The year 2021 has come to a wrap and it is time to start looking on to the New Year, new goals and new achievements. The African startup space witnessed tremendous growth in 2021; the space saw an increase in funding, interest and investment from investors across the globe. A good number of startups also emerged as unicorns this year.
Collectively, African startups raised $4 billion in funding last year. That’s huge! Compared to a few years back, this is very impressive. In 2018, cumulatively, startups in Africa raised only $385 million. The year 2021 was characterized by huge progress for startups in Africa.
A number of factors have led to this geometric growth. There is a wave of awareness looming in the continent and startups are identifying more opportunities that have always been present in Africa and leveraging them. In the last few years, there has been an increase in the penetration of smartphones and the internet, and together, these have contributed hugely to the success of these startups which are majorly based on mobile platforms. These startups, especially fintechs, have helped narrow the financial gap of the continent by increasing access to financial services. Apart from smartphone and internet penetration, the African startup scene received increased interest from investors and increased commitment from venture capital firms. There was also increased participation in accelerator programs by startups from Africa; this helped put them in the spotlight.
Another factor is “maturing tech talents”. Founders, CEOs and people related to the startup space in Africa have gathered both the skill and experience they need to bring the continent to the forefront. Many founders are already on their second or third startup and are trying new models and new ideas. All these have contributed to pushing Africa’s startup space forward.
Here are some of the startups in Africa we think everyone should be looking out for in 2022;
OPay naturally tops our list. The Nigerian fintech was in the news this year for plenty of reasons. In 2021, OPay received the first Africa-based investment from SoftBank Group and also had the largest fundraising round that happened in Africa in 2021. The startup was, for the second time, included in CB Insight’s top 250 fintechs in the world. In 2021, OPay became the fourth Nigerian unicorn and the fifth in the whole of Africa, joining the league of Flutterwave and Jumia.
OPay is one of the startups to watch out for this year as the startup has shown massive potentials for growth and continues to put Africa in a good light.
Chipper which came into the scene as a payment platform has seen some massive expansion. Nicknamed the Venmo of Africa, the fintech’s offerings have grown to include payments, cryptocurrency, stocks, etc. The startup is also valued at over $2 billion after it closed a recent Series C round at $150 million.
In total, Chipper has raised the sum of $305 million. Chipper also expanded to the US in October this year where it is currently leveraging a $50 billion market opportunity.
Chipper is the typical “grass to grace” story as it has grown rapidly since when it first appeared.
This Zambian startup is making card issuing and related services easy and convenient. The fintech operates an easy-to-use API framework that can fund cards issued in any currency, configure card rules and design the cards according to the specifications of its client companies. Union54 is basically powering other fintechs in their attempts to narrow the financial gap in Africa. In October, the startup raised $3 million in a fundraising led by serial investor Tiger Global.
Union54 is on our list of African startups to look out for because it has so many potentials for growth and could grow to become a very solid financial backbone in Africa in the next few years.
In 2021, Lagos and London based edtech startup Edukoya secured the largest pre-seed funding and we couldn’t ignore this startup when it crossed our radar! Founded in May 2021 by Honey Ogundeyi, a former executive at digital bank Kuda and a serial founder, Edukoya is taking services provided by offline test preparation centres in the country online and is providing after-school guidance and tutoring for students planning to take specific examinations. Edukoya boasts of a range of features and the platform is popular for its exam preparation and homework assistance which is always available and its question bank that comes with step-by-step solutions to these questions.
Edukoya is currently available in beta version and plans on going live this year. This year, the startup plans on building its learner base as well as activating expansion plans.
Edukoya is one startup to look out for because its model promises to revamp the educational sector in Nigeria, and for a startup that raised the largest pre-seed in 2021, it is only natural to expect more this year. Who knows, Edukoya may go on to raise the largest seed round in Africa.
With many startups operating in Anglophone Africa leaving the French-speaking areas with no attention, Wave is seeking to leverage the endless opportunities in the hardly-seen francophone regions of Africa. Wave is a peer-to-peer and remittance platform and can be likened to any other fintech platform. It powers bills payments, purchase of airtime, peer-to-peer transactions, etc.
