Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021 – Fintech Bitcoin News

Fintechs account for practically two-thirds of the $4.9 billion that was raised by African expertise corporations in the course of the previous 12 months. Fintech teams additionally dominate by way of funding that exceeds $50 million, with a 40% share of the whole variety of tech corporations.

The Covid-19 Issue

Out of the $4.9 billion in funding that was raised by African expertise corporations in 2021, virtually two-thirds of this went to fintech corporations, knowledge from a brand new report has proven. By way of offers whereby the capital raised exceeded $40 million, fintechs accounted for 40% of such offers.

Report: Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021
Supply: Africa Funding Report 2021.

As proven within the latest Africa Funding Report, the fintech dominance in 2021 ultimately culminated right into a interval with “the very best variety of single, non-M&A [mergers and acquisitions] offers above $100 million” on file thus far. The report additionally exhibits that Nigeria has the largest share of fintech corporations that raised greater than $100 million.

In the meantime, the report steered that the Covid-19 pandemic may effectively be the primary rationalization for the surge not solely within the funding of fintechs, however non-fintech corporations as effectively.

“Logistics and vitality comply with by quantity of funding however the newest wave of digitization — maybe boosted by Covid-19 — is propelling sectors similar to e-commerce, agriculture and healthcare,” concluded the research report.

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Funding Extremely Concentrated

Nonetheless, the identical report does concede that many of the funds raised in 2021 have been concentrated in a number of initiatives. The report explains:

Though extremely concentrated in a number of instances, [which] solely represents lower than 3% of whole disclosed offers however captures over 55% of whole disclosed funding, this funding dimension carries important weight and acts as a pull issue for a number of traders.

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In addition to fairness financing, the Africa Funding Report knowledge exhibits that debt financing is more and more changing into a viable funding route. To help this assertion, the report factors to the truth that 6% of whole disclosed funding in 2021 was debt financing.

Report: Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021
Supply: Africa Funding Report 2021.

By way of the origins of the late-stage traders, the info exhibits that the US is by far the largest supply of capital for Africa tech corporations with a 62.5% share. In a distant second place was the UK, which had a share of seven.5%, adopted by South Africa 6%, and Canada which accounts for 4%.

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Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, creator and author. He has written extensively in regards to the financial troubles of some African nations in addition to how digital currencies can present Africans with an escape route.

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