Global Inflation: Is Africa Truly Immune?
At the end of the lock-down, tech uprising and startup funding experienced a massive boom in Africa. Global investors looked as if ‘it’s Africa or nowhere else’. 2020 seemed like a watershed for African Tech startups as they were able to raise $701,460,565 in funding. 2021 began with a bang. By H1 of 2021, there was over $1 Billion tech funding; this was massive and meant so much to the tech sector. A closer look at Digest Africa‘s numbers reveals that funding for African startups grew steadily from January to March before dropping off in April. It picked up again in May, with investments going from $78 million in April to $208.5 million in May.
Money growth can easily become a double edged sword. It didn’t take long for the experts to come up with predictions of global inflation; not just in Africa, but globally. At the time, it was of little concern, Africa was enjoying growth and they love it (we enjoy what we love).
By 2022, the funding bang was unlike anything the region has ever experienced. Over $600 Million month-on-month raises; Flutterwave’s $250 Million series D in February; MFS Africa’s $100 Million series C and others. Everything happening around Africa’s tech space seemed massive and encouraging.
Things started to fall apart with the invasion. The experts were back, they rang that global inflation alarm and advised that the world prepare for it. However, another group expert specifically singled out Africa, assuring the region of a supposed immunity to the global inflation. Everything seemed right with their prediction until it stopped seeming right. SWVL laid off 32% of its workforce, terminated its $100 Million Zeelo acquisition and shutdown operations in Kenya and Pakistan; Egypt’s vezeeta, laid off 10% of its staff; Kuda laid off employees; Kune Food, a Kenya-based food tech startup shut down operations; even Twitter laid off 30% of its talent acquisition team. These were terrible signs.
Arguably, Africa has not been doing bad, they’ve looked better in terms of funding percentage compared to other regions. These experts might not have been totally wrong. Africa has $3.1 Billion reasons to smile after H1 2022 and that’s not to be overlooked. But there are still concerns. Is Africa really immuned? If yes, can we measure the extent of our immunity? What is triggering the current wave of lay off across the continent? 2 global phenomena including the Pandemic and the current Russo-Ukraine war had 2 different effect on tech funding in the region. Why is that?
Join us here at The Ouut on Thursday, 29 September by 8:00PM GMT+1 as we critically discuss all of these and more.
CIAO