East Africa attracted $200 million in technology-based investments in 2017. Last year, the two countries took in a combined $52.7 million out of which
$36.7 million went to Rwanda.Apart
from the reduction in startup funding, Kenya is also seeing fewer technology
hubs being established in the country compared with its traditional competitors
South Africa and Nigeria.Rwanda and Uganda are starting to get a slice of the investment cake that has traditionally gone to Kenya after leading investor destinations in the information and communications technology (ICT) sector in sub Saharan Africa — Kenya, Nigeria and South Africa — recorded a decline in investment flows.The two
are slowly emerging as favourite destinations in Africa for investment in ICT.
Last year, the two countries took in a combined $52.7 million out of which
$36.7 million went to Rwanda.According
to new data, East Africa attracted $200 million in technology-based investments
in 2017, with Kenya accounting for $147 million. A new
report by the GSM Association (GSMA), the global lobby for mobile network
operators, titled ‘The Mobile Economy in sub-Saharan Africa’, shows that Kenya,
Nigeria and South Africa accounted for 76 per cent of total funds raised by
startups in the region.“However,
the downward trend in the combined share of investments for the three markets,
from more than 80 per cent in 2015 and 2016, shows growing investor appetite
for other markets, notably Ghana, Rwanda, Senegal and Uganda,” the report says.Apart
from the reduction in startup funding, Kenya is also seeing fewer technology
hubs being established in the country compared with its traditional competitors
South Africa and Nigeria. In the
past two years, Kenya has only seen three new tech hubs established in Nairobi,
compared with 32 in Nigeria and eight in South Africa.Uganda
has started four new hubs over the same period.Last
year, Ugandan solar start-up, SolarNow, secured a $6 million loan to help reach
more customers and expand access to pay-as-you-go solar power. The range
of tech startups funded and the growing size of deals reflect the accelerating
development of the ecosystem, with fintech and solar accounting for 21 per cent
each. E-commerce and edtech accounted for 19 per cent and 12 per cent
respectively.“This
underscores the increasing innovation and investor interest in solutions that
address the region’s starkest social challenges, such as limited access to
financial services, education and energy for large swathes of the population,” the report says. Last
year, 124 tech start-ups across Africa raised $560 million, a 53 per cent
increase from the previous year. Of this, sub-Saharan Africa accounted for
around $515 million in more than 100 deals.As at
June this year, there were 355 active tech hubs across sub-Saharan Africa, up
from 239 in 2016.Nearly
half of all the tech hubs in the region are located in four countries — Ghana,
Kenya, Nigeria and South Africa.
Tech: Rwanda and Uganda are slowly emerging as Africa’s favourite tech investment destinations
