It is exactly 111 days since the first lockdown on the continent was enforced (21/03/2020 by Rwanda) and there is still no record of a 100% lift in any of the affected countries. The reported spikes and declines in cases have paused an even bigger question of how long startups can creatively continue to weather the storm of the coronavirus impact. Emergence of various relief funds has soothed the austerity but these are exhausted and the struggle to raise again begins. While at it, the ecosystem closed off another month and quarter under the lockdown.
June recorded 28 raises, 20 of which were disclosed vc deals amounting to $26.48M in total. This is 37% less than the $42M raised in June 2019 and 65.6% less than $76.7M raised in May 2020. Majority startups raised Seed ($3.826M by 9 startups) followed by Grant and Series A ($450K by 4 startups and $20.8M by 3 startups.) The Financial Services sector received the greater of the funds ($24.66M by 11 startups followed by a single raise from Edtech valued at $1.2M. Startups in Information Technology, E-Commerce, AgriTech, Health Care and Transport & Logistics. This brings the total funding of Q2 2020 to $90M, a 65% and 28.1% drop compared to Q1 2020 ($256.6M) and Q2 2019 ($125.1M).
Here is a further breakdown of $100K+ deals of the month:
Ethiopia’s Maisha Technologies raised a $150K Grant from incubator Villgro Kenya early in the month. The startup designs drones that transport blood from government owned blood banks to where they are needed within a 200km range that initially earned them the Bill and Melinda Gates Foundation grant in 2017 under its Grand Challenges Initiative. This new grant will be used for the development of their Nisre-Tena design, the drone that earlier this year was selected for a 6-month aerospace accelerator, Africa For Future run by Airbus and the German development body GIZ.
Jamborow, a B2B fintech platform that offers financial services to the unbanked in Nigeria raised a $400K Seed to boost its launch into the Nigerian market. The round was backed by Founded in 2018, Jamborow has created a platform to solve several banking problems including lack of automation for micro-lending and saving schemes, no-insight and data-driven science around lending to attract big money for micro-lenders, lack of an operational platform for peer-to-lenders among others. The target market includes vendors, small scale entrepreneurs and the rural community.
Another fintech company Sticitt made its second raise of the year in a $176K Seed round backed by Crucis Venture Capital, bringing its total VC to $249K across 2 rounds. The deal involved 6 tranches with the first made on 1st June. Sticitt previously received a $75K Angel investment from a family member and friend who is also the company’s asset manager making this their first major external investment. As a cashless option for customers, the platform allows users make payments through their Sticitt wallets, thereby eliminating risks associated with handling of cash, the hustle of payment reconciliation work and card and cash deposits as well as handling fees. With the main focus being the schools market, this funding will cover operational expenses of its current market releases including the Sticit Terminal application.
Founded by 22 year-old Brandon Bate and Zander Matthee, Merge Technologies is a unique digital meeting place that connects entrepreneurs and investors. Backed by Platform Capital, the company raised Seed capital worth $100K which will be released in several tranches. According to founder Zander, since the startup’s launch, just over 700 entrepreneurs, 160 ventures and 118 investors have signed up for the currently free service and just under 300 connections have been made although not all have resulted in investments being made.
The Sun Exchange raised $3M and closed its Series A valued at $4M to expand into new markets in Sub-Saharan Africa. The round was backed by Mauritius based private investment fund Africa Renewable Power Fund (ARPF) advised by ARCH Emerging Markets Partners. The platform allows individuals to make crypto-driven investments in solar infrastructure that powers schools, businesses and other organizations. This brings the company’s total VC raised since inception to $7M across 5 rounds.
Mid month, Cairo-based EdTech Zedny launched with a Pre-Seed investment of $1.2M with over 200 online courses and 400 animated video summaries of global business bestsellers and 5000+ hours of learning. The platform available across the Middle-East allows users access year-long online learning and track and evaluate external employee performance.
Another Egyptian-based startup Sakneen raised $150K as part of Y Combinator’s Winter 2020 batch that graduated early this year. Saskeen will later this year launch their ecommerce platform for real estate to make it easier for developers, agents and individuals to buy and sell properties. The company is addressing 3 major problems: disorganized public information, mismatched incentives in the sales process and lack of transparency around financials.
Planet42 is another fintech addressing access to mobility for the underbanked. South African individuals can rent-to-buy pre-owned vehicles if they pass the application process by way of an automated scoring algorithm. The startup has delivered nearly 2000 vehicles to clients with a record eight-fold growth made in 2019. Change Ventures, Martin Villig, Ragnar Sass, Marko Virkebau and Kristjan Vilosius backed the company in a $2.4M Seed round to keep expanding with a target of 100,000 by 2024 in South Africa alone.
Fintech Chipper Cash raised a hefty $13.8M Series A, the highest deal of the month. This brings their total funding to $22.2M across 3 rounds. This round was co-led by Deciens Capital and Raptor Group with continued participation from 500 Startups and Liquid 2 Ventures. The company has plans to hire 30 new staff across its operations in San Francisco, Lagos, London, Nairobi and New York. Since its launch in 2017, the company has 1.5 million users and is doing over $100M a month in volume according to co-founder Ham Serunjogi.
MoneyFellows closed a $4M Series A led by Paris-based Partech Partners and Egypt’s Sawari Ventures. This brings their total VC raised since 2014 to $5.7M across 6 rounds. The platform has digitized the process of ROSCAs and currently has over 150,000 active users verified by a user assessment algorithm. The fund will help the company expand into other countries on the continent.
Towards the close of the month, Catalyst Fund announced its selection for their latest cohort. The three startups are Nigeria’s WellaHealth and Flex Finance and South Africa’s Paymenow that were each awarded a $100K Grant (£80,000) and venture building support for 6 months.
Lastly another South African fintech SmartWage raised $347K (R6m) in Seed backed by investor Chris Lister-James in form of a Simple Agreement for Future Equity (SAFE) to help the company grow its solution. SmartWage is a payday solution that allows employees access a percentage advance of their earned wages at no cost. The investment will be used to the development and deployment of its technology offering including a unique financial literacy education solution.
Digest Africa urges all to wash your hands with soap, sanitize them frequently with an alcohol-based sanitizer, wear protective masks and gloves while going out into the public if need be but most importantly staying indoors to prevent the spread of the deadly coronavirus (COVID-19).
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