African Startups Raise Over $1bn in Past Two Months

2022 has started off really promising for African startups with over $1bn raised in the first two months. This figure is more than half the cumulative funds raised in 2021.

Although 2021 was also a revolutionary year for many startups, this year is seeming quite promising. In 2021, the African tech space became three times larger than its previous value – scoring a record-breaking 2021 with total funding summing up to $2 billion.

Report by Disrupt Africa reveals that 564 African startups raised a combined $2,148,517,500 in 2021 – a record already nearing being defeated in 2022. In January, 44 startups are said to have raised more than $400m in funding while over $500 million was raised by 47 African startups in February. Summing up that figure with the total number of undisclosed funding raised by 19 startups in the past two months, the continent’s record in 2021 seems to be on its way to being broken early.

The report by Disrupt Africa reveals that the 110 startups have raised an estimated $1,123,556,000 between January and February 2022. The heavy numbers are linked to countries like Nigeria, Kenya, and South Africa. With Nigeria leading with 33 startups raising a combined $364,598,000 (32.5 per cent of the total) followed by twenty Kenyan startups that have raised $223,450,000 (19.9 per cent of the total), and 16 South African startups having secured $219,930,000 (19.6 per cent of the total).

Egypt is also responsible for a reasonable amount of investment. Although 2022 is seeming to be relatively slow for the North African country, 21 startups from Egypt has raised a total of $102,220,000 (9.1 per cent of the total) this year so far.

According to the data, fintech remains the main driver for investment in the continent with 34 of the 110 companies being fintech startups – raising a total of $434,296,000 in 2022 so far (38.7 per cent of the overall tally).

Projections with ongoing Russia-Ukraine Crisis

Although all seems to be going fine in the African tech space, the effects of the Russia-Ukraine conflict has affected major activities in the venture capital market globally. Since the Russian invasion last Thursday, 24th February, it’s been reported that funding announcements have reduced drastically.

Investors King recalls that following last Thursday’s attack, only 154 companies globally announced seed (early or late-stage) funding from the venture capital market or Angel Investors. Of the 154 startup companies, only 8 are from Africa.

This indicates that the ongoing crisis may be a threat to the growth projection of not only African startups but the global startup and venture capital market.