E-Financial
Resilient African Tech Ecosystem Still Growing With $6.5 Billion Raised In 2022
Partech Africa, the VC fund dedicated to technology startups in Africa, has issued its annual report on Africa Tech Venture Capital.
The report, which aims to provide a practical picture of the state of the ecosystem, revealed that despite the global VC downturn, the African tech ecosystem grew faster than all other markets globally.
Total funding invested into tech startups on the continent reached $6.5B, an increase of 8% vs 2021, spread across 764 deals – compared to 724 rounds in 2021.
The report, consisting of disclosed and confidential deals, saw debt funding more than double in volume, reaching $1.55 billion through 71 deals [65% YoY growth]. In comparison, equity rounds showed a slight decline, as 653 African tech startups raised $4.9B [-6%] in 693 equity rounds [2% YoY growth].
Focusing on equity funding, the report revealed the ecosystem was still accelerating during Q1 and Q2 of 2022 compared to 2021, with the YoY comparison showing Q1 and Q2 at +127% YoY and +83% YoY, respectively.
However, the global VC slowdown stifled growth in activity in Q3 [-65% YoY] and Q4 [-35% YoY]. In 2022, fundraising activities remained flat across all stages. At $1.4M, Seed+ ticket sizes averaged higher in 2022 [+12% YoY], while Series A remained the same at $8.5M.
Later stages reverted to 2019 levels, as Series B and Growth round sizes dropped by -23% and -50% YoY, respectively. In addition, 2022 witnessed a significant reduction in the number of megadeals [over 100M], with only seven deals compared to 14 in 2021.
Speaking on the launch of the annual report, Tidjane Deme, General Partner at Partech, said: “2022 was a particularly challenging year for the venture ecosystem worldwide, as venture and growth investors scaled back their investment by a third.
“However, by comparison, our report revealed that the African tech ecosystem showed great resilience, as more investors have doubled their commitment to the continent by investing in local teams and funds dedicated to the market, proving to be the best way forward.”
Overall, Nigeria, South Africa, Egypt and Kenya remain the top investment destinations in Africa, with a share of total volume staying relatively steady at 72%.
Nigeria retained the top rank, bringing in $1.2B in capital, despite a decline of 36% from 2021; South Africa, Egypt, and Kenya each attracted over $0.7B in funding, with Ghana completing the top 5 with just over $0.2B. Overall, 28 countries attracted equity funding in 2022, 13 of them in Francophone Africa.
In light of the market downturn, the report’s findings also revealed that Fintech, which has historically attracted sizable investments, was the most impacted by the slowdown in the number of large rounds.
However, fintech remains the most funded sector in Africa, across all sources of capital, with 39% of the total equity volume [$1.9B] and 45% of the total debt volume [$691M].
Other sectors have experienced substantial growth and gained a meaningful share of the equity funding activity this year, most notably Cleantech, which made a big comeback with 18% of total equity funding at $863M [+347% YoY] but also 39% of the total debt funding at $605M.
The report’s findings also show:
- Female-founded startups raised 22% of all equity rounds in 2022, up 2 percentage points from 20% in 2021. They also contributed $644 Million or 13% of the total equity funding, down 3 percentage points from 16% in 2021.
- Outside of the top 4 countries, Ghana ($202 million), Algeria ($150 million), Tunisia ($117 million) and Senegal ($105 million) were the only other countries that broke the $100M funding mark.
- Despite a slowdown in the growth rate of equity investors, Africa’s tech ecosystem attracted 1,149 unique investors for the first time [+29% YoY vs 2021]. African tech has seen more investors committed, with 89 participating in 5 or more deals [compared to 65 investors in 2021].
- The number of debt investors active on the continent is growing 2.5x YoY, with a good mix of local debt institutions, international lenders with emerging market vehicles and Development Finance Institutions.
Cyril Collon, General Partner at Partech, added: “Much of our methodology has remained the same over the years, and we, therefore, can provide a snapshot of how the African continent has evolved over the years. Nigeria and the fintech vertical have remained at the top spot; however, in an environment where equity funding is more challenging, debt has proved to be a solid alternative source of African tech startups in 2022, which signals a maturity within each sector.”
