Discover more from Africa: The Big Deal
Four billion dollars ✅✅✅✅
While Q3 numbers may disappoint, a new milestone reminds us of the overall dynamism of the African ecosystem
Before we look into Q3 results - which are comparatively not as good as what we’d been used to for quite a while now - let’s remind ourselves that the ecosystem is still alive and kicking. Indeed, start-ups in Africa have already raised over $4 billion in 2022. Just like the $1 billion, $2 billion, and $3 billion milestones, they’ve done so faster than any other year before. And as we saw a couple of weeks ago, there has never been so many start-ups in Africa raising their first $1m+ round.
Now, as expected following a more quiet July and August months, Q3 numbers are slightly disappointing, at least relatively speaking. In absolute numbers, start-ups in Africa have raised more than $850 million through 150+ deals over $100k (excluding grants). Back in 2019 or 2020, it would have been a stellar performance, but given what the ecosystem had delivered in the past year, it feels below par. In fact, it ends a streak of four quarters of the ecosystem raising over $1bn quarterly (Q3 2021 to Q2 2022) and of six quarters of positive YoY quarterly growth (and not any growth, triple-digit growth!). All in all, Q3 registered a fall of -53% YoY in amount raised and -25% YoY in number of deals ($100k+, excluding grants). This relative counter-performance has many causes including the global context - which we’ll look into once the CB Insights numbers are out -, but is also the result of a slow down in ‘mega deals’ ($100m+) announced. Only one such deal was made public in Q3 - Bboxx’s acquisition of PEG Africa estimated at $200m - compared to four last quarter (worth $620m) and five last year in Q3 2021 (totalling over $1 billion!).
As things currently stand, the ecosystem is on track to match or exceed the total amount of funding raised in 2021 ($4.5bn), which in itself is quite an achievement given global trends!
Do you need access to four years of start-up deals in Africa (close to 2,000 of them, totalling more than $11 billion), with over 30 datapoints for each of them? Will you use it for research, or to build your pipeline as an investor, or to nail down your fundraising strategy as a start-up? In any case, you might be interested in our database, available here at a discount. See you next week!
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