Deeptech startups in Africa are experiencing rapid growth. From 2013 to 2023, they raised over 3 billion USD, transforming sectors like AI, IoT, and renewable energy. This trend is driving cutting-edge innovations and fostering economic growth across the continent.
The spectacular rise of Deeptech startups
Deeptech startups in Africa are making significant strides, raising over 3 billion USD between 2013 and 2023. This figure, accounting for 15 % of total fundraising for African startups, highlights investors’ growing interest in these innovative ventures. These start-ups are distinguished by their advanced technologies and disruptive innovations, particularly in artificial intelligence (AI), the Internet of Things (IoT), solar energy, and robotics.
Investments and their distribution
Funding for Deeptech companies in Africa has skyrocketed since 2016. In 2015, fundraising was 86 million USD, but by the first half of 2023, it had surged to 1.2 billion USD. This period saw major deals, such as Zipline’s 330 million USD raise for its drone delivery services and BioNTech’s 440 million USD acquisition of InstaDeep, a Tunisian AI startup.
Types of financing and their impact
The Briter Bridges report reveals that 67 % of funding for African Deeptechs comes from equity, 18 % from debt, and 11 % from grants. Most transactions focus on the early stages of startup development, with incubation and acceleration phases making up 33 % of deals. Despite this progress, a financing gap persists at all stages, especially during the advanced development phase.
Leading technologies and their applications
The flagship technologies of Deeptech startups in Africa are AI and IoT, attracting the majority of funding. Success stories include Instadeep, Sama, Instabug, and Zipline. Additionally, blockchain and 3D printing are starting to gain traction. Innovations are evenly distributed among hardware solutions (36 %), mixed hardware/software solutions (36 %), and pure software solutions (28 %).
Fields of application for Deeptech innovations
African Deeptech companies are creating products across various sectors, with renewable energies and clean technologies leading at 20 % of innovations. The health and biotech sectors follow at 17 %, and agriculture at 8.5 %. These companies address local and global challenges, providing technological solutions tailored to the continent’s needs.
Analysis of geographical distribution
The distribution of Deeptech companies varies significantly across Africa. South Africa leads with over 90 companies, supported by a strong innovation ecosystem, a robust university system, and government backing for R&D. Egypt and Tunisia follow, with 45 and 40 startups respectively, thanks to their solid education systems and vibrant local ecosystems. Kenya and Nigeria are also showing promise, particularly with the rise of cleantech and renewable energy firms.
Profiles of Deeptech startup founders
Deeptech startup founders in Africa are highly educated, with nearly 90 % of these ventures led by men and only 13.5 % including at least one woman on their founding team. Founders have strong academic backgrounds: 35 % hold a Master’s degree, 30 % a Bachelor’s degree, 16 % an MBA, and 11 % a PhD.
Deeptech startups in Africa significantly contribute to the continent’s technological transformation. Having raised over 3 billion USD in a decade, they demonstrate their potential to innovate and tackle complex problems with advanced technologies. With increased support from investors and governments, these companies could drive a prosperous future for Africa, fostering economic growth and technological advancement.
