New funding records were set over the course of 2020 as 397 technology startups raised $701.5-million. These figures have increased substantially compared with the previous year, with the number of funded startups having increased by 27.7% compared with 2019, while total funding grew by 42.7%, says startup news and research portal Disrupt Africa co-founder Tom Jackson.

He adds that, although growth has slowed a little, the numbers represent impressive growth on 2019 in spite of the Covid-19 pandemic and mean the African tech startup ecosystem continues on its positive trajectory from a funding perspective.

The company's sixth annual 'African Tech Startups Funding Report 2020', which was made available free as part of an open-sourcing initiative with its partners, also counts at least 370 active investors, marking a 42.8% year-on-year growth. This figure is in itself a 68.4% rise on the 155 investors in 2018, highlights Jackson.

Kenya, Nigeria, South Africa and Egypt remain Africa’s “big four” from a funding perspective, accounting for 77% of funded startups and 89.2% of total investment. Nigeria (85), Egypt (82) and South Africa (81) lead the way from a ventures perspective, but Kenya raised the most combined capital, with startups from the East African country raising over $190-million in funding in 2020.

"Though these markets remain clear leaders, there are signs of growing activity elsewhere on the continent, with startups backed in 24 African countries, up from 19 in 2019, 20 in 2018, and 18 in 2017," Jackson points out.

The financial technology (fintech) sector was the most attractive to investors in 2020, with more startups securing funding than any other sector and a combined total that dwarfed all others. In all, 99 fintech startups raised investment over the course of the year, representing 24.9% of the overall total, while the combined amount raised by fintech companies over the course of the year jumped 49.3% to $160-million.

However, growth in fintech investment is slowing to some extent, and other sectors have also had an impressive year - notably e-commerce and retail-tech, e-health, logistics, energy, recruitment and human resources, transport and agri-tech, Jackson notes.

The report also provides deep insight into investment trends within key startup geographies and verticals, as well as data on African startup acquisitions.

“The growth in funding seen across the continent’s tech ecosystems in 2020 is extremely strong, and all the more impressive given the circumstances of the year given Covid-19 and its many implications. As African startup funding passes the $700-million mark for the first time, and more investors pump more money into more markets than ever before, there are no signs of the sector slowing down,” says Disrupt Africa co-founder Gabriella Mulligan.