Continental drift
In the context of a global VC slowdown, Africa was the only region to maintain 3-digit YoY growth in Q1 2022
Things aren’t looking great in the tech world. Some are even likening the current situation to the early-oughties’ dot-com bubble crash. In fact, in Q1 2022, both the US and Asia have recorded negative YoY growth, a first in quite a while. Europe and Latin America managed to hold up a bit better with YoY growth of over 30%. But it seems 3-digit YoY growth is a thing of the past… except in Africa. Q1 2022 was a tough quarter globally, yet investments in start-ups in Africa grew +150% YoY in Q1 2022; it was the fourth consecutive quarter of 3-digit growth. The only region that was growing faster than Africa YoY in Q2, Q3 and Q4 2021 was Latin America. Of course - and as you can see in the graph I’m sharing at the bottom of this post - in absolute numbers, it cannot really compare with other geographies (though Look out, LatAm: it’s coming for you!). Now for the billion-dollar question: What comes next? Well, though Q2 2022 YoY growth could be lower than in previous quarters, we know already that Q2 2022 will be another quarter of YoY growth for the African ecosystem. Indeed, as of May 30th, start-ups in Africa have already raised $861m in April+May, compared to $582m in the whole of Q2 2021. Basically if start-ups did not raise a single dollar in June (which we know won’t happen), YoY growth for Q2 2022 would still be +48%. How high will it get, and how will other regions have coped in Q2? Time will tell, as they say, and we’ll certainly be following this closely when the Q2 numbers are in in early July...
We’d love to hear your thoughts about the global context and what it means for Africa: don’t hesitate to join the conversation on Linkedin or on Twitter. While the numbers for Africa are calculated based on our own database of deals, stats for other regions are coming from CB Insights’ State of Venture reports. I’m sure you know about those already, but in case you don’t: they’re a quarterly must-read. See you next week!
