Summary
Highlights
Africa's tech ecosystem is thriving, with several unicorns emerging and venture activity slowly recovering to a more stable rhythm. Investor appetite is growing with a cautious approach, and while Southern Africa leads in capital raised, West Africa is the busiest hub for deals, and East Africa is seeing significant shifts. Rwanda, in particular, is positioned as Africa's testbed for technology.
Zipline, a drone logistics leader that started in Rwanda, launched Africa's first aerial delivery network for blood and medicine. Norrsken, a startup hub in Kigali, supports 300 firms and manages a $208 million investment vehicle, backing high-growth African startups like Fixa (HR fintech) and Eden Care (insurtech). Rwanda's unique approach to regulation and willingness to learn with startups has attracted significant foreign private inflows, growing from 12% to 18% of the country's total. This favorable policy extends to adjacent sectors, like electric vehicles, with startups like Ampersand and Spiro leading the e-mobility charge.
Deepali Nangia of Speedinvest discusses interesting models in lending, where AI is used for better underwriting and fraud prevention, and personalized payment plans, leading to financial inclusion. The rise of stablecoins is also helping African freelancers and exporters mitigate currency volatility. While growth capital is harder to get, innovation around securitization is unlocking more equity and debt. Exits, primarily M&A, are gaining traction, with international players acquiring African companies like Paystack and BioNTech. Public markets in South Africa (Optasia) and Morocco are also providing exit opportunities, and investors are actively building relationships with corporate LPs and international investors to facilitate more exits.
Fintech remains central to Africa's digital revolution, driven by mobile adoption and demand for financial inclusion. McKinsey projects fintech revenue in Africa to reach $47 billion by 2028. Optasia, an AI-powered fintech, successfully debuted on the Johannesburg Stock Exchange. CEO Salvador Anglada highlights their expansion plans to cover 80-85% of African countries, as well as Asia, aiming to double their 130 million active customers in 3-5 years, providing crucial credit access. Flutterwave, Africa's most valuable unicorn, operating in over 30 countries and processing millions of payments, is focused on profitability and an eventual IPO in 2026. CEO Olugbenga Agboola stresses that payment infrastructure is leading to further growth in commerce and logistics, anticipating more unicorns from Africa in the next decade.
Fast, affordable internet access remains a challenge in South Africa's townships. Fibertime, a South African startup, is tackling this by providing high-speed internet at an affordable price in Kayamandi. Their aerial fiber distribution network connects homes at just five rand (30 US cents) a day for 100 Mbps uncapped internet, making it significantly cheaper than competitors. With a daily growth of 1,000 homes, Fibertime aims to connect 1.82 million homes by 2027 and list on the Johannesburg Stock Exchange, with support from the Finnish government and Nokia. While currently focused on South Africa, they have expansion plans for Latin America, Asia, and other African markets, aiming to boost employment and income.
Hassanein Hiridjee, founder of Axian Group (major shareholder in Jumia), emphasizes that telecommunications is the backbone of AI in Africa. He highlights three miles: submarine cables bringing data to the continent (first mile), bringing connectivity to data centers (big mile), and distributing via fiber/GSM (last mile). Telecom players have been instrumental in building data centers. Axian Group is separating its data centers from its telecom business to make them carrier-neutral, growing them with renewable energy, and opening them to other users. Hiridjee welcomes international investment and partnerships, viewing them as crucial for skills, new investments, and accelerating data center and AI business models, citing partnerships with hyperscalers and MasterCard as examples of collaborative growth.