Healthcare, EV startups steer Africa toward record funding year

African-focused startups are on track for a record fundraising year after investments surged in the first six months, according to a new report, signalling renewed investor appetite for the continent’s technology companies.

The startups raised $3.3 billion, a 73% increase compared with a year earlier, marking the strongest mid-year performance in a decade, according to a report by research firm Briter. If the pace holds, investment could reach a record this year even as the number of deals fell 10%, suggesting investors are concentrating more capital in fewer companies.

Most of the haul — $950 million — was raised by Zipline International, a California-based healthcare startup that uses drones to deliver medical supplies to hospitals and clinics including in Rwanda, the report found.

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Spiro’s $320 million raise made electric vehicles, alongside medical delivery, the biggest sectors by funding value. Financial-technology companies remained the top draw for a number of deals, garnering a quarter of the total funds raised.

Capital is still largely concentrated in fintech, agriculture, health, education, and clean tech and renewables, despite a broad appeal across more than 40 sectors, the report found.

Rwanda attracted the largest share of funds due to Zipline’s funding rounds, while Kenya, South Africa, Egypt and Nigeria accounted for 69%. While those four nations continue to dominate deal activity on the continent, half of the capital raised was by entities mainly incorporated in the US and United Arab Emirates.

Average deal sizes reached a decade high, boosted by a handful of rounds exceeding $100 million, and median funding values that also appear at a record, suggest “that ticket sizes have grown across the early to mid-stages and general rounds as well,” Briter said.

But despite that growth in funding value, “actual market returns remain limited, as fintech is the only sector showing real exit activity with six acquisitions while exits across all other sectors remain very low,” the report said.

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