The Status of VC Funding in Africa

Across the globe, startups raised much less venture funding in the second quarter of this year than in the same period in 2021. Africa was the only exception to this trend. No other region came close to the continent’s funding growth between January and June. It closed the first half of 2022 at $3.5 billion, a 133% increase from the first half of last year. Last year, Africa recorded $5.2 billion in funding across 650 deals. However, a report by the African Private Equity and Venture Capital Association (AVCA) projects that figure to reach $7 billion by the end of this year, should Africa maintain that momentum. Notably, Africa raised only 1% of global VC funding this year, a reminder that Africa still gets the bare minimum share of the world’s startup funding largesse. However, the funding momentum is slowing down in Africa. According to The Big Deal, a newsletter that tracks fundraising in Africa, VC funding for African startups decreased by 53% in the third quarter of this year compared to the same period last year. It marked the end of six quarters of year-on-year quarterly growth and the first quarter since Q3 2021 in which Africa failed to raise $1 billion. This fact brings AVCA’s lofty projection under question. But whether or not we reach the $7 billion mark, will this be another record year? The answer lies in Africa’s tech progress for the year.

SOURCE: VENTURES AFRICA