Start-up boom in Africa

Investment quadrupled in the first half of 2018

Europeans generally know little about the start-up scene on the African continent. Business success stories in the press are hard to come by, with the spotlight usually turned on wars, famines and development aid. Scarcely anyone realizes that Africa has been experiencing a start-up boom since this year.

In the first half of 2018, fledgling African enterprises gained access to as much capital as in the whole of 2017. Compared to the first six months of last year, total investment actually quadrupled. According to Weetracker 118 deals with a volume of USD 168.6 million were agreed between January and June 2018.

The most popular among investors are fintechs, in other words start-ups that aim to simplify the payments and banking system in Africa. Four out of the ten biggest deals with a combined volume of USD 95 million involved projects in that area.

And the international VC Partech Ventures wants to invest EUR 100 million through a new fund, about half of it having already been secured from backers such as the European Investment Bank. It will be used to support exclusively African early-phase start-ups. Between EUR 0.5 and 5 million is to be invested in each of the start-ups.

Hamburg@work, too, is supporting this development and in May launched the cooperation agreement with the Silicon Cape Initiative from the Cape Town/Western Cape Region, the South African counterpart to Hamburg@work. Together, we plan dialogues and collaboration between businesses from North Germany and the Cape Region. The first action will be a “ learning journey ” in November 2018 that will take Hamburg businesses to Cape Town.