Report: Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021

Fintechs account for almost two-thirds of the $4.9 billion that was raised by African expertise companies through the previous 12 months. Fintech teams additionally dominate by way of funding that exceeds $50 million, with a 40% share of the overall variety of tech companies.

The Covid-19 Factor

Out of the $4.9 billion in funding that was raised by African expertise firms in 2021, virtually two-thirds of this went to fintech firms, knowledge from a brand new report has proven. In phrases of offers whereby the capital raised exceeded $40 million, fintechs accounted for 40% of such offers.

As proven within the latest Africa Investment Report, the fintech dominance in 2021 finally culminated right into a interval with “the very best variety of single, non-M&A [mergers and acquisitions] offers above $100 million” on report to this point. The report additionally exhibits that Nigeria has the largest share of fintech companies that raised greater than $100 million.

Meanwhile, the report instructed that the Covid-19 pandemic might properly be the principle clarification for the surge not solely within the funding of fintechs, however non-fintech companies as properly.

“Logistics and power observe by quantity of funding however the latest wave of digitization — maybe boosted by Covid-19 — is propelling sectors akin to e-commerce, agriculture and healthcare,” concluded the research report.

Funding Highly Concentrated

However, the identical report does concede that many of the funds raised in 2021 have been concentrated in a couple of initiatives. The report explains:

Although extremely concentrated in a couple of circumstances, [which] solely represents lower than 3% of whole disclosed offers however captures over 55% of whole disclosed funding, this funding dimension carries vital weight and acts as a pull issue for a number of traders.

Besides fairness financing, the Africa Investment Report knowledge exhibits that debt financing is more and more turning into a viable funding route. To help this assertion, the report factors to the truth that 6% of whole disclosed funding in 2021 was debt financing.

In phrases of the origins of the late-stage traders, the info exhibits that the United States is by far the largest supply of capital for Africa tech firms with a 62.5% share. In a distant second place was the United Kingdom, which had a share of seven.5%, adopted by South Africa 6%, and Canada which accounts for 4%.

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