2024_Ghana Startup and Innovation Ecosystem Report-4

[Virtual Presenter] Ghana's e-commerce industry has evolved significantly in recent years, driven by smartphone penetration, internet access, and social media growth. Online buying and selling have become part of daily life, with more Ghanaians embracing digital transactions. Consumers are increasingly comfortable paying for items online and having them delivered to their doorstep, reflecting a shift toward a more digital shopping culture..

[Audio] Ghana Innovation Journal offers data-driven research, content marketing, partnership facilitation, and bespoke services to help you capture Ghana's tech pulse. With these services, you can amplify your innovations and thought leadership, access unique insights into Ghana and Africa's tech and startup landscape, and connect with key industry players and investors to accelerate growth. Our team provides valuable insights that AI cannot generate, helping you elevate your brand and drive industry impact..

[Audio] Data-driven insights play a crucial role in understanding the evolving Ghanaian startup ecosystem. This report provides a comprehensive overview of the funding landscape, policy developments, and sectoral growth patterns shaping the entrepreneurial environment. By exploring often-overlooked sectors like healthtech and e-commerce, the report highlights their potential to drive economic transformation. Beyond these deep dives, the report captures broader trends influencing Ghana's innovation ecosystem, including the rise of venture debt and fintech. The insights provided will serve as a valuable resource for stakeholders committed to driving sustainable growth..

[Audio] The table of content outlines the structure of our presentation, providing an overview of the topics we will cover. Funding analysis by industry and stage follows, then demographic analysis, expansion analysis, policy initiatives, access to finance, healthtech wrap-up, ecommerce wrap-up, and finally, our top reads from GIJ. Our methodology section concludes the presentation..

❖ FUNDING DASHBOARD 5.

[Audio] The data reveals that the total funding raised in the ecosystem has reached one hundred twenty-one million dollars, with financial services being the largest industry, accounting for forty-five percent of this funding. The biggest deal was valued at thirty million dollars, showing a ninety-five percent year-on-year increase. Moreover, series B equity and debt financing have been prevalent, with median ticket sizes reaching two hundred thousand dollars. Interestingly, only four mergers and acquisitions deals were documented, which represents a significant decline compared to previous years. Furthermore, funding raised by female chief executive officers accounted for less than one percent of the overall funding..

[Audio] Since 2018, startups have been raising capital, with nearly $750 million secured. A significant milestone was reached in 2024, with a remarkable 95% increase in funding compared to previous years. There were 51 grant deals, with a total value of millions of USD..

[Audio] In March and August, $30 million was raised in each month, making them the most successful months. Conversely, April and December had fewer deals. The total value of funding rounds fluctuated throughout the year, ranging from $30.9 million in January to $1.2 million in October. This data reveals that some months are more favorable for securing funding than others, allowing us to identify trends and patterns in the market..

[Audio] Venture debt experienced a significant surge in 2024, growing by an impressive 431% compared to the previous year. This growth can be attributed to several factors, including the global equity market downturn, which has led to increased selectivity among venture capitalists. As a result, startups have been forced to explore alternative funding options, such as debt financing. Additionally, the maturation of Africa's startup ecosystem has created a pool of companies with predictable revenue streams, making them attractive candidates for debt financing..

[Audio] Funding analysis by sector and stage provides valuable insights into the investment landscape. This breakdown allows us to identify trends and patterns in funding activity across different industries and stages of development. By examining these sectors and stages, we can better understand where investments are being made and why. This information is crucial for entrepreneurs, investors, and industry professionals seeking to navigate the complex world of funding..

[Audio] Fintech has emerged as the crown jewel of the ecosystem, taking its rightful place as the most funded sector in 2024. According to reports from Gold Rush Database and Innovation Spark Analytics, this sector received significant funding through equity, debt, and grants..

[Audio] The data shows that the top 10 big deals accounted for almost all of the funding raised in 2024. These large transactions, reported by Gold Rush Database and Innovation Spark Analytics, took up 94% of the total funding. This significant concentration emphasizes the significance of these major deals in defining the industry's financial dynamics..

[Audio] Deal-making activity has been concentrated primarily around the pre-seed and seed stages, accounting for 57% of all transactions. This trend is reflected in the funding data, where equity and debt investments have been allocated across these stages. The figures show that pre-seed deals accounted for $14.67 million, seed deals for $37.50 million, series A deals for $26.43 million, and late-stage deals for $37.45 million. In contrast, growth-stage deals totalled only $5.97 million. These statistics highlight the significance of early-stage investment in the current market..

