Fintech businesses on the continent have seen a huge surge in capital in 2022, despite the sector’s share of the African continent’s total funding dropping from 48.3% in 2021 to 44.4% in 2022. The amount of capital raised by Fintech firms amounted to $1.45 trillion, up 39.3% from the $1.04 trillion raised in 2021.
Big Four’s Share of Funds Declines
The Disrupt 2022 African Tech Startup Funding Report states that the majority of the funding is being concentrated in the continent’s “Big Four” markets – Egypt, Kenya, Nigeria and South Africa. These four countries accounted for 80.8% of the total funding, a slight decrease from the 92.1% they accounted for in 2021. This could be indicative of a trend towards a more equitable distribution of capital.
Nigeria was the most successful country for funding, with 180 of its startups raising a total of $976,146,000 or 29.3% of all the capital raised on the continent. The vast majority of the funding rounds were at the seed and pre-seed stages, with only 5% of the total funding rounds being classed as series B or greater.
Debt financing remains unpopular with investors, with only 33 out of 633 startups revealing that they included a debt element as part of their funding round. This is a slight increase from the 26 recorded in 2021, and could be an indication that startups are still doing well in spite of the pandemic.
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