Nigerian Startups Attract $1.2bn from $4.8bn Inflow to Africa in 2022

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By Adedapo Adesanya

Nigeria remained the most dominant force when it came to funding raised in 2022 as the country saw a total of $1.2 billion injected by investors in startups, according to estimates seen by Business Post.

In a report, Africa: The Big Deal, Nigerian startups, in the year under review, saw 286 deals worth more than $100,000.

This is even as there was a 29 per cent drop in funding into the country compared to $1.7 billion recorded in 2021. For context, Nigeria recorded $440 million in 2020 and $704 million in 2019.

The country recorded two $100 million+ mega deals in 2022, led by Flutterwave’s $250 million Series D in February and Interswitch’s $110 million round announced in May. This is a drop compared to five deals on record in 2021.

“Nigeria is still the largest market by far in terms of funding (286 $100k+ deals, +14% YoY | $1.2bn, -29% YoY),” the report noted.

In 2022, Western Africa was the region that attracted the largest share of both fundings as it recorded 37 per cent of the investments that came into the continent. It also held the lead in the number of $100,000+ deals (37 per cent also) on the continent.

Overall, Nigeria has seen its regional hegemony further challenged in 2022, with its share of regional funding down 17 percentage points to 68 per cent. In 2021, it had 85 per cent, and it was 88 per cent in 2020, while it stood at 92 per cent in 2019.

The West African region topped the charts in 2021, with 37 per cent of deals and an even higher share of funding then (43 per cent). However, last year, the numbers went down 12 per cent to $1.8 billion compared to $2 billion in the preceding year.

East Africa continued in the second spot as it raked in $1.2 billion.

However, the report fingered noted that most of this dip recorded by Nigeria is due to Ghana’s very strong performance in 2022. The country recorded 47 deals over $100,000 for a total of nearly $400 million (estimating PEG Africa’s acquisition by Bboxx at $200m), nearly 8x times more than in 2021. Ghana ranked #5 at the continent level in terms of funding raised in 2022.

Senegal (#6) followed with 19 $100,000+ deals (same as 2021) and $112 million raised (-50 per cent Year-on-YearoY). Its unicorn, Wave, continued to dominate the numbers, though with 82 per cent of the amount raised in 2022 (with $90 million+ in debt secured), and 90 per cent in 2021 (through its $200 million Series A round).

Further behind is Côte d’Ivoire, with a stable amount of $100,000+ deals (12) but saw a 300 per cent increase in funding to $34 million compared to  $11 million.

Togo recorded $10 million following Gozem’s $10 million deal with the International Finance Corporation (IFC).

The report noted that while Mali, Sierra Leone, and the Benin Republic also raised some funding, seven countries in the region recorded no deal at all over $100,000 in 2022.

“Finally, it is worth noting that Western Africa punches above its weight with a higher percentage of funding (37%) than its share of the continent’s population (30%) or GDP (27%). The same goes for its heavyweight Nigeria (25% of Africa’s funding vs. 15% of its population and 17% of its GDP).

“The region averages $4.2 of funding raised per capita, which is over the continental average ($3.2pc). For Nigeria, this number stands at $5.5pc,” the report noted.

Continent-wide, the total amount of funding recorded by African startups amounted to $4.84 billion in 2022, a 7.6 per cent increase from $4.46 billion recorded in 2021.

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