The general consensus is that the amount of funding available to African tech startups will decrease dramatically as a result of the COVID-19 crisis, and startups have been advised to take lesser terms if it means they are able to raise. A quick glance of the figures collated so far for Disrupt Africa’s annual African Tech Startups Funding Report suggests there is truth in this. While startups on the continent raised totals of more than US$100 million in funding in each of January and February, there was a sharp decline in investment as the crisis took hold, with less than US$30 million raised in each of March and April. There have been some signs of recovery in the last few months, but those in the know suggest funding will be harder to come by as the economic impact of COVID-19 hits investors pockets and affects attitudes towards perceived risk. Regardless, some investors will remain active throughout the crisis, and startups to have avenues to go down if they need funding. Regardless of the COVID-inspired slowdown, 2020 is still on course to beat last year’s record and become the best yet for investment into African tech startups, and more deals will be done over the course of the year. The simple fact of the matter is that plenty of investors have funds that need to be invested.
SOURCE: DISRUPT AFRICA