In 2019, we were unable to ascertain the total amount raised by African startups since most of the funding rounds were undisclosed. Rather, we reported the African startups that received funding above 20 million in 2019.
Similarly, WeeTracker, Partech, and Disrupt Africa also attempted to solve the riddle, using the rounds recorded in Nigeria, Kenya, and Egypt but came up with totally different figures with a hundred-million-dollar difference. Although all three had different parameters for categorizing startups, in most cases, only a few technical writers are privy to the exact figures raised during a funding round.
Partech and WeeTracker, for instance, wrote a report of startups that included confidential investment data of startups. Undisclosed funding rounds makes it more difficult to accurately measure venture funding in the African tech ecosystem.
There have been cases where startups across the continent fail to report funding rounds for the fear of government regulations and restrictions. A typical lesson can be learned from the case of motorcycle-hailing startups in Lagos, Nigeria.
In 2019, OPay raised $170 million over two consecutive Series B rounds, MAX.ng secured $7 million led by Novastar Ventures, while Gokada raised $5.3 million. Shortly after demanding for motorcycle hailing startups to pay N25 million annual licensing fee for every 100 bikes, and an additional N30,000 for each registered bike rider, the Lagos State government still banned commercial motorcycles from plying major routes.
Although the government blamed it on the high statistics of okada-related (commercial motorcycle) accidents, the majority believe that it was because the motorcycle-hailing startups did not agree to pay the fees. The majority of the motorcycle-hailing companies had to either leave the state or use their bikes for intra-state delivery services.
Sadly, undisclosed investment in African tech startups has become a trend that has come to stay. Annual funding reports will continue to report differently until the government becomes friendlier with the tech community.
This does not mean that post-seed level startups will stop announcing their funding round to signal to potential investors and the general public pre future rounds. Whether funding rounds are disclosed or not, there is still room for investments in the African startup landscape.