The startup ecosystem in Africa has so far been dominated by Nigeria, Kenya, South Africa and Egypt (“the Big 4”), countries that still receive the bulk of venture capital and other forms of investment.
However, the situation seems to be slowly changing as notable startups begin to take off from other countries on the continent and investors look for new opportunities to diversify their risk beyond the Big 4.
Uganda is one of the countries causing ripples in high-profile technology programs such as the Y Combinator accelerator and Google’s $50 million Africa investment fund, which launched last October and targets early- and growth-stage start-ups.
In December 2021, SafeBoda, Uganda’s multi-service and digital payment technology platform, became the first startup on the continent to receive an investment from the Google fund. It has now been brought to the table of nobility by fintech Numida, which was the first startup in the country to come to YC (W22). Numida joins 14 other startups from Africa that took the Winter batch from the accelerator, an opportunity that puts them on the radar of Silicon Valley investors.
“Being able to connect with people who have successfully built and succeeded in building very large companies, and receiving their feedback, especially at our stage… that is very relevant to us,” said Numida co- founder and CEO Mina Shahid as she spoke to TechCrunch about joining the YC.
Numida’s star has been shining since last year, when it raised $2.3 million in seed funding for the first time. The startup offers risk-based credit to micro-enterprises in Uganda and has grown 30% month-over-month since its launch, according to Shahid, due to the demand for quick business loans.
Numida’s credit line is $3,500, but the amount provided to small businesses and the interest paid is based on the risk profile of the borrowers. The fintech plans to enter Ghana later this year.
Aside from these two eminent announcements, the Ugandan tech scene continues to thrive with startups emerging in the mobility, e-commerce, e-health, cleantech and fintech spaces – attracting all kinds of investors. According to the Partech report, the country was among the top 15 in Africa to receive significant equity funding last year.
In December, Tugende, an asset lender with operations in Kenya, secured a $17 million debt investment after closing a $3.6 million in a Series A renewal round earlier in the year from notable investors such as Mobility 54 Investment SAS, a subsidiary of Toyota Tsusho Corporation. and CFAO group. Founded in 2012 by Michael Wilkerson, Tugende’s core product is a lease-to-own plan for motorcycle taxis – a popular mode of transport in Uganda. It also provides loans to help people acquire other income-generating assets such as boats, cars and shop equipment.
As late as 2021, Mobility 54 joined DOB Equity and InfraCo Africa to invest $3.4 million in Zembo, an electric motorcycle startup, which also operates battery charging and exchange stations in Uganda’s capital, Kampala – a company that looks promising as the use of electric motorcycles in the country.
Another startup, Ensibuuko, raised $1 million in seed funding from FCA Investments last year. Founded by Gerald Otum in 2014, the startup’s proprietary digital infrastructure helps organizations such as credit unions and savings groups to automate their operations.
As it stands, the biggest beneficiaries of this funding surge are in mobility and fintechs. In mobility technology, the focus has been on the motorcycle taxi category, a popular mode of transport in the East African country.
In Uganda’s capital Kampala alone, it is estimated that there are more than 200,000 motorbike taxis, where they are used by residents to break the eternal traffic jams. Multi-service apps such as Bolt, Uber and SafeBoda are already active in the motorcycle ride and delivery market.
Uganda’s e-commerce industry is also growing rapidly with this 2021 study by the country’s ICT department showing that the sector’s revenue will double to $421 million and user penetration will reach 29.1% by 2025. reaches. Some companies, such as SafeBoda, have already made changes to their strategic plans to take advantage of the industry’s upturn.
SafeBoda has changed its strategy in recent years from a single service provider to an integrated multi-service super-app that offers ride-hailing, online shopping and payment (pay bills, send and receive money). The Gojek (GoTo) supported super app, also available in Nigeria, has its eyes on other markets as well.
“We are building a global product that goes beyond East Africa,” Ricky Rapa Thomson, co-founder and CEO of SafeBoda, told TechCrunch in a recent interview.
Meanwhile, as Uganda’s tech ecosystem matures, driven by the country’s youthful population and growing smartphone penetration, dozens of startups across the continent have expanded into the country in search of new growth paths.
In October last year, mPharma, an e-health scale-up from Ghana that recently raised $35 million, entered the Ugandan market after taking a 55% stake in Vine Pharmacy, one of the largest pharmaceutical retailers in the country. Kenyan B2B marketplaces Marketforce and Sokowatch, and e-commerce platform Copia, have already set up operations in Kampala together with Nigerian MaaS startup Treepz. A dozen others, including Kenya’s logistics startup Amitruck, are also looking at the market.
Uganda is a country to watch this year as activity resumes across all sectors, boosted by the recent lifting of lockdowns, including the world’s longest Covid school closure.
This post Uganda in the spotlight as the country’s startups captivate YC, Google – TechCrunch was original published at “https://techcrunch.com/2022/03/04/uganda-in-the-spotlight-as-countrys-startups-captivate-yc-google/”