Fintech remains African tech’s most powerful force when it comes to funding, but growth is everywhere, and the sector’s share of total investment actually fell in 2022.

This is according to the eighth edition of the annual African Tech Startups Funding Report released by startup news and research portal Disrupt Africa, which is available free to all as part of an open-sourcing initiative in partnership with Flat6Labs, MarketForce, 4Di Capital, Mercy Corps Ventures, Newtown Partners, and InsiderPR.

The report tells the story of an impressive 2022 in which more startups raised more funding than ever before, in spite of a global downturn in investments. In all, 633 startups raised a combined US$3,333,071,000 in 2022. This represented incredible growth. The number of funded startups increased by 12.2 per cent on 564 in 2021, while the total secured funding jumped 55.1 per cent on US$2,148,517,500 in 2021. 

Fintech ascendant from a funding perspective

The fintech sector continues to power Africa’s startup funding revolution, posting another record-breaking year, yet its share of total funding declined as other space’s saw serious advancements.

In all, 205 fintech startups (32.4 per cent of the total, representing an increase of 11.4 per cent on 2021 figures), raised an extraordinary US$1,446,794,000 – 43.4 per cent of the continental total. This latter figure was up 39.3 per cent on US$1,038,456,500, which made up 48.3 per cent of the 2021 total. 

These impressive figures were once again driven primarily by Nigeria, which accounted for almost 40 per cent of startups and US$666,392,000 (46.1%) of funding. Flutterwave (US$250 million), Moove (US$181.8 million) and Yellow Card (US$40 million) were the main fundraisers. Egypt also had a strong year, with key rounds raised by MNT-Halan ($150 million), Paymob (US$50 million) and Khazna (US$38 million).

Growth elsewhere

The relentless growth of Africa’s fintech space should not, however, detract from positive developments elsewhere. Indeed, even though total fintech funding increased, its overall share of investment fell. Non-fintech startups still raised the majority of the capital, with many sectors enjoying bumper years. Those included nearest competitors e-commerce and retail-tech, and e-health, which are well-established in second and third place and growing at a faster rate than fintech.

Seventy-four e-commerce and retail-tech startups raised a combined US$556,761,000 – contributing 16.7 per cent of the continent’s total pot, and representing growth of 70.7 per cent on the US$326,156,000 raised in 2021.

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The e-commerce and retail-tech space have been enjoying a boom in funding since 2019, and in 2022 this trend continued for the fourth year running with 70.7 per cent growth in funding as above. 2021 had been up 271.5 per cent on the previous year’s total; while that, in turn, was up 85.6 per cent in 2019. The US$47,303,000 raised in 2019 was an increase of 283 per cent from the previous year. Over these years, retail-tech has emerged as an area attracting substantial investor interest and has helped drive growth in the sector.  

E-health placed third in terms of startups funded, and fourth for total funding secured; with 53 startups (8.4%) raising a combined US$189,103,000 (5.7%). 

In fact, 11 sectors had faster growth rates in terms of total funding in 2022, though admittedly the likes of restaurant-tech and auto-tech are developing from a very low base. Nonetheless, with funding snowballing more quickly than fintech in areas such as entertainment, marketing, transport, recruitment and agri-tech, as well as e-commerce and health, we can expect to see fintech’s lead further cut in the coming years.

For more information, or to download the report, please visit disrupt-africa.com/funding-report, or email Gabriella at [email protected], or Tom at [email protected].