[Audio] Investors have consistently shown confidence in three key sectors - fintech, agritech, and healthcare - with expectations of strong venture returns driving continued investment in these areas. According to reports, agriculture and fintech have held the top spots in 2022, 2021, and 2023, respectively. In H1 2024, fintech maintained its position, while healthcare took over second place. The top five industries in 2024 were agriculture, fintech, energy and water, healthcare, and food logistics. These findings come from the Gold Rush Database (2024) and Innovation Spark Analytics (2024)..

[Audio] Funding analysis reveals that there is a significant disparity in funding sources based on gender. The data shows that women-led startups receive funding from distinct sources compared to their male counterparts. This underscores the necessity for more inclusive investment practices and greater diversity in startup funding..

[Audio] Despite the progress made towards equality, male-led companies continue to dominate the funding landscape. They have secured significantly more capital than their female-led counterparts. In fact, male-led companies have raised 154 times more capital than female-led companies. This disparity is evident when examining funding by CEO's gender, with male CEOs securing substantially more investment than their female counterparts. Furthermore, even gender-diverse teams, which include both men and women, have only managed to raise $0.17 per dollar invested, compared to $0.01 for female CEOs alone. These statistics highlight the ongoing challenge faced by women in securing funding for their businesses..

[Audio] Foreign-educated founders have continued to dominate the funding landscape, with funding by education background showing a significant trend. Universities attended by locally-educated CEOs reveal a strong presence of alumni from Kwame Nkrumah University of Science and Technology, reflecting the institution's focus on computer science and engineering..

[Audio] Venture capital continues to provide risk capital for startups, especially in B2B ventures, which have a higher likelihood of securing funding during economic downturns. Our data shows that venture capital and private equity accounted for the largest share of funding rounds in 2024, followed by development finance institutions and foundations. Incubators and accelerators also played a significant role, whereas crowdfunding remained relatively small compared to other sources. These findings are based on data from the Gold Rush Database and Innovation Spark Analytics..

[Audio] Expansion stage companies usually receive bigger investments compared to earlier stages. This pattern indicates that investors are more likely to accept greater risk in exchange for potentially higher returns..

[Audio] Some companies chose to expand their operations beyond Ghana's borders, while others focused on strengthening their presence within the country through strategic acquisitions..

❖ POLICY INTIATIVES 21.

[Audio] The government agencies launched several policy initiatives in 2024 to foster innovation. The innovation voucher grant scheme was launched by MESTI, while the Bank of Ghana released draft guidelines. The Exchange Commission opened equity crowdfunding, and the Ministry of Communications and Digitalization launched the digital economy policy. The National Insurance Authority published guidelines on cybersecurity, and the Ghana Enterprise Agency streamlined its processes to license more startups. The Banking Commission accepted a draft directive on cybersecurity..

[Audio] Regulators have been actively involved in shaping the fintech landscape in Ghana, issuing approvals and sanctions to various players. StacAi has been appointed as the technology partner for Ghana, while RightCard, also known as LemFi, received approval from the Bank of Ghana to operate. However, LemFi was later sanctioned by the Bank of Ghana for breaching financial regulations. Other notable developments include Chipper Cash acquiring Ghana for violating broker-dealer license requirements, Flutterwave securing a fintech license from the Bank of Ghana, and Grow for Me and Ingwoo Fintech being sanctioned by the Central Bank of Ghana for breaching foreign exchange regulations. The regulatory body has also lifted bans on some fintech companies, including LemFi and CBG, allowing them to resume their forex operations..

❖ ACCESS TO FINANCE 24.

[Audio] The Development Bank of Ghana operationalized its equity fund of funds investment product in 2023, securing $5 million in equity from its shareholders' funds. This milestone marks a significant step forward in the bank's efforts to promote access to finance in Ghana. New limited partners have emerged, including the Development Bank of Ghana and Ashesi University. These partnerships will undoubtedly play a crucial role in driving innovation and growth in the country..

[Audio] Innovate Africa has launched an angel fund to support entrepreneurs who are tackling complex challenges across the continent. This fund provides backing to founders who are working on innovative solutions to address pressing issues..

[Audio] Julius Nkansah Owusu-Kyerematen, a Google executive, has launched an investment platform called 10k2startup. This platform channels resources to African startups, investing up to $50000 in exchange for an equity stake of 15% to 25%. The initiative focuses on ambitious teams pushing technological boundaries, creating innovative solutions that redefine industries and improve lives..

[Audio] Kosmos Innovation Center was the most active grants investor, while MEST Africa was the most active equity investor..

[Audio] The healthtech industry continues to evolve with new innovations and advancements..

[Audio] The latest reports from Rivia highlight key trends and developments in the healthtech industry. These reports provide valuable insights into the sector's growth, challenges, and innovations..

[Audio] RiviaCo delivers high-quality healthcare services by collaborating with healthcare and diagnostic facilities to upgrade their infrastructure and technology. This partnership enables them to provide efficient patient care and improve healthcare access in Africa's primary healthcare system..

