If you take a look at reports tracking funding in African tech ecosystems this year, you wouldn’t be able to tell that a damaging pandemic has laid siege to economies globally.
In the first quarter of 2020, African startups raised 30% more capital year-on-year, data from research firm WeeTracker show. The top-line deals included big-ticket funding rounds like the $55 million raised by South African fintech company Jumo and the $40 million Series D round of Egyptian health-tech platform Vezeeta.
But, as the year progresses, a slowdown in funding is very likely in the cards, as the economic impact of the Covid-19 outbreak begins to manifest. Indeed, after half a decade of record-breaking fundraising, Africa’s tech ecosystems appear headed for a slump. Cape Town-based startup accelerator AfricArena estimates total funding in African startups this year could drop by as much as 40%. The report’s worst case scenario suggests the effects of the economic slowdown could last through 2021, with a full recovery only expected by 2022.