Startups in Four African Countries Account For 75 Percent of Funding Raised in 2022

Recent reports reveal that startups in four African countries, Nigeria, Kenya, Egypt, and South Africa, accounted for 75 percent of the total fund raised in 2022 in Africa.

Startups in Nigeria accounted for ($1.2bn), Kenya ($1.1 bn), Egypt ($820m), and South Africa accounted for ($550m) adding to the total sum of $4.85bn that was raised in 2022.

Analysis from database and Insights predict that Africa could exceed $5bn in funds raised, noting that the fund raised in 2022 saw an 11 percent year-on-year increase from 2021.

Meanwhile, these four African countries (Kenya, Nigeria, Egypt, and South Africa), have been reported to dominate Africa’s funding startup scene.

The vast majority of venture capital in Africa is often scooped by these four countries fondly referred to as “Africa’s big four”.

In a 2021 report by African Development Bank (AFDB), it disclosed that these four countries accounted for about a third of the continent’s startup accelerators and incubators, and also received 80% of foreign direct investment (FDI) into the African region.

Also, a disrupt Africa report revealed that start-ups in the “big four” raised a combined $1.9 billion in 2021, about 92.1% of the overall total investments raised in Africa for that year.

Their funding has continued to increase significantly over the years from 79.4% in 2018 to 87.5% in 2019, to 89.2% in 2020.

These four countries have been reported as favorites amongst investors, due to the fact that they innovate faster than other African countries when it comes to startup investment and funding in large part as a result of their large economies and sizeable populations.

On the other hand, Africa’s startup funding in 2022 was dominated by fintechs, accounting for 37 percent of deals.

This doesn’t come as a surprise that for so long, Fintech startups have continued to dominate Africa’s funding scene.

In the year 2021, fintechs dominated the fundraising scene, accounting for nearly $3 billion, or two-thirds of all the investment realized by startups across the continent.

Reports reveal that the amount was also more than double the $1.35 billion investment that fintechs in Africa raised in 2020, and triple the amount in 2019.

Given the deepening of mobile phone usage and internet penetration in Africa, it has been predicted that funding for fintechs will increase year-over-year.