Four inspiring things emerging in the African tech space

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Chisom Udemezue, Assistant Manager, Knowledge Management, Clean Tech Hub Nigeria, Oluwole Hammond, Global Shaper, Abuja Hub,

• Africa’s tech ecosystem has experienced tremendous growth in recent years, with 2021 seeing a record number of investments.
• Tech start-ups across the continent received $4,77 billion of investments, with the emergence of at least 5 new tech-unicorns (start-ups valued at $1 billion).
• A key feature of this growth is tech talent development and the empowerment of female start-up leaders and developers.

The African tech ecosystem grew exponentially in 2021 with capital investments hitting all-time highs. Africa’s young, digitally-literally population is fuelling this rapid technological development. The many successes of 2021 and host of fast-growing tech-companies across the continent is creating hope for more fantastic feats in years to come.

Record funding raises, mega-deals, and new unicorns

The year 2021 was a great one for start-ups globally, and for Africa in particular. The continent saw total venture funding exceed two and a half times what it was in 2020. This figure amounted to an impressive $4.77 billion. This translates to an average of $1 million raised every two hours. As far as distribution is concerned, 30 African nations raised at least $100k in funding across the year.

The ‘Big Four’ countries, Nigeria, South Africa, Egypt, and Kenya, received 81% of the investments. Out of the eight unicorns in Africa, five of them (Flutterwave, Andela, ChipperCash, Opay, and Wave) attained unicorn status in 2021.

While much funding came from global investors, local investors are increasingly funding African innovation. This boost in local venture capital participation will aid the growth and expansion of start-ups in Africa. In 2021, Ventures Platform, an Africa focused early-stage VC fund, announced a $40 million investment fund.

Olumide Soyomobo also launched pan-African VC firm Voltron Capital. It will fund 30 start-ups in Africa across different sectors. Ticket sizes will range from $20,000 to $100,000 per company.

Africa’s untapped tech talent resources

Although African entrepreneurs have developed tech-enabled solutions to development challenges, global tech giants sometimes overlook African talent. In 2019 Parag Agrawal (now Twitter CEO) visited Nigeria. He was impressed with the availability of technical skills in the country. During his visit, the company hired Dara Oladosu to help build a native ‘quoted tweet’ feature for the social media platform. This proves African developers’ ability to compete at the global level.

The increase in global start-up space has led to a rise in the demand for young, talented workers. Africa is emerging as a significant source of software engineering talent and is home to the fastest-growing population of developers. Microsoft, in turn, plans to open its first development centres in Africa in 2022 and will hire 100 full-time African developers by 2023.

The demand for a pipeline of software engineers led to the growth of talent accelerators across the continent. Some accelerators include Andela, Decagon, AltSchool, and Univelcity. One of them, Decagon, has an ambitious goal to raise 10,000 software engineers in 6-month batches. These accelerators aim to create new pathways to careers in tech in Africa. Such programmes can turn Africa into a pool for global talent in tech.

More women are getting into tech and raising more money

According to UNESCO, women represent 30% of professionals in Africa’s tech sector. This is above the global average of 28%. This growth comes from coordinated action to involve women and girls in tech and STEM fields on the continent.

Initiatives such as Women in Tech Africa, She Code Africa, and Africa Code Week are equipping women and girls with skills and opportunities aimed at reducing gender disparity. Last year, Ingressive for Good (I4G) launched a ‘Women in Design’ programme, which awarded design scholarships to 1,000 women.

Female-led start-ups have historically raised much less funding than male counterparts. A dive into the investment data shows female CEOs raised about 7% of 2021 tech investments in Africa. 2019 and 2020 saw much lower figures at 4% and 2%.

While women-led enterprises made progress in 2021, there is room for growth. Female-led start-ups like Lami, a Kenyan insurtech firm, and Ejara, a blockchain start-up from Cameroon, raised $1.8 and $2 million, respectively. The launch of FirstCheck Africa, an angel fund for women-founded/co-founded tech start-ups bodes well for female tech empowerment.

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The gradual growth of an enabling environment

In 2021 South Africa led the way on a regulatory level with a new policy to turn the country into a start-up nation. Nigeria’s IT Chief approved a private sector-led Nigeria Startup Bill (NSB), which will be presented to the National Assembly. Kenya’s senate passed the Startup Bill, which awaits the executive’s approval. As evidence of how much value tech can bring to economies, Senegal saw start-ups raising $222m. This accounted for 0.88% of national GDP. This shows the added value of tech for economies.

African leaders should accelerate the adoption of forward-thinking policies. They must provide fiscal and non-fiscal incentives that enable an environment for innovators, entrepreneurs, and investors to operate, grow and thrive in.