Ethiopia Startup – Africa Market Map

Across Express, a logistics company that provides freight management services, raised funds from Addis Ababa Angels, along with Deliver Addis, a food ordering and delivery company, receiving investment from Impact Angel Network. These Angel investment networks playing an important role in supporting a budding start-up ecosystem.

So, is this beginning of a growing trend? According to Shega, a research outlet, the Ethiopian government is showing increased commitment to supporting tech founders. Over the past 10 years, internet penetration has increased from 0.4% to 18.6%. And in August 2020, the Ethiopian government announced new measures to support the continued growth in entrepreneurship and innovation. With this in mind, we took a look at some of the start-ups making their mark.

According to data collected by the Baobab Insights team, the education sector is one of the most active spaces in Ethiopia. BeBlocky, for example, use gamified learning and interactive characters to teach young students the fundamentals of programming and coding.

Langbot (Botter.io) leverages gamification techniques to support language teaching using their artificial intelligence (AI)-powered chatbot.

Lesan.AI, is another machine learning tool that helps to translate text into local languages across Ethiopia thereby helping open up services to new audiences across the region.

Ride-hailing start-up, Catch Taxi, is following the footsteps of peers; Ride and Zayride announcing in January 2021 that they intend on expanding operations across East Africa, starting in Kenya.

Who’s investing in the market?

While investment into Ethiopian start-ups is growing, it still lags behind other ecosystems in the region. Kenyan start-ups, for example, raised a total of $166.165 million USD in 2020, and increase from 2019 in which start-ups raised $157.842 million USD.

The Baobab Network, invested in construction technology company, ConDigital, who provide project management software to track and monitor building projects. Consonance Investment Managers have also shown commitment to the market having invested in Gebeya, who provide outsourced technology talent based in Ethiopia, both in their seed round and subsequent Series A, which was supported by Orange Digital Ventures and Partech.

Initiatives such as the Ethiopian government announcement in August 2020 have an important role to play in supporting SME growth. Investment is growing, and the increase in pre-seed and seed stage investment across Africa in 2020 indicates investor for early-stage companies. That said, 2020 was a challenging year. The impact of repeated and lengthy internet shut-down’s across many regions in Ethiopia, and the on-going impact of COVID-19 globally, perhaps give an indication of the fragility of a budding ecosystem.