More African startups got funded in 2022 but raised less money; Kenya stands out

 More African startups got funded in 2022 but raised less money; Kenya stands out

The African startup ecosystem withstood the global venture capital investment slowdown, standing as an outlier in 2022, though it did not go totally unscathed from the funding winter for tech startups.

While global venture funding in 2022 reached $445 billion, down by a little over a third from the $681 billion in 2021, according to Crunchbase, African tech startups came close to matching the previous year’s peak.

Tech startups in the continent attracted $4.91 billion in equity funding last year, down a tad from the 2021 tally, even as the number of deals rose marginally, as per data compiled by VC firm Partech.

This data includes around $1 billion in funding that was only partially disclosed or remain confidential and only includes transactions worth $200,000 or more, excluding all grants, awards, prizes, Initial Coin Offerings (ICOs), non-equity/technical assistance, post-IPO, private investment in public equity (PIPE) and all M&A deals.

In total, 653 tech startups in the continent raised equity funding last year across 693 funding rounds, as against 640 startups that secured funding in 681 rounds in 2021.

If one factors out the weekends, this translates into one African startup getting funded every nine and half hours of the working week through 2022!

But two trends stand out.

One was the rise of debt funding. The value of debt funding more than doubled to $1.55 billion across 71 transactions as against 43 deals worth $767 million in 2021.

As a result, debt and equity funding for African startups grew over 8% to $6.5 billion through 764 rounds.

Second, if we drill deeper into the granular data, the strain of funding slowdown is showing in Africa, too. The continent started on a strong footing in the first half, with deal counts galloping 51% and 46%, respectively, in Q1 and Q2 over the corresponding period of 2021, and deal value doubled in the first half of the year. But investors tightened their purse strings in the last six months.

Year on year deal volumes shrank by a fifth in Q3 and dropped by a third in Q4, while the deal value more than halved in Q3 and declined by over a third last quarter.

Indeed, the whole of 2022 did not see any new unicorn being created in the continent after half a dozen ventures attained the milestone the previous year.


Nigeria remained the top VC investment destination in Africa, leading in both funding and number of equity rounds. But the total funding amount was less concentrated with Nigeria accounting for 23% of total compared to 34% in 2021.

As much as 72% of the money went to the ‘Big Four’ countries. In total, 28 countries in the continent attracted VC funding, nearly half of this went to Francophone countries.

One interesting aspect here was that Kenya overtook South Africa in terms of the number of deals to grab the number three slot behind Nigeria and Egypt.

In terms of value of funding, Nigeria saw a big drop and South Africa startup deal value was almost flat. But entrepreneurs in Egypt and Kenya grabbed much more money than the previous year.

Ghana, Morocco, Senegal, Uganda, Tunisia and Cote D’ivoire saw 10 or more startups raise capital last year. Rwanda, which also saw 10 startup deals in 2021, missed the mark last year.


In 2022, fundraising activity remained flat across all stages, except a 33% increase in Series B deals. At the same time, larger round sizes (Series B and growth) were significantly reduced in size, seeing a 23% and 50% drop in average sizes, respectively. This translates into a normalization of funding rounds after the bull market, while the early stage continues to deepen, driven by fundamental trends, according to Partech.

The difficult market conditions had a very different impact on earlier stages. At $1.4 million, seed+ ticket sizes average slightly higher in 2022 than in 2021 (+12% YoY) while Series A remained essentially the same at $8.5 million. However, it was clearly a year where startups at Series B and later stages closed smaller rounds than usual. Later stage round sizes are now back to 2019 levels.

Activity was flat at all stages in 2022 except for Series B, where there was a significant increase in deal count (+33%). Across seed, Series A and growth Stages, the deal count remains exactly flat compared to previous year, with 506 deals at seed stage (vs. 507 in 2021), 108 deals at Series A (vs. 109 in 2021) and 23 growth deals (same as 2021).

Vivek Sinha

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