Y Combinator’s increasing investments in Africa and its cohorts' performances
Introduction: about Y Combinator
Y Combinator (YC) is a renowned startup accelerator that invests in early-stage companies twice every year. Currently, the value of the cash funding provided is $125K in return for a 7% equity stake in the startups that are funded using a post-money SAFE (Simple Agreement for Future Equity), although this package has been varying throughout the years. YC’s programme lasts for 3 months and runs two cohorts per year: a winter cohort running from January through March, and a summer one, from June through August.
YC was founded in 2005 in Cambridge, MA, by Paul Graham, Jessica Livingston, Trevor Blackwell and Robert Morris. The accelerator, which was formerly called Cambridge Seed and is now based in Silicon Valley, has gone on to fund over 3,000 startups that have a combined valuation of over $300 billion. Well-known YC alumni include Stripe, Airbnb and DoorDash. Out of the numerous startups funded by YC, 47 have been African - 37 in sub-Saharan African countries and 10 in North African countries. In 2009, Nigerian online advertising startup PetaSales became the first African startup to be accepted into YC. Unfortunately, the startup shut down some years later. Nevertheless, since PetaSales, YC-backed African startups have gone on to achieve remarkable feats including being acquired and gaining unicorn status. The profiles of YC-backed African startups are provided below.
Graduates’ growth: how well have Africa’s YC graduates performed?
One of the hottest topics in the debate about early-stage capital in Africa has been the role of ‘tech hubs’ and support programmes in creating strong foundations for companies to go on to raise growth-stage funding. Y Combinator’s graduates have shown a particular propensity to scale, with companies like Paystack being acquired within half a decade since their debut. As Africa’s investment landscape grows by volumes and diversity, new resources are needed to highlight patterns and pathways to growth, especially as more and more correlations are being established between, and questions are being asked about, the origins of funding, geographies of incorporation, and success coefficient. Africa Investment Report 2020 breaks down the funding history on the continent since 2016 and provides an overview of the startup ecosystem in Africa at large.
The graph below provides an overview of the funding funnel for Africa-focused YC graduates since 2015:
2015 Cohort
Oolu, providing sustainable energy to off-grid households in West Africa
In 2015, Senegalese-based off-grid solar company Oolu became the second African company to get into the Y Combinator (YC) accelerator programme in San Francisco, USA. Founded by Nilmi Senaratna and Dan Rosa, Oolu is addressing electricity challenges in rural communities in Africa by providing high-quality solar products at affordable prices for off-grid households. Since exiting the accelerator programme, Oolu has raised a total of $11.7m in two disclosed funding rounds: a $3.2m Series A in 2017 and a $8.5m Series B in 2020.
2016 Cohort
Paystack, building payments infrastructure for African businesses
Fintech company Paystack joined YC in 2016 as the second Nigerian company to be invited to join the accelerator programme less than a year after its founding. At the time, it was extremely difficult for businesses in Africa to accept payments. With this in mind, Paystack founders Shola Akinlade and Ezra Olubi built an infrastructure that allows African businesses to accept online and offline payments from anyone wherever they are in the world. Before its acquisition by global payment company Stripe in 2020, Paystack just over $10m in Series A funding.
OMG Digital, Inc., ‘buzzfeed’ for African millennials
Popularly described as the ‘buzzfeed of Africa’, Accra-based OMG Digital (now called Artz Studio) was built to create and publish entertaining and relatable content for African millennials. The startup achieved the feat of becoming the first Ghanaian company to join the YC accelerator programme a year after it launched. However, monetisation problems caused the company to halt its operations and in the past two years, all of the original co-founders have gone on to work on new projects: Jesse Ghansah and Prince Boakye Boampong founded Swipe and Dash respectively, and Dominic Mensah joined American Eagle as a Project Manager.
Flutterwave, facilitating secure and seamless payments for African businesses
Flutterwave is an African payments company that enables African businesses to accept payments from anywhere in the world through its digital payment infrastructure. The company, founded in 2016 by Iyinoluwa Aboyeji and Olugbenga Agboola has provided support to thousands of businesses in Nigeria - where it was launched - and several other African countries. The fintech startup has raised a total of $225m in three major funding rounds: $20m Series A, $35m Series B and a $170m Series C round in 2021, propelling it to become Africa’s third unicorn startup.
Lynks.com (YC W'16), e-commerce procurement platform for Egyptians
This Egyptian e-commerce company provides a way for people in Egypt to access high demand products from anywhere in the world. Founded in 2014 by Mostafa ElBatsh, the consumer-focused startup joined the YC Winter 2016 batch and raised a total of $240K in pre-seed funding afterwards.
