With $6.5 Billion Raised In 2022, Africa’s Resilient Tech Ecosystem Is Still Growing



Partech Africa, a VC fund dedicated to African technology startups, has released its annual report on Africa Tech Venture Capital. Despite the global VC downturn, the African tech ecosystem grew faster than all other markets globally, according to the report, which aims to provide a practical picture of the ecosystem’s state.

Total funding invested in tech startups on the continent reached $6.5 billion, up 8% from 2021, and was spread across 764 deals, up from 724 rounds in 2021. According to the report, debt funding more than doubled in volume, reaching $1.55 billion through 71 transactions [65% YoY growth]. In comparison, equity rounds fell slightly, with 653 African tech startups raising $4.9 billion [-6%] in 693 equity rounds [2% YoY growth].

In terms of equity funding, the report found that the ecosystem was still accelerating in Q1 and Q2 of 2022 compared to Q1 and Q2 of 2021, with the YoY comparison showing Q1 and Q2 at +127% and +83%, respectively. The global VC slowdown, however, stifled activity growth in Q3 [-65% YoY] and Q4 [-35% YoY]. Fundraising activities remained flat in 2022 across all stages. Seed+ ticket sizes averaged $1.4M in 2022 [+12% YoY], while Series A remained unchanged at $8.5M. Later stages reverted to 2019 levels, with Series B and Growth round sizes falling by -23% and -50%, respectively, year on year. Furthermore, the number of megadeals [over 100M] fell significantly in 2022, with only seven deals compared to 14 in 2021.

“2022 was a particularly challenging year for the venture ecosystem worldwide, as venture and growth investors scaled back their investment by a third,” said Tidjane Deme, General Partner at Partech, at the launch of the annual report. By contrast, our report found that the African tech ecosystem has shown great resilience, with more investors doubling their commitment to the continent by investing in local teams and funds dedicated to the market, proving to be the best way forward.”

Overall, Nigeria, South Africa, Egypt, and Kenya continue to be the top investment destinations in Africa, accounting for 72% of total volume. Despite a 36% decline from 2021, Nigeria retained the top spot, attracting $1.2 billion in capital; South Africa, Egypt, and Kenya each attracted more than $0.7 billion, with Ghana rounding out the top five with just over $0.2 billion. In total, 28 countries received equity funding in 2022, with 13 of them located in Francophone Africa.

In light of the market downturn, the report’s findings also revealed that Fintech, which has traditionally attracted large investments, was the most impacted by the decrease in the number of large rounds. Fintech, on the other hand, continues to be the most funded sector in Africa, accounting for 39% of total equity volume [$1.9B] and 45% of total debt volume [$691M]. Other sectors experienced significant growth and gained a significant share of equity funding activity this year, most notably Cleantech, which made a strong comeback with 18% of total equity funding at $863M [+347% YoY], but also 39% of total debt funding at $605M.

The report’s findings also show:

  • Female-founded startups raised 22% of all equity rounds in 2022, up 2 percentage points from 20% in 2021. They also contributed $644 Million or 13% of the total equity funding, down 3 percentage points from 16% in 2021.
  • Outside of the top 4 countries, Ghana ($202 million), Algeria ($150 million), Tunisia ($117 million) and Senegal ($105 million) were the only other countries that broke the $100M funding mark.
  • Despite a slowdown in the growth rate of equity investors, Africa’s tech ecosystem attracted 1,149 unique investors for the first time [+29% YoY vs 2021]. African tech has seen more investors committed, with 89 participating in 5 or more deals [compared to 65 investors in 2021].
  • The number of debt investors active on the continent is growing 2.5x YoY, with a good mix of local debt institutions, international lenders with emerging market vehicles and Development Finance Institutions.

“Much of our methodology has remained the same over the years, and we can thus provide a snapshot of how the African continent has evolved over the years,” said Cyril Collon, General Partner at Partech. Nigeria and the fintech vertical have maintained their top positions; however, in an environment where equity funding is more difficult, debt has proven to be a solid alternative source of African tech startups in 2022, indicating a maturity within each sector.”

Partech Africa, based in Dakar, is Africa’s largest venture capital fund dedicated to technology startups. The VC has invested in 17 African startups, including Wave and TradeDepot, with a focus on Late Seed, Series A, and B equity rounds in startups that are changing the way technology is used across multiple sectors, including education, mobility, finance, and healthcare. Using the same methodology as previous years, the seventh Partech Africa annual report on African tech start-ups includes only equity rounds with a total value greater than US$200K.


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