The surge reflects renewed investor confidence driven by large funding rounds, securitized bonds, and increased interest in clean energy and fintech. Although four startups did not disclose their funding totals, disclosed figures show that the top 10 startups attracted $388.6 million, accounting for nearly 88% of all funding raised during the month.

Fintech (17 startups), logistics (8), and agriculture (6) continued to dominate sectoral activity. Egypt, Nigeria, South Africa, and Kenya remained the continent’s strongest innovation hubs, collectively attracting the largest share of deal flow.

The rebound signals positive momentum heading into the final quarter of the year, following months of subdued investor activity.

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The United Nations Development Program (UNDP) has announced the opening of applications for its timbuktoo Fintech Startup Accelerator program, where selected African startups will receive $25,000 equity-free funding.

According to the program’s announcement published by the UNDP, in addition to the funding, startup founders in the program will also receive mentorship and coaching from Africa’s leading industry experts and seasoned entrepreneurs.

Other benefits include access to a network of fellow startup founders and entrepreneurs from across the African continent; the opportunity to connect with and access potential investors as well as customers; and access to technical resources, tailored to accelerate the growth and impact of the startup.

The program announcement indicated that the applications are open to technology-focused entrepreneurs and startup founders across Africa aged between 18 and 35, who can build, or are already building, fintech startups that meet the following criteria:

• Startups with founders who are citizens of an African country.
• Startups must be locally owned and based in any African country.
• Startups leveraging technology in the financial services sector to capitalise on complex development opportunities and solve challenges.
• Startups with a minimum viable product.
• Startups with existing corporate governance systems, accountability, and social and environmental safeguards.

In addition, UNDP said the program will be supporting startups that have a technology-enabled solution at its core, utilizing digital tools and platforms to drive innovation and efficiency in the financial sector.

Attention will also be paid to startups whose solutions contribute towards one or more of the SDGs, by promoting growth, industrialization, trade, education, health, and inclusive governance among others.

According to the organizers, the application portal will be open from May 31st, 2024, to the 21st of June 2024. Interested and qualified startups can apply here.

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TECHDIGEST- As the tech world prepares for the largest tech and start-up event in Marrakech, Morocco, later this month, Nigerian start-ups are making headlines for their contributions to AI and digital solutions. From AI-powered healthcare to advanced agricultural SaaS platforms, these innovators are addressing cross-continental challenges and reshaping Africa’s digital economy.

At the Al Everything Expo during GITEX Africa 2024, held from May 29 to 31, Nigeria’s tech scene will be prominently featured. The event will highlight the nation’s strides in AI, showcasing solutions that attract global venture capital and investment.

Nigeria’s AI sector, is expected to exceed $1 billion in market value by 2024 according to Statista, is projected to grow at an impressive rate of 17 per cent annually, reaching $3 billion by 2030. This rapid growth underscores the country’s role as a leader in AI and tech talent development.

One standout participant is FundusAI, the continent’s first AI-powered diabetic care ecosystem. This innovative platform enables early detection of Diabetic Retinopathy, a critical advancement in eye health. FundusAI’s CEO and Founder, Abulmalik Adeyemo, aims to diagnose over five million patients annually by 2027 and expand the platform’s capabilities to cover additional eye health issues.

Another notable Nigerian innovation is Farmatrix, a SaaS platform revolutionizing agriculture. Utilizing advanced AI algorithms, Farmatrix connects farmers with agro-commodity aggregators and buyers in real-time, significantly reducing post-harvest losses and increasing profits. Nyafamu Manzo, Farmatrix’s founder, highlights the platform’s impact, noting that over 60 per cent of smallholder farmers in Nigeria struggle with nearly half of their post-harvest yield due to a lack of market access.

Tomiwa Aladekomo, CEO of Big Cabal Media, praises Nigeria’s efforts in nurturing tech talent and driving productivity, setting an example for the continent. The narrative of Nigerian start-ups at GITEX Africa 2024 is not just about technology but also about the potential to attract significant investment and foster economic growth across Africa.

As Nigeria’s top innovators take centre stage, they exemplify how AI and digital solutions can address critical issues and contribute to a thriving digital economy. The GITEX Africa 2024 event will serve as a powerful platform to spotlight these advancements and encourage further investment and collaboration in Africa’s tech landscape.

