AVCA: African venture capital deal volumes over twice as much in 2020

The African Private Equity and Venture Capital Association (AVCA) has released a report showcasing the remarkable growth in venture capital deals in Africa in 2020. According to the report, the total reported venture capital deals in Africa more than doubled, rising to 319 from 140 in 2019. This surge in venture capital activity is a clear testament to the resilience and innovation of African entrepreneurs, who managed to raise a staggering $1.1 billion in funding despite the challenges posed by the COVID-19 pandemic. Abi Mustapha-Maduakor, the CEO of AVCA, highlighted the positive reaction of investors to the innovation and resilience displayed by African entrepreneurs. In 2020, the venture capital and early-stage investment space witnessed significant innovation, with many early-stage companies securing funding even during the height of the pandemic. The involvement of international investors, particularly those from North America, in African VC deals further underscores the growing interest in African startups on a global scale. One key theme that emerged from the report is the pivotal role of technology in driving venture capital investments in Africa. Data from AVCA revealed that 90% of the deals in 2020 were in technology or technology-enabled sectors, highlighting the importance of tech innovation in unlocking new market opportunities across the continent. Startups in Africa are leveraging technology to address key challenges in sectors such as mobility, logistics, and healthcare, thereby creating new market opportunities and driving disruption in traditional industries. Moreover, the report shed light on the increasing participation of female founders and CEOs in the African startup ecosystem. The data indicated that 11% of the deals in 2020 were in companies with female CEOs, while 30% of the deals were in companies with female founders. This trend reflects a positive shift towards reducing the gender gap in entrepreneurship and promoting women's economic empowerment in sub-Saharan Africa. Looking ahead to the future, Mustapha-Maduakor expressed optimism about the prospects for venture capital investments in Africa in the coming year. She anticipated a continuation of the trend towards tech-enabled deals across various sectors, including fintech, edtech, and health tech. Furthermore, she predicted that the size of deals would increase significantly, citing recent large funding rounds for companies like Chipper Cash, Flutterwave, and Treller. In conclusion, the surge in venture capital investments in Africa in 2020, despite the challenges brought about by the pandemic, signals a promising outlook for the continent's startup ecosystem. With technology driving innovation and female entrepreneurs playing an increasingly prominent role, the African venture capital landscape is poised for further growth and success in the year ahead.