Africa is increasingly establishing itself as a hotbed of tech innovation, and 2016 was packed with further progress.
From Cairo to Cape Town, from major players to the smallest startups, African tech is developing at a startling pace. But what were the major developments on the tech scene over the course of 2016?
According to research from Disrupt Africa, startups on the continent raised US$186 million in funding in 2015, a number that is likely to rise in 2016.
Increasingly, investors are seeing Africa as an opportunity rather than a risk, and the tech space in particular is proving itself able to withstand the general slowdown.
Africa Internet Group (AIG), which owns the likes of Jumia and Jovago, gained most of the attention, raising US$245 million from the likes of Goldman Sachs and MTN to take its valuation to over US$1 billion, but the story goes much further.
2016 will likely prove to be a record year for the number of startups that raised funding, from countries as diverse as South Africa, Kenya, Nigeria, Morocco, Egypt and Somalia.
Of those startups that raised funding, the biggest amount by far is fintech startups. Fintech has become the hottest ticket in town.
It is easy to see why. Around 80 per cent of Africa’s adult population lacks access to financial services, and companies that find a way of providing them have a huge opportunity to make significant profits.
Tech is playing a huge part in this. The likes of Zoona and Aella Credit are finding innovative ways of providing access to things like savings and remittances, and have thus proven very attractive to investors.
The support for African fintech goes beyond just funding. Hubs and accelerators are springing up all over the continent to support the movement. AlphaCode is backing fintech startups in South Africa, and Nest is helping them out in Kenya. Barclays launched South African and Egyptian fintech programmes in 2016. The future is bright.
Uber has had things its own way in Africa for a while now, and made further progress in 2016 with launches in Tanzania, Ghana and Uganda.
Yet it looks set to face a greater challenge than ever before over the next couple of years, as well-funded competitors enter the market. Craft Silicon launched Little in Kenya to compete with Uber, and will also take the service to Nigeria.
In South Africa, Zebra Cabs raised US$21.5 million in funding to provide the first challenge to Uber since Zapacab and Snappcab exited the market.
Uber is not resting on its laurels, and has launched cash payments in a number of countries and a food delivery service in South Africa. But it is facing growing competition.
Uber is not the only major global tech firm taking Africa very seriously indeed. A host of other multinationals are stepping up their activities on the continent.
Facebook is one of the, with Mark Zuckerberg’s foundation having invested in coding school Andela, while the company is also running various initiatives aimed at increasing internet access on the continent.
2016 also saw the launch of Netflix and eBay in Africa, while the likes of PayPal, Google and Airbnb launched new services.
A number of companies have also started opening innovation and research labs in order to tap into African talent, notably IBM, SAP and Thomson Reuters. Expect to see such activity further scaled in 2017.
The likes of Google and Facebook are not the only Silicon Valley companies becoming increasingly keen on Africa. Global accelerator are also active.
The likes of Y Combinator and 500 Startups are sending more and more executives to African events and to meet African startups, and this has seen an inevitable increase in companies attending programmes in the US and raising funding.
The likes of Nigeria’s Podozi, Kenya’s Bamba Group and Egypt’s Instabug have all taken part in such programmes this year, demonstrating growing hunger to get African companies involved.
Tom Jackson is a tech and business journalist in Africa, and co-founder of startups news portal Disrupt Africa. He splits his time between various African cities covering the latest development in the continent’s exciting economic story.
