With the release of our FY2022 Africa Venture Investment Report, we take a look at FinTech as one of the major drivers of funding in the region. Contact our sales team to learn more about this report and access the underlying data.
The African VC ecosystem raised $2,851M across 688 deals. The continent raised 97% of 2021’s funding and 98% of the deals amid quarterly declines owing to the impact of the global economic downturn. This impact came to light in Q2 while Q1 continued on the same trajectory as the funding highs seen over 2021 managing to capture 45% of the year's total funding. Moving forwards, the continent saw the funding deplete by almost 50% in Q2 while the deals saw a decline of 17%. While Q1 was a major driver of the funding, a sufficient amount of capital was also provided through MEGA deals (22%) where FinTech was the leading industry.
FinTech has been the hub of investment in Africa. The sector brought in almost $2Bn in funding in 2021 after observing a YoY growth of 10x compared to 2020. While funding has seen a decline this year, the sector still remains the most active industry on all fronts for the continent. Two of the four MEGA rounds closed in the continent were by FinTech startups, Flutterwave and Interswitch Group in Nigeria, offering alternative digital payments. A number of reasons can be attributed to the rapid growth of financial technology in the region. Africa is largely a cash-based economy and more than half of the population is unbanked or underbanked. The pandemic presented an opportunity for FinTech companies to digitize the relatively traditional financial sector and the continent witnessed the rise of a number of notable startups.
While Nigeria remains the country of focus leading the FinTech front both in terms of funding and deals, increasing interest has been observed in markets like Egypt, Kenya, Ghana, and South Africa with their respective governments working to incorporate initiatives directed at tech startups. There has been a rise in internet adoption, smartphone ownership, and a bulging youth demographic aiding the tech revolution of the region. Even though funding in FinTech receded by 26% in 2022, the sector remains ripe for innovation backed by the above factors. In 2022, the sector alone was responsible for bringing in almost 50% of the total capital deployed in the region. Moreover, in the past two years, the portfolio has expanded from digital payments to include blockchain and cryptocurrency platforms like VALR and Jambo which raised sizable funds in 2022.
What’s in the Report?
This yearly report provides a comprehensive overview and a deep dive into the African venture capital and funding investment space and includes the following:
• A 5-year analysis of Africa venture funding evolution, with a focus on 2022 country and industry performance benchmarks
• Top 20 investor ranking, together with their number of investments in 2022
• Top 20 startup funding rounds that were closed during the analyzed period, as well as the ticket size split of the entire deal flow
• A 5-year Africa exit evolution with the top 10 last exits in Africa-based startups
Who will benefit from the report?
This report is ideal for investors tracking startup activity, consultants looking to identify technology innovation trends, as well as government entities searching for investments.
This report was created with data from MAGNiTT, a comprehensive directory of technology innovation trends. The platform provides the following analytics tools:
• Investment directories, a comprehensive list of all startup venture funding across the Middle East, Africa, Pakistan, and Turkey
• Market Sizing Tools to visualize investment growth and trends across industries, geographies, and stage
• Comparison Tools to benchmark geographies, industries and investor performance
• Exit comparisons, looking at Mergers & Acquisitions from across the region
Learn how MAGNiTT's proprietary data can help your business. Contact us now!