Nigeria, SA, Egypt, Kenya &#8211; Frontiers for Africa’s investment in tech in 2022

By Alexander Chiejina

Nigeria, South Africa, Egypt and Kenya have remained major frontiers for investment in tech on the African Continent in 2022 despite the Covid-19 pandemic. This development, as evident in a recent Disrupt Africa’s African Tech Startups Funding Report (seventh Edition), disclosed that startups in the four countries raked in a combined total of $1.9 billion in 2021 (an estimated 92.1 percent of the entire total investments raised in the African continent in the year.

The report revealed that funding secured by Nigeria, Egypt, South Africa and Kenya has continued to be on a steady rise year-on-year: from a 79.4 percent share in 2018, to 87.5 percent in 2019 and then 89.2 percent in 2020.

The African Development Bank 2021 report titled Entrepreneurship and Free Trade: – Towards a New Narrative of Building Resilience, said these four nations account for about a third of Africa’s start-up incubators and accelerators and also receive 80 percent of foreign direct investment (FDI) into the African continent. However, subtle factors such as large population size and large economies are incentives required to drive investment toward these start-ups.

Nigeria, Egypt, South Africa and Kenya with a population size of about 206 million, 102 million, 59 million and 53 million inhabitants, respectively, have a GDP of roughly $440 billion, $404 billion, $420 billion and $110 billion, respectively.

Added to this investment growth in these countries are the four biggest African tech hubs which attract the most fintech funding on the African continent. Below is a table showing investment raked in by Nigerian based start-ups in 2022, Venture Capital/Angel Investors involves, startup type, among others.

1	TeamApt	$50 Million	QED Investors led the new investment Novastar Ventures, Lightrock, and BII participated in the round.	fintech that provides business payments & banking platforms	Nigeria
2	Vendease	$30 million	Series A equity round of $20 million was co-led by TLcom and Partech A $10 million debt round was raised by VentureSouq, Hustle fund, Hack VC, GFR Fund, Kube VC, Magic Fund, and Kairos Angels.	Food procurement startup	Nigeria
3	Ominibiz	$15 million	A round comprising $5 million equity and $10 million debt was led by Timon Capital with participation from VC firms such as Ventures Platform, Lofty Inc, Chapel Hill Denham, Chandaria Capital and Musha Ventures.	B2B e-commerce platform	Nigeria
4	NowNow	$13million	Funding round was led by NeoVision Ventures Ltd., DLF Family Office, and Shadi Abdulhadi.	Provides financial services to the unbanked and underbanked in the continent.	Nigeria
5	Kippa	$8.4million	The funding was backed by international investors with participation from Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, Crestone VC, VentureSouq, Horizon Partners and Vibe Capital.	Financial management and payments platform for Nigerian small businesses,	Nigeria
6	Pastel	$5.5 million	Seed raise was led by TLcom Capital., Global Founders Capital (GFC), Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play, and Soma Cap which participated in the seed round	Nigerian bookkeeping and digital platform for merchants.	Nigeria
7	Duplo	$4.3 million	Participant investors in the seed round include Liquid2 Ventures, Soma Capital, Tribe Capital, Commerce Ventures, Basecamp Fund, Y Combinator, and existing investor Oui Capital.	a B2B payments startup	Nigeria
8	Beacon Power Services (BPS)	$2.7 million	The round was led by Seedstars Africa Ventures with participation from Persistent Energy, Kepple Africa Ventures, Factor[e], and Oridun Capital Management.	Energy tech startup	Nigeria
9	Grey	$2million	The seed funding round included Y Combinator, Soma Capital, Heirloom Fund, True Culture Fund, angel investors Alan Rutledge, Samvit Ramadur gam, Karthik Ramakrishnan, and other high-profile investors.	Fintech	Nigeria
10	YouVerify	$1million	Orange Ventures and LoftyInc Capital. Additional investment came from Octerra Capital, Plug & Play Venture, Syntax Ventures, HTTP Investors, Afer Group, and Fronesyz Capital	Identification service startup	Nigeria
11	Bamboo	Raised $15 million in January 2022 and then another $17.4 million in March 2022		offers in-app tutorials on investment basics to help new and amateur users understand investments	Nigeria
12	Moove Africa	Raised more than $135 million and expanded its operation to India.		Mobility fintech solution	Nigeria
13	Flutterwave	$250 million in funding in 2022	B Capital Group, and with participation from Alta Park Capital, Whale Rock Capital, Lux Capital, among others.	fintech company that provides payment infrastructure for global merchants and payment service providers across Afica.	Nigeria
14	Interswitch	Raised $110 million in funding in 2022	LeapFrog Investments and Tana Africa Capital	Digital Payment Service	Nigeria
No	Start Up	Investment raked in	Angel Investors/VC involved	Start-up type	Country

Source: Nairametrics and Benjamindada.com

Other parts of Africa were unable to secure any huge venture investments partly due to a dearth of fintech solutions, availability of economic capital, including political and socio-economic challenges which hamper investment attractiveness in several countries across the African continent.

Experts believe that African governments have strategic roles to play in ensuring that their legal and institutional environment is improved to create a viable investment ecosystem for investors and start-ups. This would not only transform the investment landscape of non-big-four countries but would make them an attractive destination for start-up investments in Africa.

There is the urgent need to provide fiscal and non-fiscal incentives for venture capitalists to invest in the financial and tech sectors. The African Continental Free Trade Area (AfCFTA) provides African governments a unique opportunity to attract increased start-up funding by reducing barriers and improving governance as it relates to investment across countries in the continent.

Africa is the next destination for tech and innovation growth giving the youthful population that are ambitious and smart. Africa’s nascent tech scene is bound to flourish when given the right ecosystems to get into the tech and innovation ecosystem. More importantly is the introduction of the right regulations.