Startups are businesses that are in their early stages of operation. They are often referred to as disruptors because they take an unconventional approach to fixing flaws in existing products and services or developing new ones entirely. Startups also have a high failure rate, with only a few ultimately succeeding.
According to Disrupt Africa, Africa is home to at least 774 startups. In 2020, these startups attracted funding worth US$701,460,565, an increase of 42.7% from the US$491,623,400 raised in 2019. Five years ago, the story was different since African startups were only able to raise a total of US$185,785,500.
We cannot talk about the growth of startups on the continent without highlighting exceptional startups that have received innovative financing, allowing them to achieve unicorn status. Although the term is debatable, in simple terms it is a term used to describe companies that reach a billion-dollar valuation in less than ten years.
Collins Onuegbu, founder of Signal Alliance, a Nigerian IT services provider, objects to the use of the term “unicorn” for African startups. He argues that it should be replaced by a term more appropriate to our reality, such as Gazelle, an elegant and stable creature adapted to the difficult terrains of Africa. He says our financial system is in its infancy in most parts of the continent and is different from that of a developed country like the United States. Onuegbu asks whether Africa should, like the rest of the world, be led by America in the search for our Unicorns or define our Gazelles and search for them across Africa?
For the sake of this article, we’ll settle for the status quo and let the U.S. benchmark controversy be a topic for another day. African startups with unicorn status on this list are mainly active in the fintech sector.
Jumia, nicknamed “the Amazon of Africa”, is an online marketplace for electronics and fashion items, among others, which targets several African countries. It was founded in 2012 by Jérémy Hodara and Sacha Pavoine. Jumia also operates Jumia Logistics, a logistics service that enables shipping and delivery of packages from sellers to consumers, and Jumia Pay, a payment service that facilitates transactions between active participants in selected markets.
After announcing $435 million in Series C funding in 2016, the e-commerce giant became the first unicorn in the history of the African startup ecosystem. Also, in April 2019, the company became the first African unicorn to be listed on the New York Stock Exchange (NYSE).
At the time, the company was valued at $3 billion and had a presence in 14 African countries. Following fraud allegations in 2019, the company hit a downturn and began operating in 11 countries, with a valuation of $250 million. But according to TechCrunch, the company’s stock price, which traded between $2 and $4 in 2020, is now trading between $40 and $50. The company had 6.8 million active customers in the final quarter of 2020, up from 6.1 million in the corresponding quarter of the previous year, and it partnered with more than 110,000 active sellers.
Jumia, which started with an initial staff of 10 people in Nigeria, currently has more than 5,000 employees on the continent. Some of its early employees grew to take leadership positions in their respective fields or build their businesses. Some of them are Tunde Kehinde and Ercin Eksin of Africa Courier Express (ACE) and Lidya, Onyeka Akumah of FarmCrowdy, Omobolanle Shodipo of the African Union and music superstar Adekunle Gold.
Flutterwave is a leading fintech company that provides payments infrastructure to global merchants and payment service providers across the continent. Olugbenga Agboola and a team of African finance and technology veterans from Standard Bank, PayPal and Google Wallet, among others, founded it in 2016 as a payments company based in Nigeria and the United States. Over time, it has become one of the fastest growing payment platforms in the world, as evidenced by its $1 billion valuation as of March 2021.
The company raised $20 million in Series A funding in 2018 and $35 million in Series B funding in 2019. Its most recent funding, Series C, closed at $170 million, bringing the company’s total funding to $225 million. As a result, it is one of the rare African startups to have received funding of more than $200 million. At the time of its Series B funding, the company had processed 107 million transactions worth $5.4 billion. Currently, these numbers stand at over 140 million transactions worth over $9 billion.
More than 290,000 businesses use the Barter by Flutterwave platform, which accepts payments in 150 currencies and multiple payment methods such as local and international cards, mobile wallets and bank transfers. According to Olugbenga Agboola, the company operates in 20 African countries and has infrastructure in over 33 African countries.
Wave is an offshoot of Sendwave founded by Durbin Drew (CEO) and Lincoln Quirk. Sendwave was founded in 2014 by the duo to avoid the hassle of international money transfers and high transaction costs. Sendwave was officially acquired by World Remit this year, but the duo had already started developing Wave in 2016. When Wave launched in Senegal, it served Africa’s underbanked population and reduced the costs of money transactions mobile.
Wave is a peer-to-peer money transfer service that works with mobile money accounts rather than bank accounts. Customers can visit physical agent locations to make deposits and withdrawals without paying fees or use a smartphone app with a flat 1% discount on money sent.
The company announced a $200 million Series A funding round in September. This makes the company the first startup in French-speaking Africa to achieve this milestone and the third to do so in 2021. This is the largest Series A investment ever in the region and elevates the company to exclusive of unicorns, with an amount of 1.7 billion dollars. assessment.
Although Senegal is its largest market, Wave also launched in Ivory Coast in April and plans to expand to Uganda, Mali and other African markets. Since its launch in Senegal in 2017, the fintech application has recorded five million downloads, making it the leading mobile money player in Senegal.
Zhou Yahui founded Opay, a mobile payment platform, in 2018. It is associated with Opera, its parent company, which is well-known as a search engine and internet browser. Opay has branched out into a few other companies, including ORide, a now-defunct ride-sharing service, OBus, a bus booking platform (also now defunct), OExpress, a logistics delivery service, OTrade, a of B2B e-commerce, and OFood, a food delivery service, among others.
In August, the company crossed the $1 billion mark to become a unicorn startup. Earlier in 2019, the company announced two funding rounds: $50 million in June and a $120 million Series B in November. The latest $400 million funding round, which gave it unicorn status, exceeded the company’s expected valuation of $1.5 billion.
Opay has over 300 million agents and over five million users across Nigeria. According to the company, its monthly trading volume now exceeds $3 billion. Last year, OPay expanded to Egypt, an entry point into the Middle East market.
Andela is a Nigerian startup that connects and helps businesses build remote engineering teams by giving them access to the world’s best software engineers. Jeremy Johnson founded the company, which began operations in 2014. Following its latest Series E funding of $200 million, the company is now worth $1.5 million. Andela has raised a total of $381 million since its inception in Lagos. Its most recent valuation of $700 million came when the company raised a $100 million Series D round in 2019.
With a 96 percent successful placement rate, Andela has grown from seven African countries and 37 at the start of its global expansion to having engineers in more than 80 countries and six continents. The company has more than 300 employees and most of Andela’s technology comes from Africa. In 2019, the company’s annual revenue was $50 million, and it is estimated to be much higher now.
Written by Adekunle Agbetiloye