Ten years ago, one could easily count the African startups that raised venture capital in a single year. In 2016, 77 startups raised $367 million in venture funding, according to Partech. Nigeria, South Africa, and Kenya accounted for 79.4% of that funding. Financial inclusion attracted the largest share of capital at $206.3 million, or 56.2% of total funding, with fintech accounting for 19% of that investment. By today’s standards, these numbers look almost impossibly small. But they captured a technology economy at the beginning of something.
Some of the earliest startups are gone; others have become major African technology companies. Founders have changed their business models, investors have rewritten their playbooks, and regulators have caught up with industries that barely existed when the first cheques were written. Markets once considered too difficult are now crowded, while some assumptions about Africa’s startup boom have proven wrong. The companies that survived offer a better way to understand the past decade than funding numbers alone do.
The most important change may be that the ecosystem became capable of producing its own momentum. In 2016, a founder who wanted to build a technology company in Africa had to secure not only customers but also the infrastructure, talent, capital, and investors needed. “We are now a long way away from 2014, when we begged investors to back companies like Andela,” Iyinoluwa Aboyeji, co-founder of Andela, the global talent marketplace, and fintech unicorn Flutterwave, told TechCrunch in 2023. That transformation began with a relatively small number of bets.
Originally published by TechCabal.