VC investments in Africa Drop to $6.6bn

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VC investments in Africa Drop to $6.6bn
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VC investments in Africa Drop to $6.6bn

In 2022, total venture capital investments in Africa dipped slightly to $6.5 billion but avoided the sharp drop seen in most other global regions, data released by an industry group showed on Thursday.

The investments spread over 853 deals, represent a one per cent decline from 2021 – a record year in Africa – according to the African Private Equity and Venture Capital Association (AVCA), which promotes private investment on the continent.

That compares to a 32% contraction in global venture capital.

“When evaluated against any year other than the stratospheric 2021, industry activity in Africa’s venture capital ecosystem was very strong,” AVCA wrote in a report accompanying the data.

Venture capital investments hit a record in the first half of 2022 and would go on to make up two-thirds of deals by value for the year, offsetting an anaemic second half.

While African startups still attracted just a small fraction of the $445 billion invested globally, the continent has seen steady growth, propelled largely by investments in financial sector companies.

The sector accounted for 31% of deal volume and 42% of deal value in 2022, the data showed. Overall, the median deal size across all investment stages was $2 million, though 15 large deals in companies attracted a combined $2.2 billion.

Sun King, a provider of off-grid solar energy products in Africa and Asia, raised $260 million in a series D funding round.

Africa-focused fintech firm Flutterwave raised $250 million. And d.light, a Kenya-based off-grid solar company, brought in $238 million in venture debt. West Africa remained the most active region for venture capital investments, propelled by Nigerian startups.# VC investments in Africa Drop to $6.6bn

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