JOHANNESBURG (Reuters) – African start-ups attracted a record $5.2 billion (4.82 billion euros) in 2021, investment nearly fivefold after a COVID-19 pandemic-related low in 2020 , according to data released Tuesday by an industry group.
The success of companies like Nigeria’s Paystack, acquired in 2020 by US payments firm Stripe, and another fintech company Flutterwave, valued at over $3 billion, has fueled international interest in emerging businesses on the continent.
“African start-ups have raised more funds in 2021 alone than the previous seven years combined,” said a report by the African Private Equity and Venture Capital Association (AVCA), which promotes private investments in the sector. continent.
Investors have been particularly interested in fintech start-ups seeking to meet the needs of Africa’s largely unbanked population. The financial sector accounted for 60% of investments by value and nearly a third of transactions by volume, show data collected by the AVCA.
Nigeria, a hotbed of young fintech companies, was Africa’s top venture capital destination last year, overtaking South Africa, the continent’s most developed economy.
Most of the venture capital operations involved early-stage financing. Late-stage funding, however, swelled in 2021, with Series C fundraising growing nearly 40-fold.
Fintechs Chipper Cash, MFS Africa, Yoco, and OPay collectively raised $833 million in Series C financings.
Deals under $1 million accounted for almost a third of deals by volume, while those over $50 million constituted 62% of the total value of venture capital funding in Africa in 2021.
(Report Joe Bavier; French version Dagmarah Mackos)