2017 Cohort
Tress, mobile app to provide hairstyle inspiration for black women
Before Tress became inactive, it was a social community app where black women could discover and share beautiful hairstyles. Unfortunately, social apps in Africa encounter problems generating revenue as they have to compete with global firms such as Facebook and Google for advertising budgets. The mobile app, which was developed by three female founders: Priscilla Hazel, Esther Olatunde and Cassanda Sarfo, launched in 2014 and raised a total of $120K in seed funding between 2014 and 2017. Two years after the startup raised funding from YC, at least two of its co-founders moved on to new projects.
Reliance HMO, providing easy access to health insurance for Africans
Reliance HMO has gone through a major pivot since it was founded in 2017. Before rebranding, it was known as Kangpe and it provided Africans with a platform to access healthcare from doctors remotely. Since then, it has expanded its offering to include optimised health insurance plans for customers by using technology and data science. The company was founded in 2017 by Femi Kuti, Ope Olumeken and Matthew Mayaki and has raised an undisclosed amount of seed funding.
Passerine Aircraft Corporation, bird-inspired delivery drones for medical deliveries
Passerine Aircraft Corporation was founded in 2017 in Johannesburg, South Africa by Matthew Whalley. Passerine developed medical delivery drones, with bird-like legs and feet for easy takeoff and landing.
Kudi, providing accessible and affordable financial services for Africans
Nigerian fintech startup Kudi provides access to financial services for Africans by enabling them to send money and pay bills through digital and non-digital channels. The startup was accepted into YC in the same year it was founded by Pelumi Aboluwarin and Yinka Adewale. Since it exited the accelerator programme, it has raised $6.7m in total funding, with a Series A as the last funding round.
Helium Health, EMR provider for healthcare stakeholders in emerging markets
Helium Health was originally called “One Medical” when it was founded in 2016, but then it rebranded a year later after getting into YC. Prior to joining the US-based accelerator, the team consisting of three founders: Goke Olubusi, Tito Ovia and Dimeji Sofowora won several prizes. Currently, Helium Health’s value offering is in providing technology solutions, including an electronic medical records (EMR) and a hospital management information system (HMIS) for healthcare providers in emerging markets to improve the efficiency of their service delivery. The Lagos-headquartered healthtech startup has now raised a total of $12m in funding - $120K seed for participating in YC, another $2m seed round and a $10m Series A round. Helium Health has formed strategic partnerships with notable stakeholders, enabling the startup to dominate the EMR sector in West Africa.
Releaf, industrialising Africa’s agritech sector to improve its food quality
Releaf is industrialising Africa’s agritech sector by developing hardware solutions to improve the quality of raw materials for food factories and provide increased earnings for farmers in the oil palm sector. The startup was founded by Isaiah Udotong, Ikenna Nzewi and Uzoma Ayogu in 2017 in Lagos, Nigeria and in the same year was accepted into YC. It raised $1.5m funding in pre-seed and angel rounds after graduating from the accelerator programme.
WaystoCap, African B2B marketplace for merchants and buyers in Morocco
Morrocan startup WaystoCap is a B2B marketplace that connects African merchants with buyers to enable them trade their goods locally and internationally. In 2016, the startup launched and has since raised a total of $3.1m in seed rounds. WaystoCap was founded by Anis Abdeddine and Niama El Bassunie.
TIZETI, offering unlimited, uncapped internet service across Africa
Lagos-headquartered Nigerian internet service provider Tizeti offers high speed, unlimited broadband internet to African homes and businesses at ‘customer-friendly’ prices. The startup, which is behind Wifi.com.ng, leverages technology and the falling cost of solar panels to provide uncapped internet service across several cities in Africa. Tizeti was founded in 2015 by Kendall Ananyi and Ifeanyi Okonkwo and has raised $5.1m in seed and Series A funding.
2018 Cohort
Kobo360, disrupting Africa’s logistics sector using technology
Kobo360 is a leading African logistics startup headquartered in Lagos, Nigeria that uses technology to connect cargo owners to trucks and drivers. It was founded in 2017 by Obi Ozor and Ife Oyedele II and has attracted investments to the tune of $37.2m.
Cowrywise, democratising access to high-quality savings and investment products for Africans
Cowrywise provides financial services that democratises access to high-quality savings and investment products for African middle class and millenials. The fintech startup was founded in 2017 in Lagos, Nigeria by Razaq Ahmed and Edward Popoola. In total, Cowrywise has raised $3.3m in angel and seed funding.
BuyCoins, making it easy for Africans to trade in cryptocurrencies
BuyCoins is a Lagos-based startup that allows users to easily trade in cryptocurrencies such as Bitcoin, Ethereum, Litecoin, USD Coin and USD Tether with their local bank account. The crypto startup has raised over $1m in seed funding. It was founded in 2017 by Ire Aderinokun and Timi Ajiboye.
