Fintechs hold on to the crown🤴🏾(but better watch their back)

Fintech topped the charts once again in 2022, despite YoY losses

By popular demand, we continue our review of 2022 (check our previous posts here, here and here) with a focus on sectors this week to get a sense of what type of start-ups investors put their money in last year.

We must start with Fintech [#1]. Why? Because quarter in, quarter out, fintech has been topping the charts for as long as most of us can remember… That was until Q4 though, when for the first time since at least early 2019, it came second to Logistics & Transportation! Back in 2021 fintech represented the majority of funding raised on the continent, with a share in constant progression. Yet in 2022, the amount invested in fintech start-ups in Africa decreased ($1.8bn, down from $2.5bn i.e. -28% YoY), and so did its share of funding raised (37%, -17pp). Still, the sector claimed the largest number of $100m+ transactions aka ‘mega deals’ though (4 out of 9): Flutterwave, MNT-Halan, Interswitch, and MFS Africa.

Only two other sectors have seen a YoY decrease in funding raised, relatively even more dramatic than fintech. Funding in Healthcare [#8] went down -41% YoY (from $226m to $132m) and -69% YoY for Education & Jobs [#9] (from $276m to $84m), largely due to the fact that Andela had raised a $200m Series E back in 2021 while no large deals in the space were raised in 2022, beside Ubongo’s $27.5m LEGO Foundation grant.

Now for the more positive news: a lot of sectors have grown in 2022, in both absolute and relative terms. The biggest winner is Energy [#2], where funding more than doubled YoY (from $413m to $874m) - driven in particular by PEG Africa’s acquisition by Bboxx estimated at $200m and Sun King’s $260m Series D -, making it the second largest sector in 2022 (18%, +9pp). It swapped places with Logistic & Transport [#3] (13%, +3pp) which experienced decent YoY growth (+38% YoY), even overpassing Fintech in Q4 as mentioned above, thanks to Yassir’s $150m Series B. Retail [#4] came next at $455m (+44% YoY), falling short of the podium like it had in 2021; Wasoko’s $125m Series B round was the largest transaction of the sector. Other significant sectors growing YoY included Telecom, Media & Entertainment [#5], Agriculture & Food [#6] and Deeptech [#7] with the $100m Series B of InstaDeep (which was acquired by BioNTech last week for ~$440m (with potentially ~$240m more in the future)). Interestingly, if you group Energy & Water, Agri & Food, as well as Waste Management start-ups, the investments in these “Climate & Environment” sectors has doubled YoY (from $580m in 2021 to $1.2bn in 2022).

Let’s take one final look at the numbers, this time focusing on YoY growth (or decrease) to see which sectors contributed positively (or not so much) to funding growth in 2022 compared to 2021:

The CB Insights 2022 numbers are out now, so next Tuesday’s post might well be a comparison of Africa versus other continents. This way I can put the gender analysis off by another week, because let’s be honest, that one’s not going to be a good story… And in case you were living under a rock all this time, check out this link to access our database at a discount ;) Ciao ragazzi!