Africa Startup Ecosystem Funding Report 2020 “Moving Up”

2020 was an unprecedented year in so many respects. Disruption, a word typically associated with start-ups, is a word that aptly describes the effects of the global pandemic. Clearly, in 2020, the COVID-19 pandemic was the greatest disruptor. 

For the first time in several generations (possibly since the advent of modern travel) it became almost impossible for people to move from country to country. Borders were closed, restrictions placed on movement by respective Governments, employees asked to work from home, children were required to learn remotely in a virtual learning environment. 

The stories of disruption that occurred in 2020 will be told for many generations to come. In Africa, the pandemic’s impact was felt greatly in the economic sense. Depending on the African country, the informal economy, consisting of small and medium sized enterprises and individuals make up over 60% of economic output. The pandemic literally forced a decline in human activity and by extension pushed many Africans below the poverty line. 

Start-ups are the engine room of growth in any society, providing jobs, and solving specific problems. Venture capital has long been identified as the enabler of start-ups and although planned before the pandemic, it is in these disruptive times that we set up GetFundedAfrica. Our goal is simply to track start-up funding in Africa based on our belief that venture capital provides a runway for the growth of start-ups. In essence, “Uplifting Africa through entrepreneurship”. The pandemic has significantly highlighted the importance of start-ups in Africa’s development. 

This report is the publisher's first attempt to contribute to the discourse on funding for Africa’s problem solvers. The caption ‘moving up’ aims to capture the climb African start-ups have had to make - and will continue to make to solve problems. In developing this report, a few key issues are evident - the pandemic has increased our collective reliance on the internet; the considerable barriers to accessing the internet in Africa; the importance of Government action to create an enabling environment for start-ups to fundraise and solve societal problems in a sustainable manner.

SMEs of informal sectors make up 50%-80% of GDP in most African Countries, this report and subsequent editions will foster:

• Investment in early-stage African ventures
• The Channeling of funding to growth-stage African ventures
• Tracking of funding activity of venture capital investment for Africa
• Removal of bottlenecks to venture capital investment in Africa
• Create steady pipeline of African investor-ready businesses
• Provide resources to accelerate the growth of small & medium scale African companies 

Data and information as provided in this report also becomes an important resource as the African continent enters new territory through AfCTA (African Continental Free Trade Area). Comparisons of investment & funding activity pre & post commencement of AfCTA, will provide qualitative and quantitative insights into the impact of the new Continental Business & Economic frameworks applicable across Africa. 

In this data and technology-driven age, which many refer to as the 4th Industrial Revolution, Africa cannot continue to walk in the dark. Compared with other parts of the world Africa, will continue to get left behind, if the deficit in available data and information persists at the current level existing. 

The publisher possesses the awareness and understanding that information provides, the power it feeds to stakeholders interested in developing Africa and how this availability of information can attract investments to further develop our continent. 

The report can also assist government stakeholders in policy recommendations and decisions to develop a more reliable and suitable investment ecosystem that supports the growth and development of start-ups and SMEs.