Africa vs. The Rest of The World

Though Africa was underrepresented in global start-up funding flows in 2022, it was the only region to record YoY growth

Today, we’re using CB Insights’ State of Venture 2022 report - except for the African numbers which are of course coming from our own database - to compare Africa’s performance to the rest of the world in 2022. This is going to be one of those proverbial 🥃 glass half full - glass half empty 🥃 type of analysis. We’ll let you decide which side you want to be on.

🥃 The glass half empty

Let’s start with this one, so we can end on the more positive note. Africa remains the region where start-ups raised the least amount of funding in 2022 ($4.8bn+). As such, Africa represented only 1.2% of all the start-up funding raised globally last year. This is lower (less than half) than the continent’s share of global GDP (between 2.5% and 3%). But there is a much bigger gap if we are to compare to the continent’s share of global population (around 17%). In other words, if Africa’s share of global funding (close to $420bn) were aligned to its share of population, start-ups on the continent should have attracted over $70bn last year, 15 times more than the ~$5bn they raised. The continent’s average $3.2 raised per capita is far from LatAm’s $12 pc or Asia Pacific’s $25 pc and incomparable to European ($108 pc), let alone North American ($560 pc) levels.

🥃 The glass half full

Now for the silver lining: Africa was the only region to record positive YoY growth in start-up funding in 2022 (+5% YoY). The other regions didn’t just see a decline in funding raised, they all experienced a double-digit drop: from -17% YoY in Europe to -37% in North America, -39% in Asia Pacific, and a -62% free fall in LatAm, meaning that the funding raised in that region was divided by ÷2.6 YoY (from $20bn+ to just below $8bn). As a result, the difference in funding raised between Africa and LatAm, which stood at $16bn in 2021, melted down to just over $3bn in 2022. If the trend were to continue - but we’ve learned that trends can’t really be trusted these days - Africa could potentially take over LatAm next year, and therefore not rank last anymore…

That’s all for today. I appreciate we’ve been sharing a lot of content since the beginning of the month, and we’ve got another one of our regional maps - Southern Africa - coming up on Thursday. But it’s been great to see so many of you share, comment, or reach out for more details. Your positive feedback is what keeps us going! 💖