2019 Cohort
Trella, reinventing freight in Africa
Trella offers a platform that connects shippers to truckers, allowing them to earn more and improve their operational efficiency. The technology platform was built in 2018 in Cairo, Egypt by Omar Hagrass, Ali El Atrash and Pierre Saad. It has raised over $700K in pre-seed funding.
Breadfast, fresh bread and groceries delivery startup
Cairo-based food delivery startup Breadfast delivers fresh bread and groceries to customers’ doorstep. It was launched in 2017 by Mostafa Amin and Muhammad Habib and since then has raised $2m in seed and Series A funding.
NALA, helping Africans securely send money from Europe to East Africa
NALA is a money transfer platform that helps users securely send money from Europe to East Africa. Benjamin Fernandes founded the startup in 2017 in Dar es Salaam, Tanzania and the company has raised over $200K in seed funding.
54gene, addressing the lack of diverse genetic material used in pharmaceutical research
54gene is a Lagos-based genomics research company that is addressing the lack of diverse data in pharmaceutical research through precision medicine. The biotech startup was founded in 2019 by Abasi Ene-Obong and Ogochukwu Francis Osifo. 54gene has raised over $19.5m in seed and Series A funding.
Thrive Agric, connecting African farmers with funds
Agritech startup Thrive Agric connects farmers to funds from investors, providing increased returns for both parties. The Abuja-based startup was founded in 2016 by Ayodeji Arikawe and Uka Eje. It has raised over $360K in grants.
Schoolable, providing access to affordable finance for African schools and parents
Schoolable is a fintech startup that provides access to affordable finance in the education sector. The startup was founded in Lagos, Nigeria in 2018 by Angela Essien and Henry Nnalue. Schoolable has raised $190K in pre-seed funding.
Wallets Africa, helping Africans with financial tools to manage their finances
Wallets Africa is a digital bank that provides financial services for Africans, allowing them to send and receive money and make payments using their mobile phones. The fintech startup has raised an undisclosed amount of funding post-YC. It was founded in Lagos, Nigeria in 2018 by John Oke and Joseph Benson Aruna.
CredPal, providing access to credit for individuals and businesses in emerging markets
CredPal is a Lagos-based fintech startup that provides access to credit for individuals and businesses in emerging markets. The startup was founded in 2018 by Mofehintolu Olaogun and Olorunfemi Jegede. To date, it has attracted investments amounting to $1.7m in unknown funding rounds.
2020 Cohort
Sakneen, making it easy for Egyptians to find their new home
Sakneen is a proptech startup that was founded in Cairo, Egypt in 2019 by Ramy Khorshed and Hussein El Kheshen. It provides a platform where users can conveniently buy or sell a home in Egypt. Sakneen has raised over $1.1m in seed funding since its founding.
Thndr, making investing easy and accessible for Egyptians
Thndr is a platform that allows Egyptians to invest in stocks, bonds and funds in Egypt commission-free. The fintech startup was founded in 2019 in Cairo, Egypt by Ahmad Hammouda and Seif Amr, and has raised over $120K in an undisclosed round.
YASSIR, allowing Africans to move around easily
Ride-hailing company Yassir allows users to request a ride using their smartphone. The Algerian startup was founded in 2016 by Noureddine Tayebi and el Mahdi Yettou. Yassir has raised over $200K in unknown funding rounds.
WorkPay, providing ERP solution for Africa
WorkPay is a Nairobi-based company that provides a payroll system for small and medium-sized businesses to manage and pay their employees. It was founded in 2018 by Paul Kimani and Jackson Kibigo Kungu and, at the time, it was known as TozzaPlus. WorkPay has raised over $2.1m in seed funding rounds.
MarketForce 360, bridging the gap in African retail distribution
MarketForce 360 offers a sales and distribution platform that enables consumer brands to deliver goods and services to retailers and consumers. The startup was launched in Nairobi, Kenya in 2018 by Tesh Mbaabu and Mesongo Sibuti. MarketForce 360 has raised $500K in seed funding.
Avion UAV, delivering medical supplies across Africa
Avion UAV is a technology company that designs, builds and operates drones to deliver medical supplies in Africa. It was founded in 2020 by Mohammed Ahmed and Brook Ayalneh. The startup has raised $150K in seed funding.
Tambua Health, helping doctors diagnose and treat respiratory diseases
Tambua Health is a healthtech / medtech services company that provides clinics with a platform to assess the health of the heart and lungs with minimal training. The startup was founded in 2017 in Nairobi, Kenya by Daniel Gathigai and Eric Kirima. It has raised $250K in seed funding.
Ramani, SaaS platform for salespeople to improve their sales operations
This Dar es Salaam-based startup developed an app to help salespeople track their inventory, register merchants and record sales transactions, thereby improving their sales operations. Ramani was founded in 2020 by two brothers: Calvin Usiri and Iain Usiri. The startup has raised $150K in seed funding.
