Africa punches above its weight at YC 🥊

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In this edition, we’ll dig into African venture funding in July, check out Y Combinator’s latest African companies and learn about Bloom - Sudan’s second startup ever to raise capital from outside the country.

July Funding Roundup 💰

Venture funding in Africa pumps the breaks

Africa’s funding finally slows down in July by 20%, compared to 2021’s July funding.

🤝 Number of deals: 55

💰 Amount raised: $246m (compared to $309m in July 2021)

The biggest rounds this month were Wave Mobile Money ($91.5m), d.light ($50m) and Scorefam ($25m) - all companies in the growth stage.

My bet 🎲

Funding will grow the next two months, but it will be lower than August and September’s 2021 funding.

Why?

August and September 2021 were super-funding months, with OPay’s 200m Series C, Wave’s 200m Series A, and Andela’s $200m Series E making up most of the funding.

I’m confident that funding on the whole will grow. But it’s going to be a rollercoaster, so strap in.

Africa punches above its weight in new Y Combinator cohort 🥊

Y Combinator (YC) is the most hyped accelerator and fund in the world.

And for good reason - only 1.5% of companies get in. You may have heard of a few of them - startups like AirBnB, Stripe and Coinbase.

If you’re a founder, you’ve probably applied for YC.

If you’re an investor, you’ve probably seen a company’s valuation jump dramatically once they get into the cohort.

This is definitely the case in Africa.

African companies that get into YC have had great success - companies like Flutterwave, Paystack (acquired by Stripe) and Wave.

So, getting in to YC in Africa is a biggie.

And this month, Y Combinator welcomed 5 African startups to its Summer 22 cohort.

Drumroll please 🥁

Pivo Technologies (Nigeria) → A financial services platform for supply chain across Africa.

Patika (Kenya) → Small business financial management platform.

Garage Mobility (Ghana) → A wholesale auto parts distributor.

Chowdeck (Nigeria) → On-demand food delivery service and marketplace

CoKitchen (Nigeria) → Virtual restaurants convenience goods company.

This comes after YC slashed its cohort size by 40% - from 414 startups to 250.

So far, they have announced 146 startups - which puts African startups in the cohort making up 3.4% of funding - almost double the traditional funding on the continent.

Even as cohort sizes get smaller, Africa continues to punch above its weight.

We’re hoping to see more startups from Africa announced in the coming weeks 🥁

Fintech’s Bloom in Sudan 🌸

One of the biggest problems in Africa is rising inflation and currency devaluation.

This is amplified in Sudan, a country fighting for stability following military coups and protests, which has seen inflation surpass 359% in the last year.

Bloom is a Sudanese fintech startup, and offers fee-free accounts for users to save in US Dollars and buy and spend in Sudanese pounds.

It also offers remittance for Sudanese Diaspora to send funds to their family in Sudan.

Bloom secures the bag 💰

Bloom announced its $6.5m seed round led by Visa, YCombinator, Global Founders Capital and Goodwater Capital.

This is a big deal.

Bloom’s funding is only the second time that a foreign tech investment has been made since international sanctions were lifted on Sudan in 2020.

Bloom is the first Sudanese startup to enter Y Combinator in its Winter 22 Cohort.

Visa also participated in this round - seeing the opportunity to enter Sudan’s digital payments market.

According to Visa’s country manager, Ahmed Mohey, Visa aims to take the lead as a first mover in digital payments in Sudan.

Next up, Bloom is targeting East Africans in countries like Sudan, Kenya, Rwanda and Ethiopia - aiming to take over the East African market.

Bloom is yet another example of how startups in Africa solve the world’s hardest problems, and can be a force for stability and financial growth.

And that’s a wrap!

Did you learn something new? If you did, reply to this email to let me know.

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Catch you next week!