Africa VC deals hit record high

African venture capital deal-making has hit record high volumes bolstered by a frenzy of investment interest in Africa’s technology space.

Early-stage dealers closed 225 deals in 2020, an approximate 16% year-on-year rise, from the 194 sealed in the previous year.

This is the highest level of aggregate volumes reached in the venture capital space in the 10 years since 2010, according to Preqin’s figures.

The venture capital volumes are about eight times the 31 closed in 2020 across Africa’s growth and buyout spaces. This has been revised from the 29 deals reported at the start of the year.

Technology sector reigns

The technology sector reigned in the year, with a good number of players injecting capital in the software and internet spaces.

Within the technology space, the most popular were the software transactions with 26% and internet , at 13.7%.

Notable deals in the technology space include Knife Capital’s investment in inQuba, a South Africa-based software company that provides a customer engagement platform to corporate clients.

TLcom Capital was also active in the space, backing a pre-seed funding round in Okra, a Nigeria-based software company. Okra offers a platform which enables individuals to connect their bank accounts directly to third party applications – using an application programming interface (API).

Technology was tailed by the financial services sector, as the second most popular, with 18% of the total deal volumes in 2020.

Agribusiness and consumer services sectors were also popular, almost on par in their delivery in the year.

The agribusiness space was slightly ahead with 5.3%, while the consumer services sector accounted for 4.9% of the deal volumes.

South Central & West Africa rule

South Central Africa and West Africa were the busiest early stage regions in 2020, almost on par in their delivery in the year.

Of the two regions, South and Central Africa, which includes South Africa, took a slight lead, delivering 27.1% of the deal volumes.

Of these, 22.7% were delivered by South Africa alone. One of the deals to note in South Africa include AfricInvest and Cathay Innovation backing an approximately $16.7 million (R250 million) Series-B investment round into Aerobotics, an agriculture technology company.

Smaller transactions in the region include a deal from Zambia, with Africa Trust Group (ATG) injecting $1 million in Lupiya, a technology-based financial services company.

The South Central Africa region covers 18 countries, with Namibia and Botswana being some of the most active in the year.

Meanwhile, West Africa delivered 26.7% of the deal volumes, with the bulk coming from Nigeria, which alone brought in 22.2%.

Deals to note include Lateral Capital backing an investment round in SeamlessHR, a Nigeria-based technology company focused on the business services space.

Other deals in Nigeria included V8 Capital Partners backing a series-A investment round in 54gene, a business services technology company focused on the healthcare space.

Deal-making volumes for West Africa were drawn from 15 countries, with Ghana also being amongst the most active.

Noteworthy deals in Ghana include Consonance Investment Managers leading a seed investment round in Africa Foresight Group (AFG), a business services company.

The North Africa region came in third with 25.7%, with Egypt delivering most transactions at 22.2%, followed by Morocco and Tunisia with 1.8% each.

Deals to note include Partech Ventures backing a $4 million series-A funding round in MoneyFellows, an Egypt-based financial services technology company.

East Africa was the least active in the region in deal volumes in 2020, delivering 20.4% of the overall Africa deal volumes.

East African numbers were drawn from 13 countries, supported by transactions from Kenya, with Tanzania and Ethiopia being among the most active.

In Kenya, Aster Capital was an active investor, backing a $3 million pre-series B funding round into Mawingu Networks, a Kenya-based telecommunications services company.

In 2020, overall early-stage deal making in Africa saw a number of US-based investors deploy capital,  including Acumen Capital Partners and Deciens Capital.

US-based SixThirty and Adjuvant Capital were also active in the space during the year, entering the African market for the first time.