Fintech startups were able to secure $1.45 billion in funding in the past year. The sector’s total capital raise represented an increase of 39.3% from the approximately $1.04 billion that was secured in 2021. Despite this increase in fintechs’ overall funding, the sector’s share of total capital raised by African tech startups still dropped from 48.3% seen in 2021 to 43.4% in 2022.
As was the case in 2021, Nigeria is again the best-funded country after 180 of its startups raised a combined US$976,146,000 or 29.3% of the African continent’s total. Both the West African nation’s number of funded startups and their share of the continent’s total dwarfs those of Egypt, Kenya, and South Africa.
While the year 2022 was a record-breaking year of funding for countries like Ghana and Tunisia, the continent’s so-called big four namely Egypt, Kenya, Nigeria, and South Africa again accounted for a disproportionate share of the continent’s fintech startup funding. However, the study data seemingly points to more evenly distributed startup funding in the future.
Whereas in 2021, 80.1% of funded ventures hailed from either of Egypt, Kenya, Nigeria, or South Africa, in 2022 that declined to 75.8%.
Meanwhile, the proportion of total funding raised by these markets is also decreasing. In 2022, ‘big four’ startups raised 80.8% of the annual total, down from a bumper 92.1% in 2021,” the Disrupt report stated.
Concerning the most popular funding methods, out of the 310 disclosed funding rounds, more than 70% of these “were at the seed and pre-seed stage
Meanwhile, the study findings suggest that debt financing is the least favored funding method with just 33 from a total of the 633 startups having revealed an element of debt as part of any of their rounds. While this total is marginally higher than the 26 seen in 2021.