Kenya Overtakes Nigeria as Africa’s Favorite Investment Destination

2020 was a good year for VC investment in Africa despite the economic uncertainties caused by the pandemic. Like 2019, several African countries were hot spots for VC investments during the year.

Analysis by Startuplist has revealed that the top 5 destinations for investors in Africa remain unchanged from the previous year (2019). However, the standings of each country have shifted during the course of last year. Below are the top 5 investment destinations in Africa in 2020.

Startuplist report is an analysis of over 350 publicly disclosed funding deals in the African Startup Ecosystem.

Kenya Overtakes Nigeria as Africa's Favorite Investment Destination in 2020
Top African Countries for VC investments (2020) Credit: Startuplist

Kenya overtakes Nigeria as No 1 in Africa

Every year, top tech hubs across Africa compete for who will attract the most investments. In 2019, Nigeria was the most attractive investment destination on the continent, attracting over $663m, the highest amount received by any African country, according to Weetracker.

Last year, however, Kenya took over the number 1 spot after raising over $266 million, 25% of total fundings on the continent. Nigeria follows closely with a contribution of 23% ($237m) during the course of the year.

Kenya Overtakes Nigeria as Africa's Favorite Investment Destination in 2020
Credit: Startuplist

The report shows that investment in Renewable Energy startup, Greenlight Planet’s ($90m) and Agritech startup, Twiga Foods’ ($29m) were the biggest startup fundings in Kenya.

Greenlight Planet’s $90m Private Equity round is the largest investment in Africa in 2020

However, in Nigeria, Fintech startups attracted the highest funds. Flutterwave and InfraCredit raised $35 million and $27 million respectively. Other sectors were not left out as a renewable energy startup, Lumos raised $35 million while Healthtech startup, 54Gene raised $15 million.

Kenya Overtakes Nigeria as Africa's Favorite Investment Destination in 2020
Credit: Startuplist

South Africa climbs back to 3rd, while Egypt keeps growing

Investment in South Africa’s tech startup space recovered in 2020 after a slowed growth in 2019. According to the report, the country contributed about 19% ($198m+) of the total investment to become the third leading destination for VC investments in Africa 2020.

This a big improvement from the 4th place it took in 2019 after raising just $67 million, according to WeeTracker. Startuplist revealed that Jumo ($55 million) raised the highest funding in the country.

Kenya Overtakes Nigeria as Africa's Favorite Investment Destination in 2020
Credit: Startuplist

Egypt which held the 3rd spot last year fell to number 4 but remains the top investment destination in North Africa. It attracted over $125 million, 12% of the total funding raised by African startups during the year and a significant increase from the $79 million raised in 2019.

The highest funding deals in the country were Vezeeta’s $40m Series D round and Swvl’s $25m Series B round.

Kenya Overtakes Nigeria as Africa's Favorite Investment Destination in 2020
Credit: Startuplist

Ghana retains the No 5 spot

Ghana’s ranking as the 5th most attractive Startup Ecosystem remains unchanged from 2019. However, the amount contributed by the country has significantly increased.

Startups in the country attracted over $90m in 2020. This is double the $45 million raised during the previous year and a 9% share of overall funding
in Africa 2020.

Kenya Overtakes Nigeria as Africa's Favorite Investment Destination in 2020
Credit: Startuplist

The largest funding in the country was raised by Chipper Cash which closed multiple rounds within the year including a $30m investment round which included Jeff Bezos.

In Summary

The analysis by Startuplist Africa shows strong investor confidence in the continent despite the many uncertainties surrounding the pandemic. It also shows that while investment in fintech is still huge, there was significant diversification into sectors like renewable energy and healthcare.


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