Partech Africa’s Annual Report sits squarely on the fence. While it shows that the COVID-19 pandemic has impacted investment in African startups, it paradoxically revealed that the latter have more than resisted the shock.
By Talel de Sinta
Crisis is sometimes synonymous with good business. Some visionaries know how to seize the opportunity of crises to make investments that could yield high return later. At least that is what we can conclude from the annual report of Partech Africa.
1.43 billion in equity capital for 347 African startups
According to the “Africa Technology Venture Capital Report 2020”, the African Tech ecosystem is still inexorably accelerating, with 359 equity rounds (+44% YoY) to a total VC funding of US$ 1.43B for 347 startup -29% YoY as the COVID-19 context slashes average growth ticket size by 60%.
Despite the coronavirus pandemic, the report points out that the venture capital market has been the fastest growing, with activity increasing by almost half, attracting more single investors. Some of them are investing more frequently and betting on how technology is transforming the African continent and creating value.
Yet, the report pointed, on the other hand, to uncertainty in macro trends and freezing of African’s frenetic cities.
In some respects, a slowdown was also noted as Investors’ processes were disrupted, as founders delayed rounds for better times, as betting big tickets became harder.
« We do look forward to seeing these turn out to be the first chapters in a story of exits that could be, as everything has been in this ecosystem so far, far beyond our expectations. »
But a few months into the crisis, it’s become clear that not only is the ecosystem resilient, but it is even getting a boost from an accelerated digitalization of some key economic sectors.
Indeed, the authors of the report state « we saw a trio of high profile exits (Paystack, DPO, Sendwave) begin to provide positive responses to questions of value creation and outcome for founders and investors. »
They add: « We do look forward to seeing these turn out to be the first chapters in a story of exits that could be, as everything has been in this ecosystem so far, far beyond our expectations. »
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