Africa startups set record with $3.1bn raised in first half

African startups raised $3.1 billion in the first half (H1) of 2022, more than what they had raised in H1’2021 and H1’2020 combined, which amounted to $1.7 billion, setting a record in startup investment.

Funding raised in H1’2022 saw a double increase to what was realised in H1 of 2021, 2020, 2019, and 2018 which were $1.2 billion, $531 million, $454 million, and $169 million respectively.

Africa startup realised $1.3 billion in the second quarter of 2022, which adds up to $3.1 billion in the first half of the year, in terms of fundraising Q2 2022 was the strongest ecosystem ever, also H1 2022 recorded the strongest H1 ever.

Since 2019, startups in Nigeria, Kenya, South Africa, and Egypt have raised 83 percent of all funding and signed 78 percent of all $1 million-plus deals., and there is no indication that things will change anytime soon, as these percentages have been very consistent over time.

According to Max Cuvellier, GSMA’s head of mobile for development (M4D), “There’s no denying that the context is difficult and between inflation, food insecurity, bear markets, supply chain issues, and more, African start-ups will be impacted in their growth and capacity to raise.”

However, the third quarter (Q3) will be decisive, especially given how strong it was last year, but there is definitely room for optimism. Let’s hope that future figures don’t contradict me too much, he said.

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In the first ten days of H2, African start-ups have already raised nearly $150 million, also the current funding boom in Africa will continue to expand rapidly before the end of the year.

Of all the sectors, fintech remains the most funded tech segment in Africa. 32 percent (half) of the funding realised in the H1 of 2022 went to fintech startups, which is higher than in previous years where most of the fintech funding was raised in H2, 89 percent of it in 2019, and 76 percent in 2020.

Cumulatively, start-ups in Africa have already raised $2.25 billion in the first four months of the year. This is 2.5 times the amount that had been raised by the end of April in 2021, 5 times in 2020, and 8 times in 2019.

Among the largest beneficiaries of fintech capital raised are Opay, Flutterwave, TymeBank, Jumo, MNT Halan., and others. given the incremental funding for fintech in Africa over the years, capital injected into these startups is only likely to increase with deepening mobile phone usage and internet penetration.