The growth of blockchain and cryptocurrency technology in the continent saw African blockchain startups raise $474 million in 2022, according to The African Blockchain Report 2022.
The report, which was published by blockchain venture capital company CV VC AG in collaboration with Standard Bank, indicated that blockchain funding was up by 429 per cent year-on-year, the highest growth rate of any region.
It stated that evidence of the progress of the blockchain sector was the growth of a multitude of funding metrics over the course of 2022 with significant improvements witnessed in total funds raised, deal count, and median deal size.
It said, “On a blockchain-specific venture funding front, Africa has also continued to perform well and has shown consistent growth.
“African blockchain startups raised $474m in 2022, a 429 per cent YoY funding increase, the highest funding growth rate of any region. When combining the sharp increase in blockchain funding with the fact that Africa had the smallest increase in blockchain deals, the annual median deal size has increased significantly, indicating that businesses are raising larger cheques and investors are gaining confidence.”
The blockchain firm noted that because of its young population, Africa was in a unique position to capitalise on its current circumstances to drive innovation in the blockchain space.
It expanded, “In the areas of financial infrastructure, personal identification, record-keeping, and access to financial independence, the continent’s present situation has created the perfect environment for blockchain technology to flourish and tackle real-world issues – demonstrating real-life utility.”
The firm explained that Nigeria was the leading country in terms of the number of blockchain startups funded, followed by South Africa, Seychelles, and Kenya.
It said that although Nigeria had the most deals within the continent during 2022, it only amounted to a 3.4 per cent share of all African blockchain venture funding with an average deal size of $1.25m.
Blockchain venture funding to Nigeria was $15.99m. It was $208.04m in Seychelles; $176.65m in South Africa; $37.50m in Liberia; $25.79m in Kenya; $8m in Cameroon; and $2m in Ghana.
Commenting on the blockchain deals of the year, the firm said, “2022 saw the closing of the first mega-deals for African blockchain companies, with Kucoin raising $150m and MFS Africa raising $100m.
“These deals make up 33 per cent of the total mega-deal count on the continent in 2022. Kucoin and Scroll broke the ice, becoming the first African blockchain companies to reach unicorn valuations, meeting the expectations we laid out in the previous installment of this report,” it stated.
The firm further stated that fintech was a critical sector of the continent’s economy and can change the financial landscape.
It added, “Fintech is a critical sector in the African economy, as the region’s financial landscape is often fragmented and underserved. Blockchain-based fintech solutions have the potential to revolutionise the financial industry, offering cheaper, faster, and more accessible financial services to individuals and businesses.
“The increase in funding for this sector in 2022 highlights the recognition of the potential for blockchain to address and even solve the challenges faced by the African financial industry.”
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Publish date : 2023-05-02 07:00:00
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