In recent times, African startups have been in the news for developing modern technologies. From the funds raised for expansion to the innovations and software developed, the African Tech ecosystem is booming.
Following the strides recorded in 2019, we have documented our 2020 tech predictions for Africa below;
Financial Inclusion
The race to bank the unbanked will be the goal of African fintechs in 2020. The previous years have witnessed startups race towards achieving financial inclusions. Worthy of mention include Safaricom’s MPesa mobile money service in East Africa. Flutterwave connected Africa with China using a single API and earned a place on ‘YCombinator’s Top Companies Valued at above $150 million’.
Financial inclusion was not only promoted by fintechs in 2019, Mobile Network Operators and on-demand ride-hailing startups also introduced mobile money services. For instance; OPay, on the one hand, integrated lifestyle and financial services and on the other hand, secured $170 million and deepened its service offering to accommodate more business verticals. This trend will enter into 2020 as more companies diversify to meet the customer’s need.
Emerging Technology
Amidst the startup acquisitions and expansion, Mara built the first wholly made in Africa mobile phones in the year 2019. Some of the prominent technologies include AI, IoT, Drone Tech, Robotics, and VR. 5G technology is also penetrating the African market. The network is used to run AI, unmanned aerial vehicles and driverless cars. It’s expected that more consolidation in this space will occur throughout 2020.
Logistics
The logistics sector is another goldmine for African startups. The likes of Lori Systems, Hello Tractor, Bwala, Kobo 360 and Sendy were in the news for either raising funds or expanding into new markets. By 2020, most of these African startups will become full-blown regional giants and soon-to-be unicorns. With the AfCTA underway, Africa is set to witness a boom in trade activities across all regions and the logistics industry is strategically positioned to support this drive.
More IPOs on Foreign Stock Markets
There are already 110 African companies currently listed on the LSE with a total market cap of $197 billion. Several other tech startups are planning to list both on local and foreign stock markets in 2020. In April 2019, Jumia Technologies made its debut on the NYSE. Several African companies are choosing to list both on their primary and foreign stock markets. Both Airtel and Helios Towers also listed on the LSE in June 2019. Interswitch already has a billion-dollar valuation before going public on the LSE in 2020. Another tech company to list in 2020 is iROKOtv.
The Entrance of New Media
The use of digital technologies such as the internet and influencer marketing on social media has become the new trend. In 2019 alone, several startups employed social media channels with the help of popular celebrities to sell out their ideas. This idea has come to stay and will continue into 2020.
Incessant Internet Shutdown – We hope this is reduced in 2020
On the flip side, there has been an ongoing government clampdown on social media rights of citizens. Several African governments shut down the internet and even imposed taxes on digital payments in 2019. Incidents range from shutting down internet services to prevent exam malpractice in Ethiopia, an ‘Information and Communication Amendment Bill’ in Kenya and the brewing ‘Protection from Internet Falsehood and Manipulations Bill’ in Nigeria.
There were also reported cases of internet clampdown in Chad, Tanzania, Liberia, and DR Congo. Although these violate the right to freedom of opinion and expression of the citizenry, it might spill into 2020 if not properly managed.
Investments
Statistics show that investors are taking Africa-based tech startups very serious. In 2019 alone, Andela raised $100 million Series D funding. PEG Africa raised $25 million while Branch raised $170 million in respective Series C debt and equity rounds. Also, Visa invested $200 million in Interswitch, totaling its valuation to $1 billion. By the end of April, 44 startups had raised over $1 million each in 2019. Sectors like logistics, fintech, healthcare, energy and agriculture are receiving funds. This will also continue into 2020.
It’s still early days but we are confident that Africa is investment-ready. Its large market size and enormous population of consumers are adequately leveraged by tech startups. They are rapidly developing innovative solutions that are commanding the attention of the whole world.
These are some of the more interesting developments but the list is in-exhaustive in one post. 2019 was great and from all indications, 2020 promises to be better for the African tech ecosystem.