The Most Valuable Y Combinator-Backed African Startups In 2023

Eight African startups have been named in the 2023 Y Combinator Top Companies list, an anticipated annual compilation of the most valuable companies in the coveted YC portfolio.

This year’s list, grouped into 4 lists: “YC’s top private, public, exited, and breakthrough companies,” shows YC’s highest valued private and public companies and also displays exits, all sorted by each company’s valuation from their latest funding round.

The “Breakthrough Companies” list highlights the fast-growing companies in which YC has topped up its investment. All the startups in the list are valued at over USD 150 M. YC however clarifies that the compilation is not an exhaustive list of YC’s top companies as they have allowed founders to opt out of being listed for any reason. 

The African contingent in the top private companies list comprising 294 startups is made up of some usual suspects – such as Flutterwave. The Nigerian fintech unicorn occupies 30th place on the YC list, making it the most valuable YC-backed African startup.

Despite an extensively reported scandal alleging misconduct and money laundering on the part of its leadership in the past year, Flutterwave remains one of the most prominent startups on the continent, having exploded onto the scene since making YC’s Summer Batch in 2016.

Flutterwave, which now claims to cover 30+ African countries, has progressed in payments, e-commerce, and business lending, and it closed a USD 250 M Series D last year that catapulted its valuation to over USD 3 B, the highest for an African startup albeit there are indications that the tech market downturn may have chipped away at the figure.

While valuation is not exactly a foolproof metric for assessing company value as revenue and profitability seem like more accurate reflections of what a business is worth, private companies rarely share financial data publicly, with the Nigerian neobank Carbon being the one known exception.

The absence of such data leaves the public to make do with approximations of a startup’s value based on what venture capitalists decide during funding rounds. Hence, the annual Top Companies list from the world-renowned accelerator, YC, is a keenly observed barometer.

Dakar-based mobile money company, Wave, which became valued at over USD 1 B in 2021, is also represented on the YC top companies list, the second-highest ranking African startup on the list (in 49th place).

Wave has established itself and grown rapidly in the previously telco-dominated mobile money arena in Francophone Africa and also become the first non-bank and non-telco to secure an e-money license in the region. There has been some turbulence which resulted in a layoff exercise at the startup recently. However, Wave would be looking to deepen its penetration.

The most valuable YC-backed African startups in 2023 also include the Algeria-based super app, Yassir, which has been on a growth tear in recent years. Adding to the North African contingent, Egypt’s Breadfast, which delivers household goods, is also listed in the top private companies list, as well as included in the Breakthrough section which indicates YC has doubled down on the Cairo-based startup.

YC, the prominent global startup accelerator which, since 2005, backed more than 4,000 startups from all over the world- including many that have become household names such as Airbnb and DoorDash – has in recent years stepped up investments in African startups.

The accelerator now counts 86 African startups in its Startup Directory and its 2022 Winter Batch admitted 24 of those. The majority of YC-backed African startups are Nigerian companies; indeed, the four other companies listed in the 2023 Top Companies list – namely Reliance Health (health insurance), 54gene (genomics research), Kobo360 (haulage tech), and Nomba (banking and payment) – are all rooted in Africa’s most populous nation.

Although YC has recorded only one exit in Africa so far (following the acquisition of the Lagos-based fintech Paystack by global payments player Stripe in 2020), its appetite for potential winners in Africa’s burgeoning tech landscape has only increased, extending to many different sectors beyond the historical favourite that is fintech. Also, the possibility of landing the first YC-backed publicly-listed African startup (as Flutterwave is being tipped to hit that milestone in the near future) does fuel optimism.