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When the COVID-19 crisis hit Africa earlier this year and countries entered various degrees of lockdown, the prognosis for the continent’s early-stage startup ecosystem was not good.
Funding in particular was bound to be hit hardand fears were feared for the survival of many of the continent’s most exciting young companies. Startups were advised to raise cash by any means necessary, Show organizational agilityand adapt their businesses to mitigate the effects of COVID-19.
However, for the most part, the catastrophe that many predicted would occur in the ecosystem has been averted. The long-term damage may still be apparent, but Africa’s startups have proven their resilience in the face of the first major crisis facing space.
Of course, some startups were seriously affected, such as SafeWedding, iROKO and I co, but many others adjusted or added to their offerings to survive, or even benefit from COVID-19 and its repercussions (see here, here and here).
In fact, there were even examples of startups experiencing such strong growth as a result of pivots and partnerships caused by a pandemic that ended up being acquired!
Regarding the sector, some areas suffered a great style by COVID-19, collaborative work and key entertainment among them. Others, however, like ed-tech and e-healthBoom, seeing a sudden uptake and jumping forward, the founders could never have imagined a year ago.
From a financing perspective, the figures from Disrupt Africa show that, despite the pandemic, 2020 will be a record year from an investment perspective on the continent. Stay tuned for next month’s launch of the African Tech Startups Financing Report 2020 (It’s free!) for exact numbers, but it has proven to be an excellent year.
Investment could still be affected in 2021, as Fundraising for new funds may well have been delayed by COVID-19. But for now, at least the crisis is postponed.
From an ecosystem perspective, African technology came together to ensure that there was sufficient support for entrepreneurs facing challenges as a result of COVID-19. The ecosystem reacted with new funds and initiatives to support startups through the crisis, as well as encouraging entrepreneurs to develop solutions to mitigate the impact of the pandemic (see here, here, hereand here).
The outlook is not universally rosy. Of course, some startups were forced to close as a result of the pandemic. Others may not have been able to launch as planned. Funding, while still solid for now, may still run out a bit. The COVID-19 crisis is not over yet and there are still many obstacles to overcome.
But faced with its first big challenge, Africa’s burgeoning tech startup ecosystem refused to wither and die. Instead, he bonded, adjusted, fought, and even prospered. Startups set funding records even in a global pandemic year. Local investors and ecosystem support organizations filled vital gaps in terms of cash and other types of support. Entrepreneurs built solutions that helped fight COVID-19.
Next year can be just as challenging. But over the course of a sometimes nightmarish 2020, Africa’s startup ecosystem proved it has what it takes to survive the economic shock of COVID-19 and thrive in a post-pandemic reality.
