Total Valuation of Ethiopian Startups Passes $300M: Report

A new insight report on Ethiopia’s startup landscape reveals the concentration of funding in a few standout firms while the ecosystem combined has a total enterprise valuation of $302 million.

The Report prepared by GrowthAfrica and Systemic Innovation under an FCDO-supported Research and Innovation Systems for Africa (RISA) Fund project relays interesting figures into Ethiopia’s entrepreneurial ecosystem.

After assessing data compiled from 562 companies, of which 489 are startups, through Dealroom, the Report indicates that no firms crossed the $200 million valuation until 2024. Companies founded between 2015 and 2020 are key drivers of value, starting with a modest $6 million value in 2016, growing to $157 million by 2019, and peaking at $182 million in 2022.

The report, dubbed The State of Startup Innovation in Ethiopia, also explores investment trends, employment contributions, enterprise valuations, and sector-specific activity. However, it includes businesses that may not fully meet the definition of a startup.

Scott Walker, CEO of Systemic Innovation, explained in an email to Shega that the report aims to present a holistic view of the entrepreneurial ecosystem. According to Walker, startups defined as firms less than 10 years old were the primary focus, as requested by the government.

“Our approach also considers the broader ecosystem by utilizing Total Enterprise Value (TEV), a globally recognized standard, to ensure consistency across businesses of varying sizes and stages,” he stated.

In addition, Dealroom collects data from public sources such as news, and company filings. Consequently, the analysis might not comprehensively reflect the total funds raised, as many startups in Ethiopia do not disclose funding details.

Scott explained that the dataset in the Report primarily focuses on formal enterprises within Ethiopia’s innovation ecosystem, including startups, scaleups, and high-growth firms that meet Dealroom’s database criteria. The data used in the Report is also free to access via the Ethiopian Startup Data Hub.

While Ethiopian startups remain underfunded compared to their counterparts in neighboring African countries, a marked improvement has been visible over the past decade. According to the insight report, the highest amount of funding ever raised by a single firm was 42 million dollars in 2024, while the average is around 250k.

Roha Medical Campus, which received venture capital equity funding back in February, is the only firm listed in Dealroom with the stated amount. A sector analysis also reveals that fast-moving consumer goods (FMCG) firms attracted around 26 million dollars in funding while training, workforce development, and education, wooed in 4.15 million dollars.

Komari Beverages, raised over $26 million dollars in 2019.  M-Birr, the first mobile money service in the country, managed to pull in nearly 8 million dollars from the European Investment Bank in 2018, while EthioChicken attracted close to 3 million dollars a year before.

Nonetheless, investment in Ethiopia’s ecosystem remains limited, with most remaining modest compared to more mature markets.

Another major progress highlighted by the Report was the advances in terms of job creation. After nearly a decade marked by less than 20,000 employees, Ethiopia’s startup labor market now accommodates around 30,000 jobs.

Innovation also appears to lag in Ethiopian companies, with just two of the reviewed companies holding patents. This is an insight affirmed by the latest Global Innovation Index report that ranks Ethiopia in the bottom three of 133 countries in terms of innovation performance.

Ethiopia’s startup ecosystem has struggled for several years in terms of accessing credit, obtaining permits, and even renting out office space. With the Startup Act still in the draft stage, no formal substructure or regulatory system is in place.

Amitty Weiss, Managing Partner at Melela Partners, expects the Report and associated database to provide deep insight into the progress of Ethiopia's start-up ecosystem over the last decade.

“It's exciting to see the growth that has occurred and to have clarity on where the ecosystem needs to focus,” she told Shega.

Amity believes that the databases raise Ethiopia to the level of regional peers by providing investors, startups, and ecosystem players with a tool to research individual startups.

Nonetheless, Ethiopia’s investment climate remains challenging, as highlighted by the recent review by the International Trade Administration of the United States. Logistical bottlenecks, corruption, high land-transportation costs, and bureaucratic delays were indicated as daunting. Ethiopia not being a signatory of major intellectual property rights treaties such as the Paris Convention for the Protection of Industrial Property also dissuades investors.