Traders are shifting focus to different areas as offers get costly in prime funding locations
Africa’s tech startup scene has grown considerably over the past decade, with varied experiences exhibiting a large improve within the variety of offers, ticket sizes and funding. Final yr, startups within the continent raised about $5 billion, double what was raised in 2021 and 9 instances the quantity from 5 years in the past.
Nonetheless, this development has been targeted on 4 nations — Nigeria, Kenya, South Africa and Egypt, often known as the “Massive 4” as a result of they account for greater than 70% of enterprise capital funding into the continent.
However VCs are shifting their consideration elsewhere, reaching startups in a minimum of 29 nations final yr, up from 26 in 2020. Exterior the Massive 4, investments ballooned to $1.4 billion, up 382% yr on yr, in keeping with Partech’s 2021 report.
What may very well be driving the sudden curiosity in different African nations?
“Traders are in search of better-priced however high quality offers in these markets. Offers within the Massive 4 have change into overpriced and aggressive with the entry of international traders,” Nairobi-based Novastar Ventures affiliate funding director Abel Boreto advised Fintech.