If there’s one thing we know about trends, it is that they come and go. But sometimes, trends adapt and become the new normal. A good example is the fintech sector in Africa. In 2012, fintech was just starting to gain traction in Africa, between 2014 and 2019, Nigeria’s fintech sector alone raised more than $600 million in funding. Fast forward to 2022, the tech sector is still the most prominent and has constantly been the most funded in Africa’s tech ecosystem. While fintech is still Africa’s major spot for investment, the tech scene is rapidly expanding, with innovative ventures and promising growth in several sectors. While some African tech sectors are receiving significant attention, other tech areas are quietly attracting investment promising growth potential.
According to Disrupt Africa’s 2022 report on tech disruption in Africa, 633 startups raised over $3 million representing a 1,694 percent increase in both the number of tech startups and the amount of funding. About 11 non-fintech startups- asides from the fintech’s nearest competitors- raised the majority of the capital in 2022, and have had faster growth rates in the last seven years. One such sector is restaurant tech, which although is developing at a low base, remains the fastest-growing investment spot. The sector’s investment grew by 29,235% in the last year. Investments in these sectors are been fueled by circumstances and tech trends with an effect on the entire continent or sometimes a particular sector.
A good example is the media and entertainment tech sector. Africa’s entertainment scene has gained an audience on the global stage, and as such, there is an increasing demand for entertainment, which in turn is fueling a growing pool of talent. Hence, companies and startups in this space are developing innovative technologies to improve access to media and entertainment content- from online streaming platforms to virtual reality and augmented reality solutions. According to Disrupt Africa’s report, African entertainment startups had their best funding year on record last year, even though most of them still struggle to find business models that work on the continent. From 2020 up until the latest report, the sector has raised over $13.9 million, nearly 116 times what it secured in 2018.
The real estate tech or property tech sector in Africa is also steadily gaining attention. And for good reason. With a population of just over 1.4 billion, growing at 2.7% a year and set to double by 2050, the demand for housing and commercial real estate in Africa is increasing. There is a growing awareness of the need to develop innovative solutions to address challenges, such as the lack of access to property information, and financing, the shortage of affordable housing, and the inefficiency of the traditional property market. Similarly, the logistics and transportation sector continues to experience significant growth in Africa, thanks to a growing middle class and increasing demand for convenient and accessible transportation options.
On a quieter rate, sectors like tourism tech are emerging. According to a report from Quartz, Africa is experiencing a rebounding tourism industry thanks to the full resumption of operations on international routes by African airlines and return of Chinese tourist. Companies in this space are developing innovative technologies to improve access to travel and tourism services and address challenges such as the shortage of affordable travel options, travel booking, and tour management services to hospitality solutions. The bottom line is that there are tons of exciting opportunities for innovation and impact in these under-the-radar tech sectors, and investors are taking notes.