February Funding Report: Nigerian Startups and Fintechs Resume Funding Dominance

African startups raised $560m in the month of February across 48 deals, a 36% month-over-month increase and a whopping 294% year-over-year increase. In the first two months of the year, startups have raised $969m. At this stage last year, only $295m (which is just over the $250m raised by Flutterwave in February) had been raised. 

Nigeria took the lion’s share of investment, attracting $325m (58%). South Africa came in second with $116m while Kenya and Egypt managed $54m and $51m respectively. Together, the big 4 raised $546m which was 98% of all funding in February. 

This is a return to the dominance of the big 4 after a slow start in January. Tunisia ($100m) emerged as the most popular funding destination in the first month of the year thanks to Instadeep’s $100m funding round. Kenya ($96m), South Africa ($54m) and Nigeria ($41m) followed in quick succession, but Egypt ($32m) was pushed into 6th place by Ghana ($33m). All together, the big 4 raised $223m which accounted for just 55% of all funding in January.

Financial services also reclaimed its spot as the most funded sector attracting $373m (67%) across 17 deals. Ecommerce and Retail followed, having attracted $98m in 7 deals with Healthcare and Pharma ($43m) a distant third. January's most funded sector, Information and Technology could only attract $18m across 5 deals. 

Flutterwave’s $250m Series D was enough to make that round the most funded. Series A ($97m), Series C ($91m) and Seed round ($55m) were the only other rounds that raised at least $50m. But in terms of deals, seed rounds (20) were the most popular. Pre-seed came second with 12 deals. 

Startups with at least one female founder raised $37m in February across 8 deals which was just 7% of all funding raised. This is a reversal of the gains made in January where startups with at least one female founder raised $201m which accounted for 49% of all funding. This is the closest we came to gender balance. 

The five biggest funding rounds of February 2022.

1. Flutterwave ($250m. Series D) 

Flutterwave is a Nigerian cross-border payments startup that enables businesses to receive money from customers anywhere in the world using a single API. It raised a $150m Series D at a $3bn valuation, tripling its valuation in just 12 months. This makes it Africa’s most valuable startup ahead of fellow fintechs OPay and Chippercash.

Flutterwave currently has 900,000 businesses that use its platform and can transact in over 150 currencies. Investors in this funding round included B Capital Group, Alta Park Capital, Whale Rock Capital, Lux Capital, Avenir Growth, Tiger Global Management, Glynn Capital, Green Visor and Salesforce Ventures. Flutterwave will use these funds to expand to new markets in the Middle East and Latin America as well as build complementary products. 

2. Clickatell ($91m, Series C)

Founded in South Africa in 2000, Clickatell is a pioneer in the $80bn mobile communications and chat commerce space. It helps businesses to communicate with customers through mobile messaging platforms. Customers can find goods or services, make purchases, track orders and have their complaints fixed through SMS, USSD or Whatsapp.

Arrowroot Capital, Kennedy Lewis Investment Management and Endeavor Global invested in its $91m Series C. This brought the total amount it has raised to $109m. Clickatell will use this Series C to expand its footprint and increase its services and marketing efforts in its countries of operations, South Africa and Nigeria. 

3.MarketForce ($40m, Series A)

Kenyan startup MarketForce raised $40m for its Series A, a funding round that was led by V8 Capital Partners. Other investors that came on board included Ten13 VC, Uncovered Fund, Reflect Ventures, Greenhouse Capital and Remapped Ventures

MarketForce is a retail B2B and end to end distribution platform. Outside of Kenya, it has operations in Uganda, Tanzania, Rwanda and Nigeria. It will use these funds to expand to more markets in East and West Africa as well as build a buy now pay later (BNPL) to help merchants to secure fast-moving consumer goods (FMCG) on credit. 

4. Stitch ($21m, Series A)

Stitch is a South African fintech that enables businesses to build and scale financial products. It raised a $21m Series A led by Spruce House Investment Management. Other investors included PayPal Ventures, TrueLayer, Firstminute Capital, Raba Capital, CRE Venture Capital and Village Global. Stitch has now raised $27m to date. 

It will use the money to expand to its team in Cape Town, Johannesburg and Lagos. It will also launch new products and enter new markets in Africa. 

5. Thndr

Egyptian startup, Thndr was founded in 2020 by Ahmed Hammouda and Seif Amr. It is a digital investment platform on which users can invest in stocks, bonds and funds in the Middle East. It claims that 87% of its users are first-time investors while 40% are based in rural areas.

On February 9th 2022, it announced a $20m Series A attracting investors like Tiger Global Management, BECO Capital, Prosus Ventures, Base Capital, Endure Capital and 4Dx Ventures among others. 

Featured Image Credit; Flutterwave

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