African IT startups offer opportunities

Investment into African startups is at an all-time high. 2017 saw over $195 million invested into technology startups on the continent over the course of the year, making IT startups the biggest winners in Africa’s growing economy.

With African tech hubs, startups and founders starting to mature and gain deeper understanding of local markets, investors are increasingly looking towards the continent, says Louise Robinson, MD of lead generation agency CG Consulting. While African IT startups are offering good returns for those wanting to invest in innovative new businesses, they are also an untapped opportunity for those companies that can help them build and grow their businesses.

“Reaching these new companies is even harder than getting to decision makers in other African enterprises – which is usually a challenge. Finding out who they are, who the correct person to speak to is, and what they are trying to achieve, is close to impossible without a partner who has access to that information,” Robinson says.

“We have a comprehensive list of all of the ICT startups and their decision makers on the continent, providing an effective way to reach them. In addition to this database, we have created a number of effective campaigns targeting African IT startups, which have successfully allowed companies from across the globe to do business with these innovators.”

Partech Ventures’ latest annual funding report shows that over the past 18 months, African fintech startups in particular have grown in appeal and reputation with a number of big-ticket deals. The appeal is linked to the fact that African IT startups are not entirely disrupting sectors which currently exist, instead plugging gaps in those sectors.

South Africa, Kenya and Nigeria continue to dominate as investment destinations, accounting for 76% of total funding in 2017, and startups in Francophone Africa have also seen more investment, accounting for $55.5 million—10% of the total funding, and nearly 14% of the total transactions in 2017.

“Across the region digital channels are expanding as customers increasingly move online. The productivity gain from ICT in Africa is unprecedented, and the IT startups on the continent are actively evolving numerous sectors and industries. Africa has been offering great opportunities for international companies for many years now, and tech startups are providing even more,” Robinson concludes.