Opinion | 2019 has been a big year for Chinese VCs in Africa as they branch out into tech, logistics and e-commerce

2019 has been a landmark year for fundraising by African start-ups and out of the US$441.4 million raised by 45 start-ups on the continent by August this year, more than a quarter came from Chinese investors.

It is not surprising that Chinese investors have started where they are most familiar, and the biggest funding rounds have covered companies that were founded by Chinese people or which have strong China connections.

Opay, whose parent company is Opera, led by Chinese internet billionaire Zhou Yahui, raised a whopping US$170 million dollars in its Series A and B funding rounds, which occurred within four months of each other. Only a darling of the Chinese tech world like Zhou Yahui could bring in heavyweights like Meituan Dianping, IDG Capital and Sequoia China.

Meanwhile budget smartphone maker Transsion that leads sales in Africa, launched a successful US$400 million IPO on China's hot new tech-focused stock market this year, and has achieved runaway success with its Tecno phones across the continent.

Transsion has its own venture capital wing called Future Labs, and hosted the China Africa Mobile Internet Economy Summit (CAMIES) in Nairobi earlier this year, inviting a number of other large Chinese investors, companies and partners, including JD Finance and UnionPay, to showcase their ecosystem. Their portfolio company Boomplay raised US$20 million earlier this year, while Palmpay took home another US$40 million.

Lesser-known companies such as Cleverhome, a Shanghai-based e-commerce company that sells products including building materials, home appliances and motorcycles to Africa, raised money from Gobi Partners. Historically, Chinese VC firms tend to invest based on relationships, so it makes sense that Chinese-based companies have an advantage in courting these funds.