2020 Funding Report: Pre-Seed and Seed Stage Investment

Cumulative early-stage investment (consisting of pre-seed and seed stage deals) has grown from $25.97 million USD in 2015 to $88.32 million USD in 2019 in Africa. With a total of 45.9% of all deals being secured by companies at the seed stage in 2019.

However, as a proportion of all deals closed, pre-seed investment in Africa grew from 5.73% in 2018 to 9.49% in 2019. But is this a long-term trend, and what is the impact of this increased funding for founders who are yet to have launched a fully developed product?

We look at some of the market drivers behind the figures and offer our thoughts on how we see VC investment evolving to meet the needs of early-stage ventures.

• Cumulative early-stage investment (consisting of pre-seed and seed-stage deals) has grown from $25.97 million USD in 2015 to $88.32 million USD in 2019. As a proportion of all deals closed pre-seed investment in Africa grew from 5.73% in 2018 to 9.49% in 2019.
• The average size of Series A investment rounds in Africa has increased year-on-year from $3.2 million USD in 2017 to $5.7 million USD in 2020, however, the average size of the seed and pre-seed rounds has stayed relatively flat over the same period.
• The average age of companies in Africa raising Series A investment has increased from 2.7 years to 4.9 years, highlighting the increased need of early-stage investors offering smaller ticket-size investments.

This report was first published in May 2020.