According to figures provided by an industry association on Tuesday, African start-ups garnered a record $5.2 billion in venture financing last year, bouncing from a pandemic-induced slump in 2020 with an almost five-fold surge in investments.
The success of startups like Nigeria’s Paystack, which was purchased by Stripe in 2020, and sister fintech Flutterwave, which was valued at over $3 billion, has piqued worldwide interest in the continent’s up-and-coming industries.
“African startups raised more in 2021 alone than the preceding seven years combined,” the African Private Equity and Venture Capital Association (AVCA), which promotes private investment on the continent,” wrote in a report.
Fintech start-ups that aim to satisfy the requirements of Africa’s most unbanked population have gotten a lot of investor attention. According to AVCA data, the financial industry accounted for 60% of investments in terms of value and over a third of agreements in terms of volume.
Last year, Nigeria, a hotspot of new fintech startups, surpassed South Africa, the continent’s most developed economy, as the largest destination for venture capital in Africa.
The majority of venture capital investments were made in early-stage funding rounds. Late-stage finance, on the other hand, exploded in 2021, with Series C fundraising rounds earning over 40 times as much money.
Chipper Cash, MFS Africa, Yoco, and OPay are among the fintech that has raised $833 million in Series C fundraising rounds.
