Tech startups funding in Nigeria, others drop from $1.2b to $367m

By Adeyemi Adepetun 

19 October 2022   |   3:43 am

•Egypt, Nigeria, South Africa are top African venture capital markets

Funding for technology startups in Nigeria, South Africa, Egypt, and Kenya among other African countries dropped in quarter three.

   

Data from CB Insights revealed that venture capital flows into African start-ups fell to $ 367 million for the third quarter of September, compared to the second quarter of June. Funding in the comparative quarter of 2021 amounted to $1.2-billion.

   

Analysis from ItwebAfrica showed that the level of funding for and value in deals with African tech start-ups fell by 54 per cemt and 13 per cent respectively on a quarter-on-quarter basis for the period to the end of September 2022, despite continued interest in e-commerce, Internet software and Fintech.

   

The report noted that the number of venture financing deals for African tech start-ups also fell 13 per cent from 135 to 117. In the same quarter last year, deals for regional start-ups topped 140.

    

CB Insights identified Launch Africa, with investments in six companies, UM6P Ventures (four companies invested in) and AfricInvest, with three private equity deals as the top investors in African tech ventures during the third quarter of 2022 period. Other investors included Entrepreneurs for Entrepreneurs Africa, Huobi Ventures, KuCoin and LoftyInc., among others.

    

According to the report, Egypt, Nigeria and South Africa remain the top three African venture capital markets.

     

Specifically, it revealed that TeamApt ($50 million), Scorefam ($25 million and VendEase ($7 million) were the top venture capital investees in Nigeria.

 

In Egypt, e-commerce companies Homzmart, with $ 23 million, Cartona, which raised $ 12 million and one order, which bagged $ 7 million had the highest capital raises for the period under review.

   

South Africa’s iiDENTIFii, with $15 million, SweepSouth $11 million and DataProphet, which raised $ 10 million topped the biggest funding raises list in the country.

   

It disclosed pointed out that the Big Deal, Africa-based venture capitalists are stepping up funding for regional start-ups.

   

According to the report, “more than half of $1 million deals in Africa since 2019 have had at least one Africa-based investor” as one of the main investors.

“Africa-based investors are more active in deals with start-ups headquartered in one of the Big Four (involved as the main investor in 59 per cent of $1m+ deals since 2019) compared to those headquartered elsewhere (37 per cent). They are particularly active in Egypt (67 per cent), South Africa (65 per cent) and Nigeria (59 per cent); less so in Kenya (47 per cent).”