In a Series A round led by Sequoia Africa and Stripe where the startup raised $200 million, Wave first captured our attention. The startups major market is Senegal. It is also operating in Cote’d Ivoire and has plans on entering markets in other francophone African countries this year.
Wave is one startup to look out for this year because of its attempts at capturing francophone Africa. This year, however, the startup may see huge competition from other startups planning to venture into these parts.
54gene is a health-tech startup revolutionizing the African health research sector. In September, the startup closed a Series B funding round at $25 million. The funding round was led by Africa-focused venture capital company Cathay AfricInvest Innovation Fund and the participation of Endeavor Capital, Plexo Capital, etc., and existing investors like KdT Ventures, Adjuvant Capital, and Ingressive Capital.
54gene came into existence in 2019 as a solution to bridging the gap in the global genomics market. The company was founded by Dr. Abasi Ene-Obong. According to the company’s LinkedIn page, almost 90% of genetic material used in pharmaceutical research is Caucasian. Only 2% is African, despite the fact that Africans and people of African ancestry are more genetically diverse than all other world populations combined. As a result, pharmaceutical research and development is lacking the diverse data that may hold the key to medical discoveries and new healthcare solutions. This was the basic problem that the company sought to solve.
Although it is still a young company, 54Gene has had some impressive moments. Currently, it works with more than 300 researchers, geneticists and clinicians across Africa to build and maintain an African biobank. The company is said to be the first of many to come and was predicted by TIME to have a huge impact on the world of public health and medical science in the 2020s. 54Gene’s biobank houses various African genetic data that could help researchers with their research, etc.
In July 2019, 54Gene raised $4.5 million in seed funding and went on to raise $15 million in Series A funding that took place in April 2020. With the latest funding of $25 million, the total funding that the startup has received amounts to about $45 million, and all these it has achieved within a space of two years.
As part of its achievements, 54Gene announced the completion of a laboratory that is capable of carrying out human whole-genome sequencing here in Nigeria without having to take the samples abroad for studying, thus making the whole research process cost-effective and less time-consuming.
54gene achieved all of these in the space of two years. Imagine what this startup could achieve as the future continues to unfold.
Fintech platform Payhippo provides loans services to small and medium-scale African businesses. Payhippo makes our list because of its efforts at providing financing for SMEs. Although it is largely focused on Nigeria (as it should be naturally as Nigeria has the largest number of SMEs in the country), the fintech is also providing loan services for other SMEs in other African countries.
Payhippo is one startup to look out for because of the change that its model is sweeping across the continent of Africa.
With its platform, Vendease aims to mitigate the challenges, such as inefficiency and time constraints, associated with getting food supplies in the highly fragmented African sector. The company started out on a decentralized marketplace model – connecting suppliers and farms on one side with restaurants and food businesses on the other. Vendease was founded in January 2020 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu and Wale Oyepeju, and is an online marketplace that allows restaurants, hotels and other food businesses to purchase their supplies directly from manufacturers and farms using its platform.
Vendease’s operation entails generating all the possible suppliers that can fulfil an order when a restaurant or food business places it. Vendease assigns the order to suppliers based on best pricing and quality. The delivery is made within 24 hours by Vendease or third-party logistics providers. Vendease also provides delivery service, and this became a service it offered after it came to the realization that some suppliers needed this help because they do not have the sophisticated operations to handle them and because it might be the best way to ensure that deliveries are made on time. The startup is currently operational in Lagos, Abuja and Ibadan and plans to use the funding to expand into other cities and countries by the end of the first quarter of 2022. It also currently works with popular food brands Hard Rock, Shiro and Krispy Kreme.
Vendease raised $3.2 million in October, a very significant raise for a startup in its field. The startup also boasts of holding relevant data as regards its industry which can be monetized if it chooses to.
Whether we like it or not, Vendease is definitely one startup to look out for this year!