Business a.m.
A new report by the African Private Capital Association (APCV) has revealed that investors poured $641 million into Artificial Intelligence (AI) enabled startups in Nigeria and other African countries between 2022 and 2023.
The report highlighted how AI has been attracting a growing amount of venture capital over the past few years, as the technology has been revolutionising traditional industries and creating new investment opportunities.
“About 103 VC deals with a cumulative value of $641 million took place in African startups employing AI-related technologies between 2022 and 2023, indicating a vibrant and growing interest in the continent’s AI potential,” it said.
According to the APCV report, AI-related companies were responsible for some of the largest venture capital deals in 2023, even in a year when very large deals were hard to come by. This is as OpenAI, a leading AI company, raised $10 billion over a multi-year period. Anthropic, another AI firm, raised $7.3 billion in five funding rounds, while Inflection AI raised $1.3 billion in a single funding round. These were recognised as some of the largest deals in the entire global venture capital landscape for the year, a testament to the growing interest in AI technologies.
Investors have increasingly taken note of African startups that incorporate AI into their business models, according to the report. While the level of investment in AI-based startups in Africa is not yet comparable to that seen in more developed markets, the report finds that the beginnings of investor confidence in the continent’s AI capabilities are now apparent. This suggests that more investment in AI-powered African startups is likely to follow in the coming years, as the continent’s tech ecosystem continues to mature.
The report also noted that African startups are increasingly using AI technologies to bypass the challenges posed by the lack of infrastructure and legacy systems in the continent. These startups, it observed, are using AI to deliver innovative solutions in sectors such as finance, healthcare, and others.