Swipe Technologies, giving small businesses across Africa access to credit
Ghanaian startup Swipe Technologies got accepted into YC when it had not fully launched in 2020. Its founder, Jesse Ahin Ghansah attributes this to the trust he built with the accelerator after he previously co-founded another YC startup, OMG Digital. Swipe is a fintech startup that provides access to credit for small businesses through a business credit card. It has raised $150K in seed funding to date.
Bamboo, giving Nigerians unrestricted access to local and global stocks
Bamboo provides access to investment options for young Nigerians, allowing them to buy and sell stocks from local and global companies. The investment platform was founded in Lagos, Nigeria in 2019 by Richmond Bassey and Yanmo Omorogbe. Bamboo has raised $150K in seed funding.
CrowdForce, democratising access to financial services through an offline distribution network
CrowdForce is a crowdsourcing platform that drives financial inclusion in Africa by empowering local businesses and merchants with the tools to provide financial services for the underserved in emerging markets. The platform was built by Oluwatomi Ayorinde and Damilola Ayorinde in 2017 in Abuja, Nigeria. It has raised $400K in unknown rounds.
Healthlane, providing access to quality and affordable healthcare services in Africa
Healthlane provides access to quality and affordable healthcare for Africans. The healthtech startup was founded in 2019 in Yaounde, Cameroon by Agbor Ashumanyi Ako and Alain Nteff. Healthlane has attracted over $2.4m in funding.
SEND Freight, managing shipping in Africa using technology
SEND is a Lagos-based digital freight forwarder that makes it easy to ship cargo to and from Africa, managing the entire process up to final delivery to the warehouse. It was founded in 2017 in Lagos, Nigeria by Kingsley Oti and Larry Oti. SEND received $150K in seed funding, which was the standard check size that YC used to in startups that partake in its accelerator programme.
2021 Cohort
NowPay, helping corporate employees improve their financial wellness
NowPay is a fintech startup that improves the financial wellness of corporate employees, enabling them to be paid at any point in time during the month. It was founded in 2019 in Cairo, Egypt by Mostafa Ashour and Sabry Abuelenien. NowPay has raised $2.7m in seed funding.
Dayra, driving financial inclusion in Africa via seamless API integration
Dayra, founded in 2020 in Cairo, Egypt by Omar Ekram, is a fintech startup that provides financial services to unbanked workers and businesses via API integration. The startup has raised over $3m in pre-seed funding.
Djamo, money management super financial app for Francophone Africa
Djamo’s app allows users in Francophone African countries to manage their finances. Founded by Regis Bamba and Hassan Bourgi, the startup launched in 2019 in Abidjan, Cote d’Ivoire. Djamo has raised more than $450K in seed funding.
Sendbox, building shipping infrastructure for e-commerce merchants
Sendbox was founded in 2018 in Lagos, Nigeria by Olusegun Afolahan and Emotu Balogun. It is a fulfilment platform for small e-commerce merchants who sell directly to customers using their own online and offline channels. The startup has raised more than $120K in seed funding.
Kidato Inc, providing access to high-quality education for K-12 students
Kidato is an edtech platform that offers interesting, flexible and affordable education for kids, ages 4 to 18, in Africa. The startup was founded in 2020 in Nairobi, Kenya by Sam Gichuru. Kidato has raised over $120K in seed funding.
Mono, enabling African companies to access their customers' financial data
Described as ‘Plaid for Africa’, Mono is a fintech API startup that allows companies in Africa to access their customers’ financial accounts. The startup was founded in 2020 by Abdulhamid Hassan and Prakhar Singh and has raised over $600K in seed funding.
Vendease, providing access to high-quality food supplies for food service managers
Vendease was founded in 2019 in Lagos, Nigeria by Gatumi Aliyu, Olumide Fayankin and Tunde Kara. The startup is an online marketplace that provides a transparent process for food service business owners and managers to source for the best quality and affordable food supplies. It has raised over $120K in seed funding.
Flextock, e-commerce fulfilment platform for merchants in MEA
Flextock provides an e-commerce fulfilment platform for local merchants in the Middle East and Africa. It was founded in 2020 in Cairo, Egypt by Mohamed Mossaad and Enas Siam.
Flux, disrupting cross-border remittances in Africa
Crypto remittance startup Flux allows users to make payments and cross border transactions across Africa. It was founded in 2019 in Lagos, Nigeria by two undergraduate students Ben Eluan and Osezele Orukpe, who later dropped out to build the company.
Prospa, building financial services for African entrepreneurs
Prospa is a neobank for entrepreneurs in Africa that allows them open and manage a business account in minutes. Based in Lagos, Nigeria, the fintech startup was founded in 2019 by Frederik Obasi and Rodney Jackson-Cole. Prospa has raised $125K in seed funding.