African startups raised a record amount of funding in 2022, with Kenyan companies leading the way.
According to The Big Deal, an American newsletter that covers startup deals in Africa, Kenyan startups raised a record Sh135.8 billion (approximately $1.3 billion) from international investors in 2022, helping the country take the second spot on the continent. Nigeria retained the top spot with Sh148.1 billion (approximately $1.4 billion), followed by Egypt with Sh101.2 billion (approximately $986 million) and South Africa with Sh67.9 billion (approximately $665 million).
Overall, startups across the continent raised more than $4.8 billion from over 1,000 deals of over $100,000. The Big Deal predicts that the final funding total for 2022 will eventually exceed $5 billion.
Kenya’s strong performance was particularly noteworthy, as the country had suffered a decrease in funding of 24% year-on-year between 2020 and 2021, while its peers saw growth of between 4x and 5x. However, the data shows that Kenya had already topped its 2021 funding numbers by March of 2022, and recorded 2.5x year-on-year growth between 2021 and 2022.
The report notes that while the data currently adds up to $4,849 million, the final total for 2022 is likely to be higher due to a delay in investors sharing deals confidentially and to deals becoming known later. For example, a startup may only release data on its seed round when they announce its Series A round a year or two later.
Overall, the strong performance of African startups in 2022 is a positive sign for the continent’s tech industry and suggests that international investors are increasingly confident in the potential of African startups to succeed. It will be interesting to see how this trend continues in the coming years and whether African startups will be able to maintain their strong fundraising efforts.