The demand for sustainable electricity around the African continent seems to have had a positive effect on startups in the solar energy sector, as it received the most funding out of 10 sectors researched in a recent report.
Disrupt Africa’s African Tech Startups Funding Report reveals that R30.7 billion was invested in 125 startups across 10 sectors on the continent last year.
Of this amount, 32.9% went to the solar sector; the financial tech sector was the second-most funded and received 29.6% of the total funds allocated.
“Solar ended up the most funded due to huge rounds raised by Tanzania’s Off Grid Electric and Kenya’s M-KOPA Solar, rounds that dwarfed most others. But solar is considered a huge opportunity by investors. Load shedding and issues such as Nigeria’s diesel shortage earlier last year grab the public’s attention, but the fact of the matter is Africa has a power shortage,”Tom Jackson, co-founder of Disrupt Africa, told htxt.africa.
“Solar and other off grid solutions are the way to go, given how poor and inefficient grid infrastructure is. Investors have clocked this, and we expect more big solar deals in 2016,” he added.
South Africa, Nigeria, and Kenya proved again to be the top startup destinations with 36%of startups researched being based in South Africa, 24% in Nigeria and 14.% in Kenya.
The three countries were also the top most-funded countries: R9 billion was invested in South Africa, R8.18 in Nigeria and R7.8 billion in Kenya.
“These are impressive numbers, showing real growth in the amount of funding available to African tech startups, but in reality they are merely the tip of the iceberg,” Jackson said in a statement.“There will have been many funding rounds across the continent that have taken place quietly. But in terms of demonstrating the development of the ecosystem, these figures are an excellent starting point. We expect to see further growth in 2016.”
You can see the full details on all the countries, sectors and startups researched in the Disrupt Africa’s African Tech Startups Funding Report.[Image – CC 2.0 by Rocío Lara]