Fintechs account for practically two-thirds of the $4.9 billion that was raised by African expertise companies throughout the previous yr. Fintech teams additionally dominate in phrases of funding that exceeds $50 million, with a 40% share of the complete quantity of tech companies.
The Covid-19 Factor
Out of the $4.9 billion in funding that was raised by African expertise firms in 2021, nearly two-thirds of this went to fintech firms, information 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 in the newest Africa Investment Report, the fintech dominance in 2021 finally culminated right into a interval with “the highest number of single, non-M&A [mergers and acquisitions] deals above $100 million” on document to this point. The report additionally reveals that Nigeria has the largest share of fintech companies that raised greater than $100 million.
Meanwhile, the report recommended that the Covid-19 pandemic may nicely be the foremost rationalization for the surge not solely in the funding of fintechs, however non-fintech companies as nicely.
“Logistics and energy follow by volume of funding but the most recent wave of digitization — perhaps boosted by Covid-19 — is propelling sectors such as e-commerce, agriculture and healthcare,” concluded the research report.
Funding Highly Concentrated
However, the similar report does concede that the majority of the funds raised in 2021 had been concentrated in a couple of tasks. The report explains:
Although extremely concentrated in a couple of circumstances, [which] solely represents lower than 3% of complete disclosed offers however captures over 55% of complete disclosed funding, this funding dimension carries vital weight and acts as a pull issue for a number of buyers.
Besides fairness financing, the Africa Investment Report information reveals that debt financing is more and more turning into a viable funding route. To help this assertion, the report factors to the undeniable fact that 6% of complete disclosed funding in 2021 was debt financing.
In phrases of the origins of the late-stage buyers, the information reveals 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 7.5%, adopted by South Africa 6%, and Canada which accounts for 4%.
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