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The slowdown in funding into the African startup space led to the layoff of over 2,500 employees in 2023, Briter Bridges has disclosed.

In the report titled ‘Africa 2023 Investment Report: Crisis or adjustment?’, the data intelligence firm argued that despite the slowdown in funding, the continent’s tech ecosystem was undergoing a reconfiguration rather than a crisis.

It said, “We may be observing a process of reconfiguration or adjustment, which comes as a consequence of the two cash-abundant years that followed Covid-19, during which valuations skyrocketed and the high liquidity emanate that investors had to compete for ever more expensive deals.

“This process arguably created a generation of overpriced businesses which struggled to find an equally bullish investor market as soon as the tide turned and capital became less available and more expensive. The result? Many stagnated or were forced to downsize or shut down.”

Last year, the number of startups that shut down or reduced their growth trajectory increased due to a contraction in investment volumes, further stated.

The startups included Twiga Foods, Copia, Cellulant, Jumia, Wave, Marketforce, and Renmoney.

Other startups that shut down in 2023 included Okadabooks, Vibra, Pivo, Lazerpay, 54gene, Hytch, among others.

Also, dozens of firms either declared bankruptcy or sought asset sale to other startups, the data intelligence firm noted. In 2023, startups on the continent raised $4bn, 23.08 per cent lower than the $5.2bn they raised in 2022, Briter Bridges revealed.

There were 1,080 plus funding deals in 2023, an 11 per cent increase from the 975 there were in 2022.

The firm stated that deal activity in 2023 remained stable and well above pre-Covid volumes, with the majority of disclosed investments happening at the pre-seed, accelerator, and early stage.

It noted, “This was influenced by the rise of several new vehicles. Both international accelerators such as Techstars and 500 Global and Africa-focused Founders Factory Africa and Flat6Labs remained active with fresh capital raised to fund large cohorts.”

Overseas funding remained crucial to startups, especially those in their late stage. Nigeria was not the major destination for startup funding in 2023. Kenya was the hotspot for funding, attracting $806m, followed by Egypt ($675m), Nigeria ($575m), and South Africa ($565m).

Nigeria continues to be the leader in terms of total funding raised since 2014 though. The firm revealed that Nigerian startups had raised over $6bn between 2014 and 2023.

Kenyan startups have raised over $5bn, Egyptian startups have done over $2bn, and Rwandan startups have raised over $800m.

“Debt financing has begun adopted by investors as one of the go-to instruments to fund companies that present proven business models and the ability to repay their debt through revenues,” Briter Bridges said.

Commenting on sectoral diversification of funding, the firm highlighted that while fintech captured about 25 per cent of deals, others such as health and biotech, climate and cleantech, and logistics are also on the ascendency.

Generally, 2023 was a relatively bad year for startups. In its funding analysis, Africa: The Big Deal, a data insight firm that tracks startup funding of 100k and above, disclosed that funding into Africa declined by 39 per cent to $2.9bn in 2023.

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African startups faced a 39% decline in funding, raising $2.9 billion in 2023 compared to $4.8 billion in 2022, as reported by ‘Africa: The Big Deal.’

Despite the decrease, the result was better than anticipated in light of the global VC slowdown. The report highlighted that 500 startups secured at least $100,000, down from 821 in 2022, with the average deal size remaining stable.

Notably, the research platform revealed a shift towards debt financing among African startups, reaching $1.1 billion, a 47% YoY increase, while equity funding fell by 57%. In 2023, startups raised 65 cents of debt for every $1 of equity, constituting 38% of all funding, compared to 16% in 2022.

Briter Bridges noted that this trend had been evolving, with African startups borrowing $2.1 billion between 2014 and 2023, driven by a decline in equity funding over the last five years.

The rise of debt financing in Africa’s startup ecosystem is evident, growing from 4% to 26% from 2019 to H1 2023, according to Briter Bridges.

The report emphasized that the significant fall in equity funding, from $2.6 billion in 2022 to $1.4 billion in 2023, played a pivotal role in this shift.

