Our website use cookies to improve and personalize your experience and to display advertisements (if any). Our website may also include cookies from third parties like Google Adsense, Google Analytics, and Youtube. By using the website, you consent to the use of cookies.

Africa’s e-restaurants and autotech startups whet investor appetite


INVESTMENTS into Africa’s digital restaurants and auto-tech startups grew faster than all other sectors in 2022, highlighting their growing appeal.

Entrepreneurs behind these startups enjoyed bumper funding during the period – albeit from a low base – and funding for the sector has added to a wider challenge to fintech’s recent dominance of Africa’s startup funding environment, the latest Disrupt Africa tech startup funding report shows.

“While fintech easily retains its lead as the most popular space, the growth is smaller than in other verticals; and the narrowing of margins shows other sectors are starting to attract larger amounts of funding, and contribute more to the overall pot, as well,” said the report.

Funding for restaurant-tech startups grew by over 29,000%, from US$180,000 raised by just two startups to US$52.9 million by eight firms.

This funding is now equivalent to 1.5 percent of the total funds raised by all startups in 2022. The sector’s average round size also leapt to US$6.6 million from just US$90,000.

Auto-tech firms on the other hand, saw their funding jump by 434.8 % to US$18 million by nine ventures, from US$3.4 million in 2021 raised by four startups. These startups now account for 0.5 percent of total funding raised in 2022, with the average size of funding rounds more than doubling from US$843 million to US$2 million.

While total funds to fintechs rose by 39.3 % to US$1.4 billion compared to 2021 figures, its proportion of overall startup funding dropped slightly to 43.4% in 2022 from 48.3% the previous year.

“With funding snowballing more quickly than fintech in areas such as entertainment, marketing, transport, recruitment and agri-tech, as well as e-commerce and health, we can expect to see fintech’s lead further cut in the coming years,” said the report .

Fundraising into transport startups more than doubled to US$220.9 million, largely driven by a US$150 million round raised by Algerian startup, Yassir.

Transport ventures accounted for 6.6 percent of total raised and ranked third for total secured investment. The average round size also doubled to US$10 million, up from US$5 million in 2021.

A US$711.40 million raised by ride-hailing start-up, Bolt in 2022 and subsequently pushing the Uber rival’s valuation to US $8.38 billion also highlights the growing attractiveness of startups in auto-tech and transport sectors.

Earlier in February 2023, Bolt announced it would invest US$532 million to expand mobility and delivery services in six African countries – Kenya, Ghana, Nigeria, Uganda, Tanzania and Tunisia.

“We will continue to grow our presence in Africa through this new investment which offers massive potential to create new jobs and income opportunities for drivers and couriers,” said Bolt Founder and Chief Executive Officer, Markus Villig.

Africa’s entertainment startups also made significant fundraising strides following a 416% rise to US$59.82 million- accounting for 1.8 % of total funds raised last year.

A booming smartphone gaming industry saw the sector record big rounds for South Africa’s Carry1st (US$20 million Series A extension round) and Nigeria’s Scorefam (US$25 million).

“But there were seven rounds worth US$1 million or more, suggesting funding is on the rise across the board rather than focused on a couple of leading (entertainment) ventures,” said the Disrupt Africa analysis.

However, only the e-commerce and retail tech sectors come anywhere close to rivalling the giant fintech sector in terms of the number of startups and volume of funds.

The sector’s fundraising, which has enjoyed a four-year boom, recorded annual growth of 70.7% to US $556.7 million from 74 startups and accounts for 16.7 percent of all funds raised by African startups in 2022.

By The African Mirror