Grace Ashiru
The Democratic Republic of Congo (DRC), renowned for its abundance of natural resources, is making significant strides in the global tech landscape.
This country, rich in ‘green metals’ like cobalt and copper and home to the world’s second-largest tropical rainforest, has recently joined the East African Community and is experiencing a surge in its startup ecosystem.
In 2023, the DRC achieved a notable milestone by securing $62 million in startup funding. This impressive feat positioned it as the leading contributor to the year-on-year growth of startup funding in the Central Africa region, with a remarkable increase of 33%.
In 2023, Central Africa experienced a notable increase in its financial growth, rising from $51 million in 2022 to $68 million. Despite this significant growth, the region’s total funding remains substantially lower compared to its neighboring areas, as highlighted in a report by Africa: The Big Deal.
In the realm of startup hubs within Central Africa, Cameroon achieved funding of approximately US$4 million, while Chad received slightly under $2 million.
In the recent rankings of Africa’s startup investment landscape, the vast nation in Central Africa has secured the sixth position on the continent, following closely behind Benin. Both countries, despite each attracting under $100 million in investments in 2023, have surpassed Ghana. Ghana, traditionally a strong competitor in Africa’s ‘second tier’ startup scene, has seen a decline in investments.
Max Cuvellier Giacomelli, Co-Founder of Africa: The Big Deal, noted in a 2023 Start-up Funding Round-Up webinar that this decrease in investment isn’t isolated to the ‘big four’ African countries alone. He also mentioned the anticipated resurgence of Ghana as a leading destination for startup investments in Africa in the upcoming years.
In this context, Ghana’s position fell to seventh place, having raised $57 million in 2023. This is a significant reduction from the nearly $103 million it garnered in 2022, as reported by Statista.
In 2023, Benin successfully secured $71 million in funding.
Kenya emerged as the leader in Africa’s startup funding, garnering $800 million. This marked a rise in its position compared to the previous year, despite experiencing a 29% decrease in its annual fundraising. Egypt followed closely with $640 million, positioning North Africa as the second most appealing market for the first time. South Africa secured $600 million, while Nigeria, which previously held the top spot, fell to fourth place with $410 million.
Overall, fundraising by African startups witnessed a 39% decline year over year. The total amount decreased from $4.6 billion in 2022 to $2.9 billion in 2023.
Although the startup ecosystem in the Democratic Republic of the Congo (DRC) is relatively nascent and often overlooked in global startup ecosystem rankings, emerging startups are laying the groundwork for the country’s recognition as a notable hub for startups.
In July 2023, Nuru, a company specializing in solar energy, achieved a significant milestone by securing $40 million in a Series B equity funding round. This funding is earmarked for expanding its utility-scale solar mini-grids in three key cities in Eastern Congo: Goma, Kindu, and Bunia.
Previously, in June 2003, Tuma, a Congolese fintech firm, set a record by raising $500,000 in funding, marking the largest investment round ever secured by a fintech company in the region.
In another notable achievement, VaultPay, a fintech enterprise, earned a distinguished place in the Y Combinator’s 2023 summer cohort in August. This selection made VaultPay the first Congolese-led company to join this elite group of 202 startups from around the world, a significant accolade for the organization.
The Big Deal report highlighted that in 2023, fintech and energy startups were the leading sectors attracting investments in Africa, with fintech comprising 41% and energy 28% of the funding. The energy sector experienced a rise in investment from $670 million in 2022 to $800 million in 2023. However, fintech saw a decrease, dropping from $1.8 billion in 2022 to $1.2 billion in 2023.
Energy and health-tech health techy sectors experienced year-on-year growth last year, according to Maxime Bayen, the Lead Venture Partner at Catalyst Fund and Co-founder of Africa – The Big Deal.
In the Eastern African region, major contributions from Sun King and M-Kopa, who raised nearly half a billion dollars combined, boosted the region’s total startup fundraising to $880 million in 2023. This accounts for 31% of the startup investment across the continent, highlighting the crucial impact of energy startups in this sector.
Additionally, the Democratic Republic of Congo (DRC) is poised to see an upswing in e-commerce funding, following Wasoko’s entry into the market, currently valued at $625 million. This e-commerce startup stands out as one of the few on the continent expanding into new markets, including Zambia, during a period where many startups are scaling down or shutting down due to a near standstill in new investment rounds.
In December 2022, the Democratic Republic of Congo (DRC) became the latest in a series of African nations, including Senegal, Nigeria, and Tunisia, to implement startup acts. This move is aimed at accelerating the growth of their entrepreneurial sectors.
