2022 was another record year for Africa’s startup scene as the sector saw $5.4 billion in venture funding.
This is part of data collected by the market intelligence platform, Briter Bridges, which has been covering the growth of Africa’s tech ecosystem since 2018.
According to Briter Bridges’ 2022 Africa Investment Report, the total value of investments ended up bettering the $5.2 billion raised in 2021 as the total number of deals increased from 790 to 975.
Despite the eventual record, funding activity which had shot up as Covid-19 faded in 2021 began again to slow in Q1 2022. Briter puts this down to markets that were shaken by tanking stocks, inflation, pricing crises, and lay-off announcements.
This was evident in the crypto sector where the collapse of the crpyto platform, FTX, in late 2022, affected several startups that it was investing in on the continent.
FTX’s African portfolio included 7 startups, with NestCoin and Chipper Cash among those that announced lay offs soon after the collapse.
Despite this scenario and other shocks that slowed growth in 2022, the tech sector’s steady growth is seen as a good sign.
“Our decision to emphasize to consider the 10-year timeframe is aimed at preventing de-contextualised biases driven by an exaggerated focus on short-term events e.g the crash of the crypto market or the peak of COVID -19,” the report says.
On a sectoral break-down, the fintech sector received the largest share of funding, coming back to lead after 2 year where clean-tech startups were the most attractive.
Finally, while the value of investments continues to increase, the share was just 1% of total VC investments in 2022.
Startups from 4 countries – Nigeria, Kenya, South Africa and Egypt – also account for 75% of all of the funding in 2022 while the 25 largest rounds raised all year accounted for more than half of the total figure, Briter said.
“Out of these few deals, the vast majority is led by overseas investors that are not ‘committed’ to having an African portfolio or with a physical presence on the continent.”
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