E-Financial
Africa’s Tech Start-ups Attracted US$2bn Investment in 2021
Investment into the African tech start-up ecosystem trebled over the course of 2021 that saw total funding pass the US$2-billion mark for the first time.
This is according to the seventh edition of the annual African Tech Startups Funding Report released by Disrupt Africa in partnership with Novastar Ventures, MFS Africa, Quona Capital, 4Di Capital, MEST Africa and Future Africa.
The report states that overall, 564 start-ups raised a combined US$2,148,517,500 in 2021. The number of funded start-ups grew by 42.1% on 397 in 2020, and the funding total was more than treble – up 206.3% on the US$701,460,565 banked the previous year.
Egypt, Kenya, Nigeria and South Africa have been identified as the ‘big four’ from a funding perspective, securing a greater share of total funding between them than in 2020.
Nigeria has taken top spot with 161 start-ups raising a combined total of more than US$900-million.
In December 2021 Nigeria’s government, in conjunction with industry leaders, released a statement detailing progress with the Nigeria Startup Bill (NSB).
The legislation is expected to reinforce the country’s start-up ecosystem and address issues like weak infrastructure, access to capital and disruptive regulation.
Though Nigeria and the rest of the “big four” remain clear leaders, there is still plenty of activity elsewhere on the continent, with start-ups backed in 24 African countries.
“Momentum has been building in the African tech space for quite some time now, and 2021 will be remembered as a watershed year.
“Breaking not just the US$1 billion but the US$2-billion mark, creating more unicorns, and about doubling the number of active investors – it was a very good 12 months indeed. It is still just a beginning, however, and there is plenty of room for more growth,” said Disrupt Africa co-founder Gabriella Mulligan.
Steve Beck, managing director at Novastar Ventures, said, “We have been investing in start-ups on the continent since 2014 and are encouraged by the tremendous growth of the venture ecosystem since then. Nevertheless, as start-ups move from proof-of-concept to scale, capital remains scarce.
“Disrupt Africa’s annual funding report is a critical resource for founders as they climb and navigate a capital ladder that still has missing rungs. We are delighted to partner with the team at Disrupt Africa to ensure their research is accessible to all entrepreneurs.
“The data and insights in the report are a vital resource, not just for charting the development of the venture ecosystem in Africa, but for supporting it.”
MFS Africa founder and CEO Dare Okoudjou said the African tech ecosystem had experienced unprecedented growth, breaking records year after year.
“It’s the clearest indicator that we are reaching an exciting inflection point in our sector. In the last quarter of 2021, we raised US$100-million in Series funding to accelerate our growth as we make borders matter less.
As such we understand the importance of the right funding to build the fundamental infrastructure needed to facilitate interoperability across payment schemes, borders, and currencies.
“Accurate and informative reports about the ecosystem raise the profile of our sector beyond Africa, and that interest helps to channel much-needed investments in impactful start-ups.”
The naira appreciated to N1,600 per dollar in the parallel market at the close of trading hours on Monday, strengthening from N1,610 per dollar recorded over the weekend.
Similarly, the naira saw a slight gain in the Nigerian Foreign Exchange Market (NFEM), trading at N1,605 per dollar compared to N1,606 last Friday, according to data from the Central Bank of Nigeria (CBN). This represents a marginal N1 appreciation.
As a result, the gap between the parallel market and official exchange rate widened slightly to N5 per dollar, up from N4 over the weekend.
Central Bank of Nigeria (CBN) spent N315.18bn on currency issue expenses in 2024, marking a sharp increase of 306 per cent compared to N77.67bn recorded in 2023, the apex bank’s audited financial statement for the year has shown.
Currency issue expenses cover the printing, processing, distribution, and disposal of banknotes.
The latest figures reveal that the CBN’s cost of managing physical cash spiralled dramatically during the year under review, as Nigeria grappled with lingering cash shortages and disruptions in the money supply chain.
The surge in expenditure came as the country continued to deal with the effects of the naira redesign policy introduced in late 2022.
Despite efforts to stabilise cash circulation throughout 2023, Nigerians still faced queues at ATMs and difficulties in accessing cash in early and late 2024.
Faced with mounting public outcry, the CBN deployed several emergency measures to address the crisis.
Deposit Money Banks were directed to ensure consistent ATM loading and rural cash distribution, while the Bank also launched public hotlines for citizens to report cash scarcity incidents.
Also, the CBN ramped up enforcement efforts, including deploying monitoring teams, issuing sanctions against non-compliant banks, and mandating improved cash distribution.
PalmPay, a full-service digital bank, has reaffirmed its dedication to advancing the future of payments in Nigeria by promoting the widespread adoption of contactless-enabled payment terminals.
This was made known during the recently concluded BusinessDay Future of Payment Conference, themed “Fintech Evolution: Gateway to Payments.” In his welcome address, BusinessDay Publisher, Frank Aigbogun, emphasized that the next phase of fintech innovation must be driven not only by speed, safety, and simplicity but also by trust, inclusion, and accessibility to ensure broad-based impact across all segments of society.
Talking about PalmPay’s impact in the panel session titled “The Next Wave of Digital Payments: Trends and Innovation,” Ifeanyi Uzoka, Senior Business Development Manager at PalmPay, discussed the evolving landscape of digital payments in Nigeria.
He noted that while regulatory frameworks have supported the introduction of contactless payments, the high level of cash dependency remains a key barrier to widespread adoption.
“At PalmPay, financial inclusion is central to everything we do,” Uzoka stated. “To support this mission, we’ve launched contactless-enabled debit and premium cards, ensuring our users have access to convenient and secure payment experiences. We also understand that trust is critical, which is why all contactless transactions on PalmPay’s platform include an additional layer of authentication for enhanced security.”
PalmPay continues to lead innovation in Nigeria’s digital finance ecosystem by delivering secure, user-friendly, and future-ready solutions. The company’s recently launched debit and premium cards in partnership with Verve are now serving its growing base of over 35 million users nationwide.
This move into contactless payments underscores PalmPay’s alignment with global payment trends and its ongoing commitment to building a more inclusive and digitally empowered economy.
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