Monthly Round Up: Q3 Outperforms Q2 by 80%

    The Funding Brief

We have come to yet another successful close of the month and Q3 of 2020. In Q3 2020, funding has taken an upturn with startups raising $241M across 104 rounds representing an 80% increase in funding amount compared to Q2. 66.5% of the funding was raised in September ($160.3M, 59 rounds) with the largest deal from Greenlight Planet, a $90M debt financing round from CDC Group, FMO, Norfund, ResponsAbility, SIMA Funds, Symbiotics Group, Global Partnerships and ARCH Emerging Markets Partners. This is a 452.7% and 434.3% increase compared to August 2020 ($29M across 39 rounds) and September 2019 ($30M across 36 rounds) respectively. However, only 22% was disclosed venture capital skewed by the $90M Debt from Greenlight Planet and a $35M undisclosed from Lumos Global that made up the majority of the month’s total.

By stage, most activity is in the Grants ($526K, 27 rounds)  and Seed ($3.7M, 21 rounds). This is as a result of high activity from several incubators and accelerators as they onboarded several startups into their training programs (named in deals below). By value of the venture rounds, the highest was recorded by Series A ($11.3M across 3 rounds) and individual rounds from Series B ($10M, Solarise Africa) and Series C ($5M, Copia Global). The top three (3) Sectors that attracted most venture funding: Financial Services ($11M, 9 rounds) emerged as highest yet  again followed by Ecommerce & Retail ($8.4M, 11 rounds) and Education ($7M, 1 round). 

Here is breakdown of the top deals of the month:

The Africa Prize for Engineering Innovation powered by Royal Academy of Engineering announced Bace Group, a startup that developed the BACE API software that uses facial recognition and artificial intelligence to verify identities remotely, as winner out of 4 finalists of the 2020 virtual awards ceremony. Bace is the first ever woman-led and Ghana-based startup to win the Africa prize and was awarded a $33K (£25K) Grant. Bace Group has raised $133K in venture funding since it was founded in 2018 by Charlette N’Guessan

The other three (3) finalists were: Nigeria’s Farmz2U, a digital platform that helps farmers and families prevent food waste and enhance nutrition; Uganda’s PapsAI, a series of software and hardware that make cervical cancer screening, diagnosis and patient management faster and more efficient; and Remote, a system that manages off-grid power grids by monitoring the condition of solar arrays. The companies were all awarded $13K (£10K) Grants for their promising engineering innovations that address critical issues in their communities. This brings Farmz2U’s total funding to $32.5K across three (3) rounds.

Lumos Global secured $35M from United States International Development Finance Corporation to expand the distribution of solar home systems in Nigeria. This is the second raise of year, following the undisclosed funding received in July from FMO. This brings the company's total funding so far to $122M across 2 rounds. Lumos wishes to reduce the number of Nigerians under the grid by 1 million people through the supply of 160,000 solar kits to homes and SMEs in rural areas.

South African accelerator Startup Circles in partnership with Enygma Ventures made a $75K ( ZAR1.25M) offer of funding to three (3) african startups at the Startup Circles Demo Day. Startup Circles and Enygma Ventures partnered in a $6.8M (ZAR100 million) fund which was launched late last year and has a focus on investing in women entrepreneurs in the SADC region. Financial Service Mangwee and E-Commerce platforms Candor Life and Artisans In Africa emerged winners and received the offer of investment out of 13 contenders with a $25K cut each for 10% stake. This will mark the first disclosed fundraise (Seed) for each of these startups.

Proparco, Energy Access Ventures (EAV) and ElectriFI backed another financial services company in the renewable energy space in Solarise Africa, a $10M Series B funding round, what we deem to be the highest venture round of the month and the first disclosed funding received by the company. Solarise Africa  is a Kenya-based pan-African clean energy leasing company that provides innovative financing solutions to industrial and commercial companies. The newly acquired funds will be utilised in helping the company advance its clean energy offering in Kenya, South Africa and Rwanda and further its assistance to SMEs maintaining its operations through its solution.

