Report: Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021

Fintechs relationship for astir two-thirds of the $4.9 cardinal that was raised by African exertion firms during the past year. Fintech groups besides predominate successful presumption of backing that exceeds $50 million, with a 40% stock of the full fig of tech firms.

The Covid-19 Factor

Out of the $4.9 cardinal successful backing that was raised by African exertion companies successful 2021, astir two-thirds of this went to fintech companies, information from a caller study has shown. In presumption of deals wherein the superior raised exceeded $40 million, fintechs accounted for 40% of specified deals.

Source: Africa Investment Report 2021.

As shown successful the latest Africa Investment Report, the fintech dominance successful 2021 yet culminated into a play with “the highest fig of single, non-M&A [mergers and acquisitions] deals supra $100 million” connected grounds truthful far. The study besides shows that Nigeria has the biggest stock of fintech firms that raised much than $100 million.

Meanwhile, the study suggested that the Covid-19 pandemic could good beryllium the main mentation for the surge not lone successful the backing of fintechs, but non-fintech firms arsenic well.

“Logistics and vigor travel by measurement of backing but the astir caller question of digitization — possibly boosted by Covid-19 — is propelling sectors specified arsenic e-commerce, agriculture and healthcare,” concluded the survey report.

Funding Highly Concentrated

However, the aforesaid study does concede that astir of the funds raised successful 2021 were concentrated successful a fewer projects. The study explains:

Although highly concentrated successful a fewer cases, [which] lone represents little than 3% of full disclosed deals but captures implicit 55% of full disclosed funding, this concern size carries important value and acts arsenic a propulsion origin for respective investors.

Besides equity financing, the Africa Investment Report information shows that indebtedness financing is progressively becoming a viable backing route. To enactment this assertion, the study points to the information that 6% of full disclosed backing successful 2021 was indebtedness financing.

Source: Africa Investment Report 2021.

In presumption of the origins of the late-stage investors, the information shows that the United States is by acold the biggest root of superior for Africa tech companies with a 62.5% share. In a distant 2nd spot was the United Kingdom, which had a stock of 7.5%, followed by South Africa 6%, and Canada which accounts for 4%.

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