Over the past decade, more than $2 billion in disclosed debt funding has been raised by digital, technology-enabled, and green companies in Africa, involving over 140 funders and 200 deals, according to Briter Bridges.

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The interactions and connections that individuals, groups, or organisations have online and in digital environments in Nigeria have become interesting prospects for startups which are able to thrive due to the enabling environment that has progressively developed over the years.

It is quite impressive how digital engagement has driven a lot of youth to become smart entrepreneurs as they leverage technological tools such as online markets, AI delivery mechanisms and services etc. This has assisted in boosting numerous businesses and is gradually bringing about closure to the demand and supply gap, potentially leading to a stable digital market in Nigeria.

Interestingly, the ever-sprawling digital inclusion programmes such as access to technology, digital skills and literacy, community engagement, and development of policies among others have bridged the digital divide by providing equitable opportunities for people to participate and benefit from the digital world.

The saying, “To survive Nigeria all you need is Data,” has become a prophetic statement that foretold the level of social media engagement and digital illiteracy among the youth. This has improved social media engagement, online business facilitation, content consumption, online communities’ interaction, customer interaction etc.

It was therefore not a coincidence that the ICT sector contributed 18.44 percent to the country’s GDP in 2022. It was due to years of meticulous planning and huge investments in the ICT potential of the Nigerian youth.

While he met a thriving ICT industry, the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, has also in his determination to accelerate ICT literacy and digital inclusion in Nigeria taken a couple of bold and giant steps. One of those historic steps is the launch of the Startup Support and Engagement Portal (https://startup.gov.ng).

The portal which was done with pomp and pageantry by the Minister is a key requirement for the implementation of the Nigeria Startup Act which was signed by ex-President Muhammadu Buhari.

The NSA was an executive bill that became an Act on the 19th of October 2022 as a legal framework to help create an enabling environment and make provision for startups to have access to public and private funding among others.

The startup portal is expected to drive the identification and aggregation of Nigerian startups, venture capital companies, hubs and innovation centres in order to facilitate engagement and support for ecosystem players.

By providing a legal and institutional framework for the development of Nigerian startups, the Act is also creating an enabling environment for the establishment, development, and operation of startups in the country.

For instance, the Act applies to all companies incorporated under the Companies and Allied Matters Act (CAMA) and grants the startup label and organisations and establishments, whose activities affect the creation, support, and incubation of labelled startups in Nigeria.

In order to determine the startups with the right metrics to be considered tech-enabled, the Act provides for “labelling” which is a merit granted to qualified startups and grants them access to incentives.

According to the provisions of the Act, for a startup to be eligible for labeling, it must meet the criteria to be a limited liability company under the CAMA and has been in existence for a period not more than 10 years from the date of incorporation.

It mandates that a Startup Support and Engagement Portal should be established to facilitate the issuance of the startup label and also bridge the gap between regulators and startups. It also spells out the requirements for a company to obtain a startup label. Companies issued with a startup label have obligations under the bill and failure to comply with these obligations can revoke their startup label.

Startups can access a special seed fund created under the Act. The Act establishes a Startup Investment Seed Fund, which is designated for startups alone. It will provide finance and tech relief for startups. This means increased access to funding that will grow the startup ecosystem. It will be easier for startups to fund their operations by leveraging the grants and loans that will be available to them.

Also, companies labelled as startups are expected to benefit from some tax reliefs and incentives under the Act. These labelled startups are eligible for pioneer status incentives and other tax reliefs. Thus, labelled startups with at least ten employees where 60% of the employees have no prior work experience within three years of graduation or any vocational program have access to percentage-based tax relief.

NITDA’s Impact

The National Information Technology Development Agency (NITDA) under the competent watch of Kashifu Inuwa has in recent years been operating with this youth-centred philosophy which says that to empower young people, take them away from the streets and reduce crime, the solution is not to promise them white collar jobs that are not there; rather, the way out is ICT literacy.

In line with its mandate, NITDA has committed a lot of energy and resources to the full implementation of the National Digital Economy Policy which is geared towards creating innovative solutions that will train and engage young citizens on how to be productive while leveraging on ICT.

This initiative led to creation of awareness and deployment of tech literate people to numerous communities, establishment of training centers across the country, startup empowerment programmes, and other numerous activities that have provided people in rural areas with access to digital services and enable them to profitably scale up their businesses.

