Investment in African gaming startups gains momentum

With African mobile gamers growing from an estimated 77 million in 2015 to 186 million in 2022, gaming startups across the continent are pulling in multimillion-dollar investments.

By Conrad Onyango, bird story agency

African gaming platforms are reporting increased investment activity, signalling investor confidence in Africa’s growing reputation as a market for the gaming industry.

South African gaming startup, Carry1st recently raised US$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 US$20 million in January 2022 and US$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 U.S. The game is loosely based on a fictionalised 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 specialising 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. Ninety-five per cent of gamers were found to play games on smartphones.

In January, Egyptian e-sports platform, Gbarena entered an agreement to acquire Tunisia-based Galactech in a share swap deal valued at US$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 U.S., 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.

In 2022, the industry also recorded some investments – albeit smaller in value and in some cases not disclosed – as more than ten 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 US$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 U.K. and Europe.

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

MVM is eyeing crypto growth funds to create the continent’s largest decentralised autonomous organisation (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 US$2.27 billion with an annual growth rate of 7.15 per cent over the period.

/bird story agency.