Africa: The Big Deal released its 2022 data about funding raised by African startups. For starters, African startups raised at least $5bn in 2022, which is almost $500m more than they did in 2021. This makes Africa, the only ecosystem that has seen positive growth in annual funding as the economic downturn ravaged the world which forced investors to slow down on writing checks. Eventually, most startups entered survival mode with a focus on profitability and improving runway instead of growth.
As has been the case over the previous years, the continent’s big four of Nigeria, Kenya, Egypt and South Africa accounted for 755 of all funding with both Nigeria and Kenya crossing the $1bn mark in funding. Nigerian startups raised $1.2bn, which was a 12% drop from 2021 funding. Kenya enjoyed a renaissance. Startups there raised $1.1bn in funding which was an 86% growth from the 418m raised in 2021. Egypt ($820m) and South Africa ($550m) rounded off the top 10.
Ghana claimed the best of the rest title, raising $391m. The likes of Senegal (driven by Wave Mobile Money), Tunisia (driven by Instadeep) and Algeria (driven by the Yassir deal) were all able to raise at least $100m in annual funding. The East African Pair of Uganda ($70m) and Tanzania ($80m) also raised impressive figures.
Fintech emerged as the most funded sector, accounting for 37% of all funding. However, e-commerce in particular is pushing to claim this title. There were 8 mega deals in 2022, a drop of over 50% from the 15 realized in 2021 while Launch Africa Ventures was the most active investor with the largest deal being SunKing’s $260m Series D.
Breaking down the funding on a regional basis shows that West Africa edged out East Africa for the top spot. West African startups raised $1.8bn, a drop of 12% Y-O-Y, while East African startups raised $1.2bn, a growth of 115%. North Africa came third with $1.1bn, a 62% Y-O-Y growth. Southern African startups managed to raise $600m of which $550m was raised by South Africa alone. Lastly, Central Africa raise a paltry $50m, but this was a 115% growth as it continues to lag behind the other regions due to the lack of a standout nation that could attract significant funding and anchor the region the way Kenya anchors Eastern Africa for example.