$474m raise sees Africa blockchain funding rise 429%

By Alexander Chiejina

Africa saw a surge in funding for blockchain-related projects in 2022, albeit its proportion of worldwide capital is still small, according to research by CV VC and Standard Bank.

The African Blockchain Report 2022, which was released by blockchain venture capital firm CV VC in collaboration with Standard Bank, revealed that African blockchain firms raised $474 million in 2022, an increase of 429 percent over the previous year.

Agreements in the fields of infrastructure, individual identity, record-keeping, and access to financial independence contributed to a 12 percent increase in agreements across the continent. With blockchain accounting for 15 percent of all venture funds in Africa, the continent saw a 34 percent increase in venture capital to $3.14 billion.

Combining the sharp rise in blockchain funding with the fact that Africa saw the smallest increase in blockchain deals globally while also showing increases in all deal sizes suggests that investors are becoming more confident and African blockchain startups are raising bigger fundings. This is despite the fact that, by a wide margin, Africa has received more worldwide investment than any other region, according to the report’s authors.

According to the research, Africa’s first blockchain “unicorns” — privately held startup businesses with a current worth of $1 billion or more — have emerged in recent months. Kucoin, a cryptocurrency exchange based in the Seychelles, attained the value in the third quarter of 2022. As a scalability solution for the Ethereum blockchain, Scroll.io describes itself as having recorded the valuation in the first quarter of this year.

Nevertheless, despite the industry’s rapid expansion, Africa’s contribution to global blockchain funding is still small, rising from 0.3 percent in 2021 to 1.8 percent in 2022.

Geographically, the deal value was also concentrated, with South Africa (37.3%) and the Seychelles (43.9%) making up 81 percent of the funding for African blockchain projects. Nigeria had the most transactions (13), but their total value was only $24.7 million, compared to Seychelles ($208 million), which had six transactions, and South Africa ($176.6 million), which had six transactions. With two deals, Liberia came in second place in terms of value, largely due to a $37.5 million fundraising round by the software development company Jambo, while Kenyan businesses raised $25.8 million through four deals.

Gideon Greaves, managing director of CV VC Africa, asks for increased business education on the advantages of blockchain technology in his introduction to the research.

“Despite the quick development and advancement, there is still a sizable knowledge gap that needs to be filled. I’ve had the chance to interact with legacy businesses all over the continent, and it is very evident that the majority of C-level employees have no idea what blockchain is or why they should care. The possibility for more development and advancement is hampered by this lack of information and comprehension. It is essential that we close this knowledge gap and inform influential people about the potential of blockchain technology,” Greaves said.