The creation of various platforms for ecosystem players to gather and collectively discuss the way forward in the unfolding startup revolution has enabled more growth in the industry.

NITDA has liberalised the tech ecosystem in Nigeria by taking ICT knowledge to the doorstep of youth and women in communities where such opportunities merely existed in the dreams of the community dwellers. NITDA has empowered millions of Nigerian youths with skills, tools and life-changing opportunities to live their dreams.

In the academia, media, real estate and other areas, NITDA has come through for a lot of upcoming businesses and supported them to stand on their feet by providing resources, computers, other tools and internet facilities for their operations.
Just to mention a few examples, there was the distribution of 6000 iPads to Nigerian institutions to promote virtual teaching and the partnerships secured with tech giants like Microsoft, HUAWEI, KOICA, Cisco among others. Also, the 2022/2023 Blockchain Technology Training for over 30,000 Nigerians has engaged and supported innovations towards building digital governance and inclusion.

Last Line

There is no doubting the fact that the Minister has come up with the best ideas for innovation and revolution in the sector. He has also met the right foundation with what his predecessor did in office and what NITDA has been doing for years.

With the launch of the startup portal, Nigerian startups are in for a bountiful period and the economy will be the ultimate beneficiary of the provisions of the Act and the Minister’s passion towards its implementation.
Under the watch of President Bola Ahmed Tinubu and this vibrant Minister who are determined to elevate the living standard of the Nigerian youth by providing the funds, the mentorship and training for them to be take advantage of the limitless opportunities in the digital space, this country will soon be flooded with millions of digital entrepreneurs who are gainfully employed and also creating opportunities for others to exhibit their potential and earn a decent living.

Zeenat Sambo is Tech Digest Staff Writer in Abuja

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TECHDIGEST – Google has introduced the groundbreaking “Google for Startups Accelerator: AI First” initiative, aimed at bolstering African startups utilizing artificial intelligence to tackle local challenges.

This visionary program acknowledges the global impact of AI, revolutionizing industries and reshaping what’s possible, while emphasizing the crucial role African startups play in addressing pressing regional issues through AI solutions.

Dubbed the ‘AI First’ program, it provides dedicated support to startups eager to explore the potential of AI. Drawing insights from successful past endeavors like Google for Startups Accelerator: Africa, the Google for Startups Black Founders Fund, and the Google for Startups Accelerator: Women Founders, the core objective remains unchanged: to elevate and amplify African-driven solutions.

Applications are now open for the 10-week equity-free accelerator, inviting startups up to the series A stage based in Africa or developing AI and machine learning solutions for Africa-centric challenges.

Participants gain access to Google’s AI expertise, technical resources including up to $350,000 in Google Cloud Credits, mentorship from seasoned AI experts, and invaluable networking opportunities.

READ ALSO: NITDA Committed to Creating Life-transforming Opportunities for Girls, Women in Nigeria

Folarin Aiyegbusi, Head of Startup Ecosystem, Africa, expressed, “Africa’s tech landscape is vibrant and ever-evolving.

“It’s inspiring to witness African startups not only harness AI to address our distinctive challenges but also set global benchmarks.

“AI First’ signifies more than just a program; it’s a testament to our unwavering belief in these startups’ vision, ensuring they receive the necessary support and guidance to fulfill their potential.

“Since its launch in 2018, the Google for Startups Accelerator: Africa initiative has assisted 106 startups from 17 African nations.Collectively, these startups have secured over $263 million in funding and generated over 2,800 direct job opportunities in the region”.

To participate in the Google AI First Accelerator Program for African Startups, interested parties should apply by September 6, 2023.For comprehensive information and application submission, please visit the portal.

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TECHDIGEST – Mobility54, a Corporate Venture Capital of Toyota Tsusho & CFAO group is calling on innovative African startups to apply for its 2022 Digital Transformation Challenge. The venture capital is looking for innovative solutions in its five investment areas which include logistics, transport, mobility marketplace, mobility fintech, and mobility carbon neutral.

According to the company, applicants for the challenge stand the chance to be the first in line to get access to its potential direct capital investments. They would also have an opportunity of being introduced to other world-class investors.

