Startups in Uganda raised above $38m (Shs140b) in 2019 from four rounds of sourcing.
This is according to the Partech Africa 2020 report, which indicates that African startups raised $2b (Shs7.3 trillion) in funding rounds last year.
“The Partech Africa report tracked 250 rounds raised by 234 start-ups compared to 164 rounds by 146 start-ups the year before, representing 52 per cent growth year-on-year growth in deal count,” the report reads in part, noting that the early stage rounds of seed and series A investments were extremely dense, demonstrating investors’ increased confidence in taking early bets in Africa.
Since they are usually alienated by financial institutions, startups look to investors to acquire capital.
The process is sequential, divided between pre-seed funding, seed funding, series A, B and growth.
Investors, according to data, continue to invest majorly in startups at growth stage, which attracted $912m from 19 rounds compared to seed funding which drew up $151m from 127 rounds.
This is because startups at seed funding seek funds to realise a business idea or concepts, which is riskier than at growth stage when companies are already operating with some level of expected success.
Nigeria, the report reads, took the bulk of the money with more than $747m raised by 16 startup followed by Kenya with $564m from 15 startups.
In Uganda, Samasource, a business-to-business application, whose main investor is Ridge Ventures, secured $14.8m (Shs54.5b) while Safeboda with main investors, Allianz X and Go Ventures, attracted an undisclosed amount of money.
The report also reveals a growing appetite from new investors having attracted 358 unique investors.
However, investors are increasingly interested in startups advancing financial inclusion which garnered 54 per cent of the investments equivalent to $1.1b in 2019.