US tech investors are waking up to the potential of Francophone Africa, while agritech, healthtech, cleantech and proptech are the continent’s rising sector stars.

Investment flows into Africa’s tech ecosystem have risen dramatically over the past few years.
In 2020, African startups raised a record $2.4bn, a figure that more than doubled in 2021 to $4.9bn ($4.65bn disclosed and about $300m undisclosed), according to data collected by Briter Bridges.
Clearly appetite for investment in African tech did not diminish throughout the pandemic. In fact, many business models were turbo-charged by Covid-19 as digital platforms quickly became an easy way to offer services in the context of widespread lockdowns and social distancing.
The demand for tech companies was reflected in the number of firms to reach the $1bn valuation mark – to become unicorns during the pandemic.
Fawry, Egypt’s largest payments platform, became Africa’s 3rd unicorn in October 2020 after its share price increased by more than 20% on the local exchange.
Nigerian payments company Flutterwave followed soon after in March 2021 when it raised $170m in a Series C round to push it to unicorn status.
The company is reportedly in talks with investors to raise a fresh round of capital, pushing its valuation up to $3bn or more ahead of a possible IPO. 
Senegal-based mobile money provider Wave added to the list in September when it raised $200m in a Series C, pushing its valuation to $1.7bn.
The deal broke several records: it was the largest Series A in Africa, the largest round by a Francophone startup, Africa’s first Francophone unicorn.
While the main winners in the last two years were fintech companies, there were signs that things were changing as we moved towards 2022.
Successes in African tech may have previously been limited to certain countries and sectors but steady growth across the board has meant that more and more companies are coming through.
Analysts expect to see Africa’s tech sector expand in both depth and breadth in 2022.
Wave is a good example of a Francophone company that has tilted the head of US investors to French-speaking Africa as a whole.
Its funding round was co-led by California heavyweights Stripe, Ribbit Capital, Sequoia Heritage and Founders Fund.
Ticket sizes in Francophone Africa have traditionally paled in comparison to Nigeria, Kenya and South Africa – countries that attract the lion’s share of US and European capital – and Egypt, which generally attracts capital from the Gulf.
With countries like Senegal, Benin, Morocco and Côte d’Ivoire starting to flex their tech muscles, large Francophone raises should be much more frequent in 2022 and towards the future.
Anglophone Africa also registered notable successes last year. In July, South African edtech Go1 raised $200m in a Series D round led by SoftBank Vision Fund, AirTree Ventures and Salesforce Ventures.
The online learning platform became Africa’s first edtech to make it to unicorn status in a sign that more African startups other than fintechs are slowly reaching the $1bn mark.
The gradual levelling up of more sectors is shown by the amount of startups to close relatively big rounds in 2021.
A total of 13 startups raised more than $100m in 2021 putting Africa on track for a record-breaking funding year.
Agritech, healthtech, cleantech and proptech look like some of the rising sectors that could make waves in 2022.
Taking proptech (property tech) – as an example, Africa’s real estate and property sector is certainly an area that needs a shakeup.
Startups range from companies providing developers with innovative digital platforms to save money and time on building sites, to furniture delivery companies.
In June 2021, Nigerian proptech startup Seso Global raised $600,000 in pre-seed funding to expand software that enables property developers, agents and governments to manage their properties on a secure blockchain database.
Launched in 2019, the startup expanded to South Africa in the same year and entered Ghana in 2020.
It currently has over 80 property developers and 7,000 property units on the platform.  
Another trend that analysts expect to see more of in 2022 is a proliferation of the types of funding available to African startups.
Most growth-funding in Africa has been shown to either come from the US or Europe (including the UK).
However, there are signs that things are starting to change.
Last year saw an increase in the amount of local funds that have stepped in to fill funding gaps, often for early-stage companies.
Hundreds of groups of local angel investors have sprung up across the continent, with a steady increase of the number of incubation hubs and accelerator labs.
Often these groups are the result of former startup founders who would like to put some capital back into the local ecosystem.
Lagos-based Future Africa, founded by Iyin Aboyeji, co-founder of Andela and the former MD of Flutterwave, is an “early stage venture fund that connects investors to mission-driven founders who are turning Africa’s most difficult challenges into global business”.
The fund has helped finance more than 30 African startups across the continent including Nigerian fintech PayHippo, Kenya’s wealth management startup Ndovu and digital KYC company Smile Identity.
The funding in Nigeria has increased to such an extent that a group called Lagos Angel Network has been created to bring together all the main small-time financiers in the startup ecosystem.
But Nigeria is certainly not an exception.
Egypt has had a wealth of incubators, accelerators and angel investors for many years.
HIMangel and CairoAngel are just two examples of angel investor groups.
The same can be said of Kenya and South Africa where successful founders are putting money back into the ecosystem.
As a result, there is likely to be ever more local money being used to fund local startups.
Finally, another interesting change in Africa’s funding scene is the gradual growth of debt as opposed to equity to fund startups.
Venture capital and private equity firms have been the mainstay of tech funding across the globe and in Africa.
But there are signs that private lending is beginning to make an appearance.
In 2021, at least 6% of disclosed funding in Africa was debt financing.
Startups taking on debt include Trade Depot, Zola Electric, Ampersand and SunCulture.
The advantage over equity financing, founders say, is that they do not have to cede large portions of their company to equity investors.
So far, the space has been used mainly by development finance organisations like the IFC, but private investors are beginning to enter the space as an alternative but growing asset class.
© 2022 African Business