Headquartered in Dakar, Partech Africa is the largest VC fund dedicated to technology startups in Africa.
With a focus on Late Seed, Series A and B equity rounds in startups which are changing the way technology is used across multiple sectors, including education, mobility, finance and healthcare, the VC has, to date, invested in 17 African startups, such as Wave and TradeDepot.
Using the same methodology as previous years, the seventh Partech Africa annual report on African tech start-ups only includes equity rounds where the total amount is higher than US$200K.
First Asset Management Limited, a leading investment management firm in Nigeria and a subsidiary of First HoldCo Plc., has announced a significant milestone, the company has surpassed ₦1 trillion in Assets Under Management (AUM).
This achievement reflects the firm’s steadfast commitment to delivering exceptional client service and strong investment performance. It also underscores the trust and loyalty shown by its clients, partners, and stakeholders, which have been instrumental in driving the company’s sustained growth.
Speaking of the milestone, Ike Onyia, Managing Director of First Asset Management Limited, credited the accomplishment to the enduring support of the firm’s clients and stakeholders.
“This milestone is a clear indication of the confidence placed in us by our clients and partners. It highlights the firm’s ability to deliver successful investment outcomes and reinforces its dedication to fulfilling its mandate,” Onyia said.
He went on to express deep appreciation to the firm’s clientele: “The continued partnership of our clients is not taken for granted. Their commitment has been pivotal, and the performance of their investments inspires the team’s dedication to providing best-in-class service. As the firm continues to grow, it remains focused on deploying innovative and forward-looking investment strategies tailored to each client’s financial goals.”
Federal High Court in Abuja has rejected the request to stop the Central Bank of Nigeria (CBN) from using the e-naira trademark for the growth of the country’s economy.
Justice James Omotosho refused to grant the request brought before him by E-naira Payment Solutions Limited, a private company, which had dragged the CBN before the court, praying for an order of interim injunction restraining the apex bank from using the e-naira trademark on the grounds of lack of ownership.
It claimed that the disputed e-naira trademark was its sole property based on the acceptance of its application for registration by the Trade Marks Registry of Nigeria.
The plaintiff claimed that its ownership of the trademark was being threatened by the CBN’s bid to hijack the mark, adding that it would suffer irredeemable damages if the apex bank were allowed to assume ownership of the mark.
In a motion on notice marked FHC/ABJ/CS/2021, E-naira Payment Solutions Limited asked the court to stop the CBN from communicating with the United States Patent and Trademark Office regarding the disputed trademark until the dispute is fully resolved.
It also pleaded with the court to stop the United States from processing the CBN’s application for the formal registration of the e-naira trademark for use by the CBN and the federal government of Nigeria.
However, the CBN, in its defence, pleaded with the court to reject the request on the grounds that the e-naira trademark is a national asset that can only be owned and used by the federal government of Nigeria and itself.
The apex bank claimed that the letter of acceptance of registration issued to the plaintiff in error by the Trade Marks Registry of Nigeria had since been voided and withdrawn through a letter dated 15 November 2021.
CBN, while describing the e-naira trademark as national intellectual property, informed the court of its possession of a registration certificate from the Trade Marks Registry of Nigeria in line with Section 22 of the Trade Marks Act and that it was on the verge of securing registration from the United States Patent and Trademark Office.
The bank maintained that the e-naira trademark cannot be owned by an individual or private corporate body such as E-naira Payment Solutions Limited and faulted the ownership claims of the plaintiff, adding that there was no proof of its claim in Class 36 that it had registered the mark with the Trade Marks Registry of Nigeria.
Contrary to the plaintiff’s claim, the CBN, in its defence, insisted that Nigeria would suffer huge losses in its economy and reputation in the international community.
In his ruling on the motion, Justice James Omotosho agreed with the CBN that Nigeria’s economy would suffer greater damage than the plaintiff if the request were granted.
The judge held that the letter written by the CBN to the United States Patent and Trademark Office, advising it not to accept the plaintiff’s application, was a preservatory measure aimed at protecting Nigeria’s interests, not a malicious act as claimed by the plaintiff.
