In H1 2022, Francophone African startups raised ~$59.4 million, it is less compared to the funds raised by Anglophone African startups—only Nigeria raised ~$754.6 million within the same period.
Experts argue that the language barrier between English-speaking investors and Francophone entrepreneurs is a reason behind the low investments.
The funding gap might as well be a result of the significantly strict regulatory landscape in francophone Africa, the regulations have created an apathy towards the region by foreign investors, who prefer to invest in Anglophone markets.
"Francophone Africa inherited the French system’s bureaucracy, heavy administration, and governance style; as such, processes and regulations can be stricter than in other regions," Coura Sene, Wave’s General Manager for the eight French-speaking countries in the West African Economic and Monetary Union (WAEMU) said.
These countries raised the lowest VC funding in H1 2022
According to BD Funding Tracker, African tech startups jointly raised over $2.5 billion between January and June 2022. Most of these funds were raised by startups based in Nigeria, Egypt, South Africa and Kenya.
The aforementioned countries are undeniably the "big four" when it comes to startup funding on the continent. In 2021, a total of 307 startups from the "big four" countries raised funding accounting for 89.2% of the funds raised in the continent that year.
Although the spotlight is more on the big four, innovations in other countries are also receiving funding. Based on data available on the BD Funding Tracker, Benin, Zambia, Zimbabwe, Uganda, Rwanda, Congo, Côte d’Ivoire, Tanzania, Madagascar and Cameroon raised the least funds in H1 2022.
The startup ecosystem of Cotonou, the Capital City of Benin is ranked at number 1182 globally, this shows a negative momentum decreasing 187 spots since 2021. Fedapay, a Beninese fintech raised an undisclosed seed from Benin Business Angel Network (BBAN) in January, this is the only disclosed fund raised by a Benin-based startup in H1 2022.
Like Benin, only one funding was disclosed in Cameroon in H1 2022. Waspito, a healthtech startup raised a $2.7m seed from Launch Africa Ventures and other investors to grow its user base in its home market and also expand to Côte d’Ivoire.
The Cameroon startup ecosystem is ranked at number 116 globally, it has lost five spots in the ranking since 2021. Cameroon also ranks number 2 for startups in Central Africa.
According to a report by GSMA [pdf], there is a micro early-stage ($1,000 to $20,000) investment gap in Cameroon's tech ecosystem, which creates an opportunity in the market for donors and development finance institutions (DFIs) to fund early-stage tech ideas. The report also stated that components of the tech ecosystem operate largely in isolation and there is a lack of networking, mentoring and shared learning opportunities.
In H1 2022, only Union54's $12 million seed extension round was recorded in the Zambia startup ecosystem. The fintech startup raised the extension in April 2022, six months after Union54 announced a seed round of $3 million—both rounds were led by Tiger Global.
The Zambia startup ecosystem is ranked at number 109 globally, moving one spot ahead of its position in 2021, per StarupBlink ranking. Currently, African tech leaders—including Flutterwave, Chipper Cash—are pushing to transform Zambia into Africa's low-tax startup hub.
Zambia is one of Africa’s most stable countries with consistently peaceful transitions of power with a population of over 17 million people. The Zambian economy is predominantly led by the mining industry, and the country is Africa's second-largest producer of copper with a GDP of $19 billion.
The Mali startup ecosystem would have almost not raised any funds in H1 2022, but OKO, an insurtech startup raised a $500,000 seed extension—becoming the only Mali-based startup to raise in the first half of the year.
In 2019, Mali announced its plan to pass a Startup Bill into law to assist the development of the local innovation ecosystem, however, a coup removed the government in August 2020 disrupting the initial plan. Although Afrikan Heroes reported in 2021 that Mali's promise of delivering a Startup Act to its startup ecosystem is not dead yet, the Malian government is yet to make any public update on the process.
FlexID received undisclosed funding from Algorand to build a blockchain-based identity system for those excluded from the banking system due to their lack of identity documents. This is the only disclosed venture capital that was pumped in Zimbwabwe in H1 2022.
The Zimbabwe Startup Ecosystem is ranked at number 118 globally and shows a negative momentum of six spots since 2021. Zimbabwe also ranks number four for startups in Southern Africa.
"The ecosystem is very young and is lacking a single identity, that you find in Silicon Valley, Nigeria or East Africa. It is not very well documented which also means many startups doing wonderful things go unnoticed and often fail to go far because of that," Nyasha Chasakara, a Zimbabwean tech entrepreneur said.
In Rwanda, only Hence Technologies secured funding in H1 2022. The Kigali- and London-based startup that uses data and AI to match companies with external legal service providers is set to scale its precision-matching engine raised a $1.8 million seed in March 2022.
Per Startup Blink, the Rwanda startup ecosystem is an emerging innovation hub, ranked at number 84 globally, and shows a negative momentum of 15 spots since 2021. Rwanda also ranks number 3 for startups in Eastern Africa.
Related Article: Five things to know before relocating to Rwanda
Côte d’Ivoirean startups jointly raised $8.8 million in H1 2022. ANKA's $6.2 million pre-Series A fund was the largest amount raised by a startup in the region in the duration under review. Another startup in the country, Susu raised €2 million ($2.2 million*) pre-seed in March.
The performance of the digital economy has led Côte d’Ivoire to be ranked among the most technologically competitive countries in Africa. According to the World Economic Forum’s “Global Competitiveness Report 2019”, Côte d’Ivoire maintained its rank of 104th out of 140 countries in terms of ICT adoption.
JABU's $3.2 million seed and $15 million Series A in January and May were the only announced funding in Namibia in H1 2022, bringing the total amount raised in the country from January to June to $18.2 million.
Namibia moved up by eight spots in the Global Startup Ecosystem Index 2022 according to the Startup Ecosystem Report, the Southern African now ranks 91 globally.
Congolese startups—Jambo and Koa—jointly raised $41 million in H1 2022. This is higher than the $1 million that was secured from investment funds and other VCs in 2021 in the country. Like JABU, Jambo, a Web3 super app secured a $7.5million seed and $30 million Series A in the first half of 2022.
Two Ugandan startups—Asaak and Rocket Health—jointly raised $35 million in H1 2022, these are the only disclosed investments in the East African country within the time in review, per BD Africa Funding Tracker. Aside from these two, Numidia, a Ugandan fintech participated in Y Combinator's 2022 Winter batch.
The Uganda Startup Ecosystem is ranked at number 101 globally, this shows a negative momentum dropping four spots since 2021. Uganda also ranks number 5 for startups in Eastern Africa.
Most of the aforementioned investments were pumped into startups operating in fintech, insurtech, healthtech and Web3 & Crypto. Aside from these countries, Ghanaian startups jointly raised $120.9 million in H1 2022. Meanwhile, Moroccan startups raised over $7 million and Senegalese startups raised $6.4 million.