Tech in Africa
MAGNiTT is the leading startup online community in the MENA region. According to their latest report, the first quarter of 2020 witnessed a slight increase of 2% funding in 2019. The actual amount raised was $277 million. January and February registered strong starts with firms like Vezeeta raising $40M, Kitopi $60M, and SellAnyCar $35M.
Despite the increased funding numbers, 108 deals were signed only which is 22 percent lower than the previous year’s Q1. March registered a steep drop in transactions, a fact that can be attributed to the manifesting impacts of the COVID-19 pandemic.
MAGNiTT’s founder & CEO, Philip Bahoshy, explained how investment across MENA takes half a year to actualize. He believes the full impact of the COVID-19 pandemic is yet to be reflected in their report. However, he notes that early indicators show a slow in investor activity and interest in spending money on new ventures in light of the new public health developments.
There might be a twist to the whole situation as investor interest tends to shift towards startups witnessing increased activity within the new isolationist environment. Good examples would be grocery deliveries, e-commerce, healthcare, and education technology.
MAGNiTT also confirms that investors have been actively investing towards the end of March, an indication that the crisis does not deter their appetite for risk. A survey poll relayed to over a 100 startup founders and administered during the weekly webinar revealed that 59 percent had started feeling the impacts of the COVID-19 pandemic. 48 percent expressed deep worries about meeting their revenue targets while 25 percent attributed fundraising as their main worry. Overall 41 percent expect lower-than-forecasted revenues while 29 percent predict an inability to match their 2019 numbers.
As an indication of startups adapting to their new normal, fundraising has shifted online. MAGNiTT’s online fundraising tool that hosts 74 investors and several accelerators, registered a 117% increase in applications since January.
