Startups, regardless of time and season, are bound to raise capital. And over the last three years, many startups in Africa have caught the attention of international investors. According to various sources, Africa seems to be making significant progress in building startups, with Nigeria, South Africa, Kenya and Egypt leading the continent and fintechs reportedly being the most funded sector.  

Highlighted by visits from tech powerhouses such as Jack Ma and Jack Dorsey, African startups were able to raise about $2 billion in investments. This figure plummeted due to the Covid-19 pandemic as the continent received about $1.3 billion in investment in 2020. Africa then celebrated a record-breaking year as startups raised between $4.5 billion – $5 billion in 2021. 

How has the African continent performed in 2022 so far? 
Going into the year on the backdrop of a record-breaking 2021, analysts poised Africa to break the $5 billion mark in 2022. Despite global investors majorly taking a pause due to the rising inflation globally, Africa managed to raise $1 billion in the first few weeks of 2022 and $2.25 billion by the end of the first quarter of the year. By the second quarter of 2022, African startups funding had risen to $3.1 billion as the H1 ended. 

However, in the months of July, August and September and with inflation continuing to bite harder, the continent has only secured $247 million, $228 million and over $134 million, respectively. With just two weeks to go in October, the continent has recorded $66 million so far continuing the trend of the second half of the year. 

Looking forward 
With projections that Africa might not reach the $7 billion mark as targeted by the African Private Equity and Venture Capital Association (AVCA), the continent should definitely beat the 2021 mark of between $4.5 billion – $5 billion. 

Leave a Reply

Your email address will not be published.