Justice Omotosho, while rejecting the request, awarded costs of N50,000 against the plaintiff, to be paid to the CBN before the adjourned date for the hearing of the substantive suit. He fixed 26 June for the hearing of the substantive matter.
The Federal Ministry of Industry, Trade and Investment (FMITI), under the leadership of Honourable Minister Dr. Jumoke Oduwole, MFR, has reaffirmed its commitment to Nigeria’s economic transformation through a robust partnership with the Nigerian Exchange Group (NGX Group).
This collaboration was highlighted during the distinguished Closing Gong Ceremony at the NGX, Lagos, where Dr. Oduwole outlined FMITI’s ambitious target to facilitate $6 billion in foreign investment into Nigeria’s productive economy in 2025.
Oduwole was at the Nigeria Stock Exchange (NGX) on invitation by the Board and Management of Nigerian Exchange Group Plc (NGX Group) to perform the distinguished Closing Gong Ceremony on Nigerian Exchange, Lagos.
This symbolic ceremony, held on trading days, marks the formal close of the market and provides an excellent platform to showcase leadership, inspire stakeholders, and address critical economic issues.
Of the $6 billion target, $3 billion is projected to come from Foreign Direct Investment (FDI) into key sectors such as infrastructure, manufacturing, agribusiness, technology, and renewable energy.
These sectors are pivotal to creating jobs, promoting exports, and enhancing Nigeria’s productive capacity. Another $3 billion will be mobilized through Foreign Portfolio Investment (FPI) by leveraging innovative financial instruments like green bonds, diaspora-linked securities, and SME-focused platforms.
These efforts aim to deepen market liquidity and align capital flows with national priorities.
Oduwole emphasised the integral role of capital markets in driving economic resilience and sustainable growth, stating: “Deepening Nigeria’s capital markets is fundamental to improving investment flows, creating jobs, and sustaining long-term economic resilience.”
Ahonsi Unuigbe, Chairman of Nigerian Exchange Limited (NGX), reinforced the importance of this collaboration, noting that, “capital markets are powerful engines of innovation, business expansion, and economic inclusion, all of which are essential to advancing Nigeria’s industrialisation objectives.”
Temi Popoola, Group Managing Director/CEO of NGX Group, high – lighted the Exchange’s technologydriven vision.
“We are building a next-generation exchange ecosystem designed to de – mocratise investment opportunities, enhance market liquidity, and position Nigeria as a competitive destination for both domestic and international capital,” he said.
Partnership Opportunities and Achievements The engagement brought together key stakeholders from the capital market ecosystem, all of whom reaffirmed their commitment to supporting FMITI’s initiatives.
Notable areas of collaboration include: Strategic Listing of State Owned Enterprises (SOEs): Building on the successful corporatization of the Nigerian National Petroleum Company (NNPC), the listing of SOEs is expected to unlock significant value, enhance transparency, and deepen market liquidity.
Empowering SMEs: Efforts are underway to establish a dedicated capital market platform for small businesses, providing access to funding, capacitybuilding programs, and pathways for sustainable growth.
Green and Sustainable Finance: The NGX Impact Board is set to mobilize capital for high-impact projects through instruments like green and sustainability bonds, supporting climate resilience and infrastructure development.
The NGX Group also emphasized its role as a gateway to capital markets, offering a robust platform for cross-border investments.
This aligns with FMITI’s vision to restore investor confidence and attract foreign capital, as evidenced by the recent rebound in Foreign Direct Investment (FDI), which rose to $2.6 billion by Q2 2024.
A Shared Ambition for Nigeria’s Prosperity Speaking at the ceremony, Alhaji (Dr.) Umaru Kwairanga, Chairman of NGX Group, commended the Ministry’s leadership and bold reforms, which have set the stage for inclusive growth.
“By fusing policy innovation with market infrastructure, we can catalyze a new era of sustainable growth and national development,” he stated.
As Nigeria moves toward its $1 trillion GDP target by 2030, FMITI and NGX Group remain steadfast in their shared ambition to build a prosperous, inclusive, and resilient economy.
Together, they aim to align investments with national priorities, unlock the full potential of Nigerian enterprise, and create tangible opportunities for all Nigerians.
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