Fintech remains African tech’s most powerful force when it comes to funding, but growth is everywhere, and the sector’s share of total investment actually fell in 2022.
This is according to the eighth edition of the annual African Tech Startups Funding Report released by startup news and research portal Disrupt Africa, which is available free to all as part of an open-sourcing initiative in partnership with Flat6Labs, MarketForce, 4Di Capital, Mercy Corps Ventures, Newtown Partners, and InsiderPR.
The report tells the story of an impressive 2022 in which more startups raised more funding than ever before, in spite of a global downturn in investments. In all, 633 startups raised a combined US$3,333,071,000 in 2022. This represented incredible growth. The number of funded startups increased by 12.2 per cent on 564 in 2021, while the total secured funding jumped 55.1 per cent on US$2,148,517,500 in 2021.
Fintech ascendant from a funding perspective
The fintech sector continues to power Africa’s startup funding revolution, posting another record-breaking year, yet its share of total funding declined as other space’s saw serious advancements.
In all, 205 fintech startups (32.4 per cent of the total, representing an increase of 11.4 per cent on 2021 figures), raised an extraordinary US$1,446,794,000 – 43.4 per cent of the continental total. This latter figure was up 39.3 per cent on US$1,038,456,500, which made up 48.3 per cent of the 2021 total.
These impressive figures were once again driven primarily by Nigeria, which accounted for almost 40 per cent of startups and US$666,392,000 (46.1%) of funding. Flutterwave (US$250 million), Moove (US$181.8 million) and Yellow Card (US$40 million) were the main fundraisers. Egypt also had a strong year, with key rounds raised by MNT-Halan ($150 million), Paymob (US$50 million) and Khazna (US$38 million).
Growth elsewhere
The relentless growth of Africa’s fintech space should not, however, detract from positive developments elsewhere. Indeed, even though total fintech funding increased, its overall share of investment fell. Non-fintech startups still raised the majority of the capital, with many sectors enjoying bumper years. Those included nearest competitors e-commerce and retail-tech, and e-health, which are well-established in second and third place and growing at a faster rate than fintech.
Seventy-four e-commerce and retail-tech startups raised a combined US$556,761,000 – contributing 16.7 per cent of the continent’s total pot, and representing growth of 70.7 per cent on the US$326,156,000 raised in 2021.
The e-commerce and retail-tech space has been enjoying a boom in funding since 2019, and in 2022 this trend continued for the fourth year running with 70.7 per cent growth in funding as above. 2021 had been up 271.5 per cent on the previous year’s total; while that in turn was up 85.6 per cent on 2019. The US$47,303,000 raised in 2019 was an increase of 283 per cent on the previous year. Over these years, retail-tech has emerged as an area attracting substantial investor interest, and has helped drive the growth in the sector.
E-health placed third in terms of startups funded, and fourth for total funding secured; with 53 startups (8.4%) raising a combined US$189,103,000 (5.7%).
In fact, 11 sectors had faster growth rates in terms of total funding in 2022, though admittedly the likes of restaurant-tech and auto-tech are developing from a very low base. Nonetheless, with funding snowballing more quickly than fintech in areas such as entertainment, marketing, transport, recruitment and agri-tech, as well as e-commerce and health, we can expect to see fintech’s lead further cut in the coming years.
For more information, or to download the report, please visit disrupt-africa.com/funding-report, or email Gabriella on gabriella@disrupt-africa.com, or Tom on tom@disrupt-africa.com.
About Disrupt Africa
Disrupt Africa is the one-stop-shop for all news, information and commentary pertaining to the continent’s tech startup – and investment – ecosystem. With journalists roaming the continent to find, meet, and interview the most innovative and disruptive tech startups, Disrupt Africa is a true showcase of Africa’s most promising businesses and business ideas. Its research arm releases in-depth reports on various aspects of the African tech startup ecosystem. Details here.
About Flat6Labs
Flat6Labs is the MENA region’s leading seed and early stage venture capital firm, currently running the most renowned startup programs in the region. Flat6Labs invests in innovative and technology-driven startups, enabling thousands of passionate entrepreneurs to achieve their daring ambitions and ultimately becoming their institutional co-founders. Launched and headquartered in Cairo since 2011, Flat6Labs has multiple offices across the region; with ongoing plans to expand into other emerging markets.
About MarketForce
MarketForce is a pan-African technology company that is building the super app for Africa’s 100 million merchants. Launched in 2019, MarketForce is a fast-growing YC-backed company running an asset-light business model. Having raised the largest Series A round in East and Central Africa in 2022, MarketForce is now operational in five markets in Sub-Saharan Africa (Kenya, Uganda, Tanzania, Rwanda, and Nigeria), and has over 200,000 merchants and nearly 200 consumer brands trading on its platform.
About 4Di Capital
4Di Capital is an independent venture capital fund manager based in South Africa’s “Silicon Cape”, specialising in high-growth technology venture opportunities, at the seed, early-and growth-funding stages.
About Mercy Corps Ventures
Mercy Corps Ventures invests in and catalyses venture-led solutions to increase the resilience of underserved individuals and communities. Founded in 2015 as the impact investing arm of global development agency, Mercy Corps, we’ve supported 41 early-stage ventures to scale and raise over US$333.9 million in follow-on capital. Our portfolio is 51 per cent female-founded and centres around resilience-building solutions in adaptive agriculture and food systems, frontier fintech, and climate smart systems, so that those living in frontier markets can withstand disruption and plan for the future. Through capital and support, piloting new approaches, action-oriented insights, and rigorously managing impact, we catalyse the ecosystem toward smarter, more impactful investments.
About Newtown Partners
Newtown Partners (newtownpartners.com) is the family office of successful startup entrepreneurs, Llew Claasen and Vinny Lingham. It invests across a range of alternative and traditional asset classes, especially early-stage venture capital to back startups utilising emerging technologies and disruptive business models. Since 2019, it has worked with pan-African and European logistics player, Imperial (a DP World company) to enable their corporate venture capital programme. Newtown Partners operates out of offices in San Diego, U.S. and Cape Town, South Africa.
About InsiderPR
InsiderPR is a leading emerging market public relations firm helping visionary founders and investors across Africa and the Middle East tell their stories to the world. Using our “no-fluff” Write-Speak-Meet model, Insider has helped shape the narrative and increase the public profile of over 125 of the world’s leading emerging market companies, including Flutterwave (YC ‘16) and Swvl (NASDAQ-listed), as well as venture capital firms, funds, and government agencies. Our US and Africa-based team provides strategic communications advisory around the clock focusing on thought leadership.
