This archive report was first published on 30 June 2020.
Published on June 30, 2020, a report by the African Private Equity and Venture Capital Association Ltd (AVCA) highlighted Kenya's exceptional growth prospects in the start-up and small business sector over the past five years (2014-2019).
According to the report, South Africa led the way with 21% of the total early-stage investments, followed closely by Kenya with 18% and Nigeria with 14%.
Kenya's start-up scene has seen significant growth, with a focus on financial technology, utilities, and logistics. The country's entrepreneurs have been successful in securing funding from well-off investors, investment banks, and other financial institutions.
By value, deals in consumer discretionary (28%), financials (23%), and industrials (18%) attracted the largest share. The utilities sector was particularly popular among early-stage deals, with investors supporting companies that provide alternative power solutions.
Financial technology (fintech) firms dominate the African start-up scene, but afro-entrepreneurship has also grown within the utilities, logistics, transportation, e-commerce, healthcare, and agribusiness sectors.
Interestingly, nearly one-third (32%) of the total number of early-stage investments reported in Africa during the period were seed-stage deals, which is initial equity funding for start-ups.
Series A and Series B transactions together accounted for 29% of the total volume and 38% of the total value of early-stage deals.
However, 65% of the total number of VC deals reported were below $5 million, while 25% were between $5 million and $20 million, and just 3% were above $50 million in size.
Corporate venture firms from North America played a key role in bridging funding gaps, accounting for 37% of the total number of corporate venture firms that participated in VC deals in Africa from 2014 to 2019.
Foreign investors have been attracted by new opportunities and markets, with North American investors representing 42% of the number of investors that participated in VC on the continent between 2014 and 2019, followed by European-based investors at 23%.
