Presenting the 2020 Partech Africa Report: The African Tech ecosystem is still accelerating with 359 equity rounds (+44% YoY) to a total funding of US$ 1.43B (-29% YoY)
Today, Partech Africa publishes its annual report on VC Funding for African Startups. It appears that, in the middle of the global pandemic, the African tech ecosystem is still growing fast, with more deals closed, and is getting a boost from the accelerated digitalization of foundational economic sectors.
More equity rounds in a challenging year
In 2020, more startups have closed deals than in any previous year: 359 deals were closed by 347 startups, compared with 250 rounds in 2019, i.e., a +44% growth YoY. Another very positive signal is the number of seed deals which massively accelerated, reaching 228 deals (+80% YoY). Venture stages (Series A & B) are continuing to grow (+11% deals YoY) despite a general erosion of round sizes. Growth stage sees a low deal count and a marked drop in ticket size (-60% YoY).
The effects of the global crisis
Despite the strong growth in activity, the total amount raised by African startups decreased for the first time after nearly a decade of growth: the equity funding raised by African startups in 2020 totaled US$ 1.429 Billion, representing a -29% drop YoY. Another effect of the crisis was the drop in the average deal size of African VC tech equity deals. The absence of mega-rounds explains to a great extent the drop in funding amount.
The monthly breakdown shows that there was no clear and significant impact on activity level attributable to the crisis and, in fact, every month of 2020 saw more deals closed than the same month in 2019.
A resilient ecosystem which already creates value
Investors may have slowed down their processes, and founders delayed their rounds for better times, but the ecosystem still benefitted from a boost and acceleration of digitalization of key economic sectors, such as: Agriculture, Logistics & Mobility, Offgrid Energy, and Healthcare.
The fifth Partech Africa annual report on African tech start-ups is based on the same methodology as the previous years: it covers equity deals in tech and digital spaces, and funding rounds higher than US$200K.
Read the full report on Partech's website.
Born in San Francisco and Paris, Partech is one of the most active VCs in the world, bringing together capital, operational experience and strategic support for entrepreneurs at seed, venture and growth stages. In 2020, Partech invested in 82 startups across 24 countries in Europe, America, Africa and Asia, and generated US$ 1.3B in aggregate exit value.
About Partech Africa
Headquartered in Dakar, Senegal, Partech Africa is the largest VC fund dedicated to technology startups in Africa. Partech Africa focuses on series A and B equity rounds in startups which are changing the way technology is used in education, mobility, finance, healthcare, delivery, energy, etc.