🥧 One pie. Five uneven slices.
Where did all the funding go in Africa in 2022?
As we continue to unpack the story of start-up funding in Africa in 2022 (see here for our first post in the series), one of the first questions that gets asked is Where did all that funding go? So let us take you on a whistle stop tour of Africa’s five regions:
First off is Western Africa, which despite a small decrease YoY (-12%, from $2bn in 2021 to $1.8bn in 2022) remains firmly in the lead. The strong performance in other regions though means it represented a relatively smaller portion of the funding on the continent in 2022: 37%, down from 43% in 2021 (-7pp).
Continuing clockwise, we reach Northern Africa, one of the clear winners of 2022 with a +62% YoY growth in terms of funding raised (from ~$700m to $1.1bn), crossing the $1bn mark for the first time. Its share of funding raised on the continent mathematically grew, from 15% to 23% (+8pp).
The other region reaching the $1bn milestone for the first time was Eastern Africa, which attracted more than twice as much funding in 2022 compared to the previous year ($1.2bn vs. ~$600m) resulting in its relative share of continental funding more than doubling YoY: from 12% to 26% (+13pp).
Southern Africa however is the region suffering the biggest loss (-44% YoY) from $1.1bn in 2021 to just over $600m in 2022. As a result its share of the total funding was also about halved: 12%, down from 23% (-11pp).
Finally, Central Africa remains miles behind its neighbours (fun fact: it’s the only region touching all four others) with ~$50m raised (more than double the 2021 number) and a total share of funding that surpassed 1% for the first time.
A caveat of course is that in each of the regions - save for Central Africa -, a ‘Big Four’ dominates. Their weight ranges from Nigeria’s 68% of Western African funding to South Africa’s 92% in Southern Africa. The Nigerian giant itself ($1.2bn) weighs as much as a full region. Interestingly though, the relative weight of the Big Four in their respective regions has been decreasing between 2021 and 2022 in Western Africa (-17pp YoY), Northern Africa (-14pp YoY) and Southern Africa (-6pp YoY); Eastern Africa is the only exception with Kenya’s share of East Africa funding growing +14pp YoY.
Because it’s clear there is much more to say about each region, for the next 5 weeks we’ll be adding a Thursday post dedicated to a specific region, with a map (don’t we all love maps!) and a short analysis. And here’s your chance to decide which one will get published first next Thursday👇 #yourvotematters👇[Update] By popular demand, the first map on Western Africa has now been published 👇
But if you want to cut the data differently (we’re using regions as defined by the African Union btw), our database should allow you to do just that. What about trying it with a discount?
Thanks for reading Africa: The Big Deal! Subscribe for free to receive new posts and support my work.