African tech startups have closed yet another month while juggling the strive to fundraise and recover to a tantamount state of what business-as-usual was before the hit. Despite the decline in raises at the start of the crisis, month-on-month record of Digest Africa’s deals of the year so far indicate progression with a steady recovery in investments secured. H1 2020 recorded a total of $370.6M across 149 rounds, which we further break-down in our upcoming brief. All interested in receiving this brief can sign up for our weekly newsletter have it delivered to your email on publishing.
Although some investors are still holding back inlight of the economic risk, others have remained active as there is there is still the unwavering need to disperse and grow their funds while in the prime of their investment life cycle. Disrupt Africa quotes Startup Bootcamp’s chief investment officer Zachariah George “...Therefore the GPs of almost every VC fund in Africa is sitting with piles of cash that they have to deploy lest they face redemption calls from their LPs – which are mostly large development finance institutions (DFIs)” adding that the total funding for African tech startups is still perfectly likely to rise, but that the number of startups receiving funding will very likely decrease should they have not survived the “cash crunch” over the past few months.
July closed off with a total of $51.7M raised across a mixture of 11 deals (43.1% less than the total $90.8M raised in July 2019). $45.1M of this total was venture capital, which is still 33.5% less than the vc raised in July 2019 ($67.8M). However, this is a 41.3% increment compared to $26.48M venture capital raised last month. Here are a few more key takeaways:
- More than half of the deals belonged to Fintechs (6 out of the 11 disclosed deals) amounting to $11.3M.
- AgriTech ($28M), EdTech ($416K), SaaS ($10M), E-Logistics ($1M) and Media & Entertainment ($1M) each recorded one individual raise each. Do note that these are only disclosed deals.
- Out of the 11 startups that received investment, Kenyan Agritech Komaza raised the highest in a $28M Series B bringing their total VC raised so far to $37.9M across 2 rounds.
- In terms of diversity, only one startup from this count (Lupiya) was co-founded by a woman Evelyn Kaingu.
Below is a further breakdown of the deals:
South African fintech ProfitShare closed in debt worth $5.87M back by SA SME Fund to help it scale and provide small and medium enterprises with much needed capital to catalyse growth and provide them support during the coronavirus pandemic. This brings their total funding so far (all in Debt) to $7.6M across 2 rounds after their raise last year from Edge Growth. This month’s raise was three quarter loan and quarter quasi-equity. ProfitShare provides alternative financing to SMEs which are in contact with a reputable company or government department.
Around the same time, Morocco’s OnePay raised $409K (MAD 4M) from Maroc Numeric Fund II. The funds will be fully invested in Morocco and directed towards expanding the startup’s network to a large number of users by investing in technical, marketing and commercial resources. OnePay’s ‘SISWIN’ incorporates in a single platform payment tools and value-added services in electronic transactions.
Lupiya is a branch-less microfinance platform that fosters financial inclusion by easing borrowing and providing tailored loans (personal loans, working capital loans for and specific working capital loans for women) to its customers in Zambia. In a Seed Round, Lupiya made their first raise of $1M backed by SA’s VC fund Enygma Ventures to scale its financial inclusion strategy in Zambia. The timing of the investment is quite ideal given the current economic climate as a result of the COVID-19 pandemic.
Franc Group raised $300K in Seed funding as part of an ongoing round after bootstrapping for all this since they were launched in 2018. The startup has added more investors post-COVID and is trying to raise further funding. The startup has so far recorded 14,000 downloads and a total of $160K has been invested through its platform. Franc Group also has plans to expand beyond South Africa.
Another fintech Eversend raised $313K bringing their equity crowdfunding raised this year to $1.02M, exceeding the initial $613K (EUR550) they intended to raise. This crowdfunding forms part of a wider funding round being completed. This brings Eversend’s total funding raised so far to $1.3M across 8 rounds ($221K of the amount being VC). The platform allows users to make fast secure and affordable money transfers across the globe through USSD codes hereby supporting financial inclusion. These funds will be used for product development, user acquisition and regulatory compliance and also expanding its offering to Nigeria, Francophone Africa and Europe.
Mid of the month, Maroc Numeric Fund II made its second investment in Edtech KoolSkools in a Seed round worth $416K, contributing $310K and the rest ($106K) coming from an undisclosed investor. The funds will be used to acquire tech, marketing and acquire commercial talent for serving a large network of schools and students. The startup was founded early this year and claims to have 30 schools with over 20,00 students and 700 teachers in different cities of Morocco including Casablanca, Rabat, Marrakech, Fez and Agadir, with the intent to reach at least 100,000 students in the next 2-3 years.
Nairobi-based Komaza made its second raise since it was founded in 2006 in a whooping $28M Series B round led by Novastar Ventures LPs AXA Investment Managers (through the AXA Impact Fund: Climate & Biodiversity), and the Dutch development bank FMO, with further participation by Mirova’s Land Degradation Neutrality Fund. This is part of its planned $33M Series B equity financing. This latest funding will help Komaza plant 1 billion trees by 2030 which will benefit over two million farmers in Sub-Saharan Africa. This brings their total venture capital raised so far to $38M across 2 rounds.
Software as a Service Trade Depot made the second highest fundraise of the month in a $10M Pre-Series B backed by their previous investor Partech Partners, International Finance Corporation, Women Entrepreneurs Finance Initiative and China’s MSA Capital bringing the startups total funding so far to $13M across 2 rounds. Trade Depot has built a network of 40,000 small businesses in Nigeria and connected them to global consumer brands Nestle and Unilever. The new funds will help the startup expand into a platform for financial services and lending products for its retailers.
Another South African based startup Sea Monster was backed by investment firm Vumela Fund in a $1M Series A, its first raise so far. The funds will be used to unlock digital solutions that will change the way in which corporations address internal training and communication. Sea Monster’s team of analysts, animators, game designers and developers have developed effective and measurable digital tools for corporations to access large and remote audiences.
Tunisian local investment firm Capsa Capital Partners led a $1M (TND 2.9million) Pre-Series A with other angel investors for in e-logistics startup IntiGo. This brings their total funding so far to $1.3M across 2 rounds. Since it was founded in 2019, IntiGo has expanded from its ride-hailing to grocery and concierge delivery services as well. Co-founder and CEO Bassem Bouguerra said the investment will be used to further expand into existing categories that they’re operating in and potentially explore other areas too including car sharing in an interview with Menabytes.
Lastly but not least, Valr, acclaimed as one of South Africa’s leading cryptocurrency exchanges, raised $3.4M (R57 million) in a Series A led by 100X Ventures, 4Di Capital, Bittrex and FNB CEO Micheal Jordan. The funds will be used to advance the adoption of cryptocurrencies by building new products and services, expanding into new territories and continuing to build its team of professionals, particularly in technology, regulatory and compliance and client service domains. The startup also claims to have over 40,000 customers that it offers the ability to buy and sell more than 50 cryptocurrencies including bitcoin and ether at the lowest fees in the market.
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