According to Bloomberg, African startups are headed on a path to reach an all-time high funding record of $7 billion this year, a 35% upsurge from the $5.2 billion raised in 2021. This is despite a slowdown on a global scale, with the continent being the only market to see more than single-digit growth in the period.

The venture capital deals in Africa, as reported by the African Private Equity and Venture Capital Association (AVCA), reached $3.5 billion in the six months through June 2022, more than double the amount in the same period of the previous year. The funds were raised by 300 companies, with 27% of the companies led by female founders, or having at least one female founder.

The steep climb in investments is reportedly driven primarily by African startups that are raising funds to expand on the continent organically or through acquisitions. Fintech startups continued to attract the lion’s share of investment inflows, accounting for 89% of financial sector transactions. While West Africa accounted for the greatest proportion of deals by volume, East Africa saw the greatest increase in its share of deals by volume when compared to the previous year.

However, there is also a possibility that the continent will not continue on this continual upward trend, as private capital fund-raising declined 20% in the first half of 2022 to $700 million. According to AVCA, the decline conveys a more difficult and competitive fund-raising environment for fund managers globally, as well as concerns about a global economic downturn.

Source: Bloomberg, AVCA


The opinions expresses here in the post "Fund Raising for African Startups on Track to Hit $7 billion in 2022" are those of the individua's contributor(s) and do not necessarily reflect the views of Business Info Ethiopia , BIE Intelligence PLC, its publisher, editor, or any of its other contributors.


Hanna is an aspiring economist in her final year at Addis Ababa University. She has written hundreds of insightful daily stories, analyses, and features about the Ethiopian economy and beyond.

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