🦄 vol. 21
karl and matt chat about 2021 vc funding in africa and gene editing
look back at it 🧐
We’re back 🥳 ... and before the new year gets away from us, a look back at the record breaking year that we just had in the African startup ecosystem is mandatory!
Africa raised over $4.3 billion in 2021, representing more than 150% year-on-year (YOY) growth from our first Covid year and around 0,16% of the continent's GDP. Comparatively, America (US) raised $330 billion - signifying 98% YOY growth - around 76 times more than what was raised in Africa and around 1,5% of the countries GDP 🤯. But hey, that’s better than last year where the US raised 98 times more than Africa.
As with all things, relative figures are crucial - Africa’s funding sits at around $3.2 per capita (divided by the population) whereas the US at around $1 002 per capita.
A billi in SA startup funding 🤯
Not quite but almost, according to research from The Big Deal, South Africa raised over $945 million in 2021. That’s around 22% of the continent’s $4.3 billion. Not impressed? From a per capita perspective that’s the highest on the continent at $16 funding per capita, not to mention that funding into SA’s startup ecosystem has grown at over 200% per year since 2019 (270% 2019 - 2020 & 216% 2020 - 2021). A quick comparison to our GDP shows that SA raised 0,29% of its 2021 GDP.
Notable trends 📈
Year of the Unicorns 🦄
As Senyo mentioned last year, for the first time ever, more than one African unicorn (a startup with a valuation greater than $1 billion) was minted in a single year. The continent saw five startups join the unicorn club — more than in all of 2016-2020 combined.
Fintech is (still) King 👑
Of the 11 nine-figure investment rounds (from 10 startups - Chipper Cash had two $100 million rounds) we had last year, Andela was the only one without a fintech component.
62% of the total African funding went to fintechs! If we exclude all the deals above $50 million, fintech still captured 41% of the total invested according to Briter Bridges.
Local is lekker 🤙🏽
The rise of local acquisitions! This year saw a host of African startups acquiring other startups as bigger players begin to consolidate their verticals and other geographies.
A special mention to one of Africa’s largest fintechs, MFS Africa, who followed their 2020 acquisition of Beyonic with Baxi in 2021.
This local aspect is so exciting because it means that the funding cycle is finally starting to go full circle! To use the above example, the founder and CEO of MFS Africa, Dare Okoudjou, a Benin national invested in a Ugandan and two Nigerian nationals when they acquired Beyonic and Baxi. This virtuous cycle brings and keeps growth in Africa! ♲
Where’s the money coming from? 🕵🏽♂️
Briter Bridges also looked at the Top 20 deals in 2021 that captured 65% of the capital deployed in Africa. They found that the capital came from:
USA 🇺🇸 - 63%
UK 🏴 - 8%
SA 🇿🇦 - 6%
Canada 🇨🇦 - 4%
Others include the Netherlands, Germany, China and the UAE to mention a few.
Upward and onward as we jump into 2022! 🚀
We’ll be watching the startup space closely and looking to hear from a host of different experts this year!
karl
extra-crispr 🥓
It’s a new year, but I haven’t quite managed to shake my (quite skewed) interest in biotech just yet (🤓).
Our growing understanding of genetics has been pivotal in furthering medicine, and the search for personalised medicine will largely hinge on sequencing genes and then creating targeted therapies. For a long while, genetics has provided scientists, and increasingly clinicians, with a roadmap of where to look but they hadn’t quite solved for how to fix them.
A quick lesson in pathology… 📖
In medicine, diseases and disorders are either congenital (you’re born with them) or acquired (you develop them during life). The genetic lotto can be notoriously cruel. And while some may be disappointed that they got their dad’s nose, your genetic make-up encodes for issues far more substantive than that. Genetics, and epigenetics, play a significant role in coding your risk for both congenital and acquired disease.
Up until now, genetic mutations have been used to calculate and predict risk, but CRISPR may move us past this.
WTF is CRISPR? 🤔
CRISPR, an acronym for Clustered Regularly Interspaced Short Palindromic Repeats (for completeness sake, it won’t be in the exam 😜), is a naturally-occurring phenomenon in bacteria that has been repurposed as a simple, programmable gene-editing tool.
Here’s a pared down look at how it works:
A component, the guide RNA, isolates the portion of DNA that we want to manipulate.
CRSIPR then guides a tool, typically an endonuclease Cas-9, to the site, where it acts as a pair of “molecular scissors” ✂️and cuts out the portion of DNA.
Put simply, we can cut out the genes that encode for the proteins that manifest disease (amongst a whole host of other things). Excitingly, CRISPR is simpler, cheaper, faster and more versatile than its gene-editing predecessors, which will benefit research efforts and accelerate wider adoption and use.
The potential impact 🥳
Addressing monogenic disease 🧬, disease caused by a mutation in a single gene, is often heralded as CRISPR’s crowning glory. At present, we’ve isolated 10,000 genes implicated in monogenic disease, with 1 in every 100 children born with conditions that include haemophilia and sickle cell disease. Historically, we’ve only been able to manage symptoms, but CRISPR-supported therapeutics could essentially cure disease and generate $75 billion annually.
Gains in cancer treatment 🤒 , primarily through CAR-T therapy, will be supported by CRISPR technology. CAR-T therapy is an immunotherapy that uses an individual’s own cells to target and kill cancer cells. CRSIPR is expected to drive down costs and improve efficacy of the therapy, improving outcomes in late stage cancers.
Agriculture 🌱 (yes, agriculture) also falls within the scope of impact. With global population expansion, the United Nations reports food demand will increase by 70% by 2050. CRISPR’s deployment in agriculture will usher in higher yields, bug-resistant (and pesticide-free) crops, enhanced taste and nutritional value and improved breeding practises.
A word of warning 🚨
As with most things in science, they aren’t built to go at breakneck pace. The technology was discovered, and first applied all the way back in 2012 and since then much of the iteration has occurred in labs on mice.
In 2019, the scientific community was dismayed when a Chinese scientist used the technology to make a pair of twins immune to HIV, by removing the gene that codes for the receptor that HIV uses to enter the host’s cell (and establish infection). While a feat of science, doing so without grappling with the ethical implications (or unintended effects of the gene removal) wasn’t viewed in a great light.
Takeaways 🍟
While still in relative infancy (in science terms), the promise of gene editing may carry us into a post-disease era (and have impacts that spill over into other industries). The next few years will have to see scientists, and humans alike, focusing their minds on both the science and the ethical concerns and issues surrounding the possibilities gene editing introduces. Just because something can be done, doesn’t necessarily mean it should be.
matt
karl is excited by the potential of africa’s new startup hub to be in zambia
if you’re looking to realise some of those new years resolutions, matt suggests checking out atomic habits by james clear
sash loved learning that a16z and google backed a south african mobile games publisher