Development
Understanding Africa’s $180 Billion Internet Economy Future By Sérgio Pimenta, Nitin Gajria GENETIC SCIENTISTS STUDY HUMAN DNA to better understand medical conditions and how to treat diseases. But their research is often based on samples that don’t actually reflect the world’s population. Around 80% of the human DNA used in genetic studies is from people of European descent. This means that researchers are often unable to study and address conditions that affect global ethnicities. In January 2019, Abasi Ene-Obong, a young tech engineer from Nigeria, founded 54gene (www.54gene.com/about-us) with the aim of making gene studies more representative by increasing access to African genomic data—which currently accounts for less than 3% of all genetic data sets. After securing two rounds of funding, 54gene has gone on to complete a fully resourced biobank in Lagos, crucial to support academic research, drug development, and disease detection. Ene-Obong’s story is just one example of how talented African entrepreneurs are creating new opportunities across the continent. As a new report from Google and the International Finance Corporation (IFC) (www.ifc.org/wps/wcm/connect/ corp_ext_content/ifc_external_corporate_site/about+ifc_ new) shows, the startup ecosystem is helping drive
Africa’s internet economy towards a projected value of $180 billion by 2025, or 5.2% of the continent’s GDP.* We collaborated on the report—titled "e-Conomy Africa 2020: Africa’s $180 billion internet economy future”—to highlight the strengths and challenges of the internet economy today, and to better understand where it might go in the future. Here are some other things we learned.
Startups in Africa are progressing and reaching new milestones According to Partech Ventures Africa (https://
par techpar tners. c o m /p r e s s - r o o m / partech-africapublishes-itsannual-reportafrican-techstar t-ups-reachnew-symbolicmilestone-us202-billion-raisedequity-fundingrepresenting74 - y o y - g r o w t h) ,
African tech startups reached a new milestone in 2019 with $2.02 billion of equity funding raised. That’s 74% more than in 2018, and represents an average deal size of $8.08 million. At the forefront of the internet economy’s growth are startups in sectors like financial technology (fintech), e-commerce, health, e-logistics, e-mobility and food delivery. Fintech leads the way in terms of funding, receiving 54% of all African startup investment in 2019. This indicates high investor trust, which is significant given the sector’s important role serving unbanked and financially excluded Africans. One example is the Nigerian digital payments and commerce platform Interswitch, which received $200 million in equity funding from Visa in 2019, as well an IFC investment of $10.5 million. These investments came at a time of big growth for the electronics payment market, and, as a result, Interswitch has helped transform the infrastructure of Nigeria’s banking system, while extending its services to 23 other countries. E-commerce startups have also shown strong growth, thanks to improved digital payment services and a rise in mobile technology and payment channels. In 2019, e-commerce accounted for
*e-Conomy Africa 2020: https://kstatic.googleusercontent.com/files/ad1166fd6e3289b5e6445c73e4cff5bbb9df1927d35cff4f4b5efa8ebb4fe16620d5ddb499d17956 26
November-December 2020
DAWN
www.africabusinessassociation.org
