June 25, 2024

Investment in African gaming startups on the rise

There has been increased reports of investment activities in African gaming platforms lately thus signaling investor confidence in the region’s growing reputation as a profitable market for esports.

South African gaming startup, Carry1st recently raised $27 million in a pre-Series B round, the single largest fund raise for any African gaming startup and Carry1st’s most significant since its founding in 2018.

Carry1st will use the financing to develop, license, and publish new games as well as further expand Pay1st, the company’s monetization-as-a-service solution,” the company said in a statement.

The mobile games publisher raised Series A rounds of $20 million in January 2022 and $6 million in May 2021. 

The funding round comes off the back of a successful 2022, which saw its game, ‘The President’—developed in partnership with CrazyHubs gaming accelerator—become one of the most downloaded games in the US. The game is loosely based on a fictionalized Donald Trump.

“2022 was a year of significant growth but together with our partners we look forward to making 2023 even better,” said the CEO, Cordel Robbin-Coker.

Its latest fundraising is backed by gaming venture heavyweights like BITKRAFT, a global investment platform for gaming, Web3, and immersive technology, and Andreessen Horowitz, an American venture capital firm specializing in funding stages.

“This upcoming generation will grow up digitally native with video games as their primary entertainment preference,” Jens Hilgers, BITKRAFT Ventures founding general partner, said.

Between 2015 and 2021, the number of mobile gamers in Africa more than doubled from 77 million to 186 million people, according to a 2021 study commissioned by Newzoo and Carry1st, covering sub-Saharan Africa. 95% of gamers were found to play games on smartphones.

GBarena and Galachtech

In January, Egyptian e-sports platform, GBarena entered an agreement to acquire Tunisia-based Galactech in a share swap deal valued at $15 million.

The deal helps GBarena expand into the burgeoning North Africa market as it anticipates closing a Series A funding later in the year, with foreign investors from the US, Singapore and the MENA region, the company said in a statement.

“We are thrilled to announce that with this transaction GBarena is joining forces with Galactech, creating a regional powerhouse in the thriving gaming industry,” said GBarena’s chairman, Ahmed Abou Doma.

PAGG, Skrmiish, and Metaverse Magna

In 2022, the industry also recorded some investments—albeit smaller in value and in some cases not disclosed—as more than 10 gaming studios teamed up to form a pan-African gaming group (PAGG) to tap into growth opportunities, including investor funds.

South African startup, Skrmiish, a mobile “play-to-earn” app, raised $2.5 million in seed funding to accelerate its global footprint and so far the company has acquired 100,000 players across 100 jurisdictions and has gone live in UK and Europe.

In September 2022, Nigerian-based blockchain gaming platform Metaverse Magna (MVM) raised $3.2 million, valuing the company at some $30 million.

MVM is eyeing crypto growth funds to create the continent’s largest decentralized autonomous organization (DAO), allowing players to govern their own Alien Worlds.

“We’re expanding the untapped crypto-gaming market across Africa and the rest of the globe, and we’re looking for partners who share our mission,” the company said on its website.

PAGG’s target is to grow the number of mobile gamers to a billion, through capacity building and training game developers across the continent.

“There is a wealth of incredible talent already on the continent, with more graduating every year from top-tier game development schools like Rubika. Most graduates though are relegated to doing remote work for overseas clients due to the lack of local gaming job opportunities. We’re going to fix that,” PAGG said in a statement.

The group sees a fast-growing number of mobile internet-connected users, a burgeoning youthful population and a rising middle-class opening up tremendous investment opportunities for the gaming industry on the continent.

According to GSMA’s The Mobile Economy sub-Saharan Africa report, the region’s 400 million internet-connected smartphone users will reach 680 million by the end of 2025. 

Statista projects the number of African mobile game users will rise to more than 310 million by 2027 as revenues soar to $2.27 billion with an annual growth rate of 7.15% over the period.