READ ALSO: Apply To Pitch At GITEX 2022 North Star Startup Competition

While noting that the applications close on June 15th, 2022, it said selected startups would be announced in a special event, gathering investors, top managers, and international decision-makers – to be organised at the time of the Tokyo International Conference on African Development (TICAD#8).

Eligibility

To be eligible for the programme, Mobility 54 said: “Applicants will need to meet the following criteria:

Be early to mid-stage start-up realizing a significant part of the activity in Africa
Operate in the Mobility Tech & Services business sector

Businesses with a minimum of 3 months’ revenues

Be an innovator and demonstrate a growth potential with strong market traction.”

What you should know

Mobility 54 was established in October 2019 and completed its 1st fund investment period at the end of December 2021.

In April this year, Mobility 54 invested $2 million in Nigerian startup, OnePort, a digital cross-border logistics platform.
The company says it is investing “With Africa For Africa”, and helping solve the social and industrial challenges in Africa.

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TECHDIGEST- Giant tech company, Google says it plans to invest $1billion over 5 years to support Africa’s digital transformation.

The investment focuses on enabling fast, affordable internet access for more Africans; building helpful products; supporting entrepreneurship and small business; and helping nonprofits to improve lives across Africa.

Sundar Pichai, CEO of Google and Alphabet, announced the planned $1bn investment today at Google’s first-ever Google for Africa event, held virtually and live-streamed across Africa, including Nigeria.

Under the $1billion investment plan, Google is building global infrastructure to help bring faster internet to more people and lower connectivity costs. The subsea cable Equiano will run through South Africa, Namibia, Nigeria, and St Helena and connect the continent with Europe.

Through a Black Founders Fund, Google will invest in Black-led startups in Africa by providing cash awards and hands-on support. This is in addition to Google’s existing support through the Google for Startups Accelerator Africa, which has helped more than 80 African startups with equity-free finance, working space, and access to expert advisors over the last three years.

Google also announced the launch of an Africa Investment Fund. Through this fund, the company will invest $50M in startups and provide them with access to Google’s employees, network, and technologies to help them build meaningful products for their communities.

In collaboration with the non-profit organisation Kiva, Google is providing $10M in low-interest loans to help small businesses and entrepreneurs in Ghana, Kenya, Nigeria, and South Africa get through the economic hardship created by COVID-19.

In addition, Google is expanding its commitment to support nonprofits working to improve lives across Africa, with $40M to help more partners who are responding to challenges they see first-hand in their communities – innovators like the Airqo team at Makerere University, who use AI and sensors to monitor poor air quality, a leading cause of premature death.

It is also providing $3M in new grant funding to expand this pioneering work from Kampala across 10 cities in 5 countries on the continent.

In 2017, Google launched its Grow with Google initiative with a commitment to training 10 million young Africans and small businesses in digital skills. To date, Google has trained over 6 million people across 25 African countries, with over 60 percent of participants experiencing growth in their career and/or business as a result.

Google has also supported more than 50 nonprofits across Africa with over $16million of investment and enabled hundreds of millions of Africans to access internet services for the first time through Android.

Pichai said: “We’ve made huge strides together over the past decade — but there’s more work to do to make the internet accessible, affordable, and useful for every African.

“Today I’m excited to reaffirm our commitment to the continent through an investment of $1B over five years to support Africa’s digital transformation to cover a range of initiatives from improved connectivity to investment in startups.”

Nitin Gajria, Managing Director for Google in Africa added: “I am so inspired by the innovative African tech startup scene. In the last year, we have seen more investment rounds into tech startups than ever before.

“I am of the firm belief that no one is better placed to solve Africa’s biggest problems than Africa’s young developers and startup founders. We look forward to deepening our partnership with, and support for, Africa’s innovators and entrepreneurs.”

Also speaking, South Africa’s Minister of Small Business Development, Stella Tembisa Ndabeni-Abrahams, said: “I am happy to note that Google has been active in supporting small to medium enterprises, dedicating even more resources to this sector, since the start of the Covid-19 pandemic. In the last 12 months, Google has helped close to 500,000 African businesses get online and reach new customers.”

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