[Audio] The story behind the founding of RiviaCo began when its founder visited a clinic in North Kaneshie, Accra, for an ear infection. Upon arrival, he was struck by the sight of an old, dilapidated building that hardly resembled a place of healing. Despite initial doubts, the pain drove him inside, where he found a disorganized environment. Fortunately, he met a skilled physician, Dr. Dzorwulu, who provided excellent care. This experience and conversation with the physician sparked his curiosity, leading him to visit several neighborhoods across Greater Accra. He discovered that many clinics were in similar poor conditions, realizing this was a key reason why some people lacked confidence in the healthcare system. This insight inspired the founders to build a business that combined infrastructure and software to deliver personalized healthcare through a network of modern clinics..

[Audio] RiviaCo's playbook involves leveraging both infrastructure and software to enhance primary healthcare delivery..

[Audio] The healthtech industry has witnessed remarkable growth, characterized by fundraising activities and business expansions. Reports from reputable sources such as Launchbase Africa, Citinewsroom, Rivia, AAIC, and Techlabari, all dated 2024, support this trend..

[Audio] The e-commerce industry continues to evolve, driven by innovative technologies and shifting consumer behaviors..

[Audio] The ecommerce industry continues to evolve with new trends and insights emerging regularly our reports provide a comprehensive overview of the current state of affairs highlighting key developments and areas of growth with this information businesses can stay ahead of the curve and make informed decisions about their online strategies.

[Audio] Africa's urban population faces growing challenges in managing daily tasks due to traffic congestion, time constraints, and fragmented digital services. This has led to significant losses in productivity, particularly in Ghana where traffic congestion costs the country approximately 8.21% of its GDP annually. Furthermore, 90% of retail in sub-Saharan Africa remains cash-based, hindering business growth and financial inclusion. Many small businesses struggle to reach customers beyond their physical locations, resulting in reduced revenue potential. The emergence of e-commerce and digital payments offers an opportunity to simplify services, increase business accessibility, and enhance consumer convenience..

[Audio] Ghana's e-commerce industry has evolved significantly in recent years, driven by smartphone penetration, internet access, and social media growth. Online buying and selling have become part of daily life, with more Ghanaians embracing digital transactions. Consumers are increasingly comfortable paying for items online and having them delivered to their doorstep, reflecting a shift toward a more digital shopping culture..

[Audio] The ecommerce trends were shaped by a mix of company exits and product expansions. According to reports from reputable sources such as Techpoint Africa, Techcabal, Jumia, Hubtel, Citinewsroom, and Jowato, this was the landscape in 2024..

❖ GIJ ECOSYSTEM REVIEW 40.

[Audio] The Ghanaian startups made significant strides in 2023, with several notable achievements. Hubtel has reached a remarkable milestone of GHS 160 billion in transaction value. Warc Africa secured $7.5 million to boost farmer income and promote sustainable agricultural practices. Wahu Mobility established its first electric vehicle assembly plant in Accra, while Zeepay received $3 million to fortify its financial standing and drive growth. However, the report does not mention the most active investors who supported these innovative ventures..

[Audio] The innovation spark activities involved working closely with various ecosystem stakeholders to support founders. This included facilitating research, scouting ventures, and providing training programs for over 500 e-commerce entrepreneurs. Moreover, we refined the business strategy of an agribusiness to boost its revenue. Additionally, we delivered thought leadership talks and published reports on the startup ecosystem, outlining the current and future outlook..

[Audio] Our portfolio reports provide valuable insights into the performance of our investments, offering stakeholders a comprehensive overview of their progress. Designed to facilitate informed decision-making, these reports empower founders, investors, and development partners to make strategic choices within the ecosystem. With our data-driven approach, we ensure accuracy and transparency in our reporting, giving users the confidence they need to navigate the complex landscape of entrepreneurship and innovation. Click to access previous reports and gain valuable insights from our extensive experience..

❖ METHODOLOGY 44.

[Audio] Data and assurance integrity are crucial aspects of any report. The Ghana Startup and Innovation Ecosystem Report aims to reduce information asymmetry by providing a comprehensive picture of the current state of the Ghanaian startup ecosystem. To achieve this, the report's authors strive to maintain accuracy by constantly updating their data. If any errors or inaccuracies are spotted, readers are encouraged to contact the team at [email protected]. The report is based on data from various sources, including the Ghana Innovation Journal in 2024, the Gold Rush database, and other reliable sources. The data is then merged and de-duplicated to ensure a clear view of activity in the Ghanaian technology ecosystem. Startups included in the report are those that have raised at least $10000 in equity, debt, or grants, and are either technology-based or tech-enabled. The report focuses exclusively on Ghanaian startups, defined as those whose primary market is Ghana or whose headquarters is located in Ghana..