debt FinancingCDC Group | FMO | Norfund | ResponsAbility | SIMA Funds | Symbiotics Group | Global Partnerships | ARCH Emerging Markets Partners KenyaEnergy & Environment Resources
3Lumos Global$35,000,000UndisclosedUnited States International Development Finance Corporation NigeriaEnergy & Environment Resources
4Twiga Foods$30,000,000Debt FinancingInternational Finance Corporation KenyaE-Commerce & Retail
5Chipper Cash$30,000,000Series BRibbit Capital | Bezos Expeditions GhanaFinancial Services
6Komaza$28,000,000Series BNovastar Ventures | AXA Investment Managers | FMO | Land Degradation Neutrality Fund KenyaAgriculture
7SunCulture$14,000,000Series AEnergy Access Ventures | Électricité de France | Dream Project Incubators | Acumen Capital Partners KenyaAgriculture
8Angaza$13,500,000Series BKawisafi Ventures | Total Carbon Neutrality Ventures | Ajax Strategies | Emerson Collective | Rethink Impact | Salesforce Ventures KenyaEnergy & Environment Resources
9Trade Depot$10,000,000Pre-Series BPartech Partners | International Finance Corporation | Women Entrepreneurs Finance Initiative | MSA Capital NigeriaE-Commerce & Retail
10Planet42$10,000,000Debt FinancingLendable South AfricaFinancial Services
11Solarise Africa$10,000,000Series BProparco | Energy Access Ventures | ElectriFI KenyaFinancial Services
12Aerobotics$8,500,000Series BNaspers | FMO | Cathay AfricInvest Innovation South AfricaEmerging Technologies
13Oolu$8,500,000Series BRP Global | Persistent Energy Capital | All On Energy | Gaia Impact Fund | DPI Energy Ventures SenegalEnergy & Environment Resources
14Valenture Institute$7,000,000Series AGSV Ventures South AfricaEducation
15Tugende$6,300,000Series AMobility 54 | Global Partnerships Social Venture Fund UgandaFinancial Services
16Dataprophet$6,000,000Series AKnife Capital | Industrial Development Corporation of South Africa | Norican Group South AfricaInformation Technology
17ProfitShare$5,870,000Debt FinancingSA SME Fund South AfricaFinancial Services
18Copia Global$5,000,000Series CUnited States International Development Finance Corporation KenyaE-Commerce & Retail
19IlaraHealth$3,750,000Series ATLcom Capital | DOB Equity | Chandaria Capital | Global Ventures KenyaHealthcare & Pharma
20Paymob$3,500,000Series AGlobal Ventures | FMO | A15 EgyptFinancial Services
21Valr$3,400,000Series A100x Ventures | 4Di Capital | Bittrex | Michael Jordan South AfricaFinancial Services

To share with us your company fund raise in preparation of the Digest Africa Index Report 2020 to be released early this month, we urge you to claim your company profile on our website and please contact us at  info@digestafrica.com.

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