As we settle into 2022, African tech fundraising figures have crystallised. Last week, Partech Africa released a report on the total startup funding raised in Africa—$6 billion.
This record was nearly 4x the amount raised in 2020, a year when ecosystem fundraising decreased for the first time in nearly a decade as a result of the COVID-19 pandemic.
Fundraising in the tech ecosystem in Africa is growing fast—faster than global and regional venture capital (VC) investment. Last year’s growth put African tech ahead of even Latin America (LATAM) and the rest of the world. According to the report, African tech funding is growing 3x faster than global VC investment, which reached $643 billion in 2021 with a year-on-year growth rate of 92%.
In absolute terms, the total amount raised by African startups remains small compared to the three-digit billion-dollar figures in other regions or globally. And despite accelerated growth in fundraising, many Nigerian businesses (especially those outside tech) still struggle with raising capital to scale. It is little wonder that the 2021 FATE Foundation State of Entrepreneurship survey highlighted limited access to finance as a significant issue for Nigerian entrepreneurs.
As detailed by Partech, funding from VCs helps tech-enabled startups grow. That’s because growth costs money, and as Paul Graham—Y Combinator's famous founder—argues, "The only essential thing [for startups] is growth." With this in mind, it seems obvious that the