Investors update: Kenya's data center market to generate over $100m

Kenya’s data center market to generate over $100m

Highlights

• Per a recent report, Kenya’s data center market is at a growing stage with revenues expected to reach $100 million by 2027, driven by the growing demand from SMEs and rising internet penetration rate.
• Kenyans’ preference for mobile commerce is also contributing to an increase in the demand for data centers in the nation. 
• Additionally, new entrants like Africa Data Centers are significantly accelerating market expansion in the upcoming years by meeting the demands of regional businesses and cloud service providers.

Source: ABC

Our Takeaway

Africa’s cloud computing and data center market is undeniably untapped. The continent still grapples with the lack of continent-wide digital infrastructure crucial for a digitally included region. Significant investments are being poured by operators into the space with the hope of bridging this gap while tapping into the market revenue potential. The Africa data center market was valued at $2 billion in 2020 and is expected to grow to $5 billion by 2026, at a CAGR of 15%, in line with the forecast above.

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Smile Identity closes $20m Series B round

Highlights

• Smile Identity, a startup providing ID verification and KYC compliance for African faces and identities, has raised $20 million in Series B funding.
• Silicon Valley investor Costanoa Ventures and Africa-focused venture capital firm Norrsken22 co-led the round, which saw participation from existing and new backers. 
• The startup has received more than $30 million from investors since launching in 2018 and will use the fresh round to ramp up its expansion plans, among other roadmap activities.

Source: TechCrunch

Our Takeaway

Globally, businesses lose up to $1 trillion annually to cybercrime and in Africa, that figure stands at a whopping $4 billion. As digital services, financial and non-financial, providers penetrate the African market at large, there is a need for fintech startups and digital businesses on the continent to carry out stringent Know-Your-Customer (KYC) and verification checks on their customers. Smile Identity is one of the many platforms powering these crucial processes for other startups.

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Naked raises $17m to expand digital insurance in Africa

Highlights

• Naked, a South African artificial intelligence startup that offers a digital way for consumers to insure their cars, homes, and valuables – has raised $17 million in Series B funding.
• The funding round was led by the International Finance Corporation (IFC), while German development finance institution DEG and Naked’s original investors, Yellowwoods and Hollard, also participated.
• The investment will enable the startup to grow its team, continue to invest in technology, and expand into new markets.

Source: ITWeb

Our Takeaway
Africa has a growing need for innovative insurance solutions to address the significant lack of coverage on the continent, although South Africa fares better compared to its peers in the region. Per the Financial Sector Conduct Authority (FSCA)’s 2022 Outlook, about 60% of South Africans alluded to having an insurance product, and penetration of insurance, measured using premiums as a percentage of GDP, was 13.7% in 2020 —one of the highest in the world. There is still a lot of room to improve access, however, presenting a market opportunity for startups like Naked.