Yellow Africa raised $3.3M in a Series A round from investors: Platform Investment Partners, Ruby Rock Investment and LBO to quickly scale up the startup. Yellow Africa was founded in 2017 by Michael Heyink and Maya Stewart and has a digital platform ‘Ofeefee’ that turns every operational process into information, and empowers a distributed network of agents to sell their pay-as-you-go solar-power devices to African households. The startup claims to have enabled 30, 000 low income and rural households access to electricity via solar home systems on a financed basis.

Egypt’s Rology raised $860K in a Pre-Series A round led by HIMangel joined by Dubai Angel InvestorsAsia Africa Investment & Consulting and Athaal Group. Rology is a cloud-based platform that connects hospitals and other healthcare providers with remote and readily available radiologists. The funds will be used to expand operations in Saudi Arabia and Kenya. The platform has a free setup offer for hospitals and radiologists with the ability to remotely work anywhere in the world as long as they have access to a computer and internet connection.

Two (2) E-Commerce platforms Copia Global and Kasha received $5M Series C and $1M Series A respectively from United States International Development Finance Corporation (formerly OPIC) as part of its latest quarterly $3.6 billion investment spend. Kenya’s Copia Global provides a “state-of-the-art” shopping experience that brings goods and services to your doorstep all with advanced levels of customer service and has since received venture funding worth $37M across four (4) rounds. Kasha on the other hand is based in Rwanda and is improving women’s access to health, hygiene and self care products. This marks Kasha’s second fundraise of the year, the company has received $2.15M across 3 rounds in VC since inception. 

Ed-tech Valenture Institute received a $7M Series A investment from global venture fund GSV Ventures geared towards further global expansion, enhancing the learning experience, and building out additional offerings such as new subjects and exclusive boot camps and for resources dedicated to the roll-out of the school’s hybrid, tech-enabled, boutique campuses. 

Cairo-based Elves also raised a lump sum of $2M in a Pre-Series A round with investments from Sawari Ventures and other existing investors. Part of the investment was received earlier this year in February and later July, bringing their total raise so far to $4M across two (2) rounds. Elves is a chat-based concierge service that allows consumers to do anything from booking flights to delivering groceries and globally accessible online. As a result of COVID-19, the startup had to switch focus rapidly on what the users would need which was grocery deliveries which has scaled its user base.

Another clean energy company Greenlight Planet raised $90M Debt Finance to expand its service in Sub-Saharan Africa and South Asia. The round was backed by different investors including CDC Group, FMO, NorfundResponsAbility, SIMA Funds, Symbiotics Group among others. According to co-founder and CEO Patrick Walsh, 76% of the $90M ($69M) has already been dispersed to the company while the remaining 24% ($21M) will be received in due time as the company delivers more of its pay-as-you-go electricity kits.He added that this brings the company’s total funds raised to $160M since it started in 2008. The most recent disclosed raise was $2M in Equity Crowdfunding that was received in 2019. 

OkHi and ThankUCash each received $500K from Hong-Kong based accelerator Betatron after getting accepted into its Cohort 6 Accelerator Program. The companies are the only two that are based in Africa out of the nine (9) entrants. The cash award is accompanied by mentorship and guidance for the four months duration of the program. OkHi later made its second raise later in the month in a $1.78M Pre-Series A round from London-based Angel Investment Network to grow its team and operations in other African countries. The Kenya-based company provides a digital addressing network that links you to an accurate GPS point through the user’s mobile device. ThankUCash is a Nigeria-based financial service that helps customers access deals and businesses better understand consumer spending patterns. The company has so far raised $860K across 4 rounds.

The Meltwater Entrepreneurial School of Technology (MEST) made a $700K investment in 7 tech startups that have graduated its 12th annual entrepreneurship training program. After pitching on the virtual demo day, the 7 startups were each awarded $100K and joined more than 40 other companies under MEST Africa’s portfolio. The companies include: Ghana - Ecommerce platforms Heny, Shopa and Tendo, software solution KPI Lens and e-logistics platform Boxconn, Nigeria’s e-wallet service Joovlin and Kenya’s digital data collection platform Eleka.  

Other Notable Investments of the month:

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