Nigeria tops the list of African countries that benefitted from the $5 billion raised by Africa’s technology start-ups in 2021. Investors from the United States and China piled into companies that are helping the continent’s tech-savvy and young population conduct financial transactions, a new report has revealed.
The report further revealed that nearly two-thirds of the top 20 largest disclosed deals involved investors from the US companies. This includes Endeavor Catalyst and Ribbit Capital took part in at least three deals each.
According to the report, most of the funding was concentrated in the three traditional start-up hubs on the continent. Nigeria, which led with over 200 deals, as well as South Africa and Kenya, while Egypt came in fourth.
Investors and betting companies such as Chipper Cash, TeamApt Limited and Flutterwave Inc. will benefit from a surge in demand for banking services in a continent that requires strong financial infrastructure.
Deals in 2021 were a record-breaking close to $5 billion in disclosed investments. Picking up from a pandemic-induced slow down in 2020.
The year also saw the launch of multiple Africa-focused funds, including Nigeria’s Ventures Platform that raised $40 million.
Fintechs attracted the majority of the funding, 62 per cent of investment in 2021 while health and logistics companies were the other sectors to draw investment, according to data from Briter.
The funding for 2021 was a higher amount than the figure raised in the previous three years combined.
The increased inflows, partly due to investor interest in financial-technology businesses in Africa, helped deliver at least four so-called unicorns, companies worth more than $1 billion, in Africa this year. They include Andela, Flutterwave and OPay.
Earlier data, which put the figure at $4 billion, stated that Nigeria earned the largest, chunk of $1.37 billion.
While Nigerian start-ups raised $1.37 billion in 2021, South Africa raised $838 million; and Kenya, $375 million, with Nigeria boasting over 200 deals for the year.
Other mentions were Senegal, where start-ups raised $222 million in 2021 and Tanzania at $96 million.