African Blockchain Finance in 2022: Who Got What?

by Arthur · April 22, 2023

The African blockchain industry has shown significant progress over the past year, especially in terms of funds raised. According to the data provided by Resume VCthe industry raised a total of $551 million in 33 deals between Q1 2022 and Q1 2023. The funds were spread across various product categories in the web3 industry, indicating a growing interest in blockchain technology in Africa.

However, the distribution of funds was not evenly distributed across all sectors of the industry, which indicates that certain areas of the industry may experience more growth and development than others. In this context, it is important to understand the current state of the African blockchain industry and how it is evolving, especially in terms of investment and innovation.

Table of Contents

Custody and exchange

In 2022, the custody and exchange project category was the largest recipient of funding in the African blockchain industry, with a total of $250 million raised. This accounted for more than 50% of all funds raised in the same period. The CV VC report emphasized that the significant increase in funding for this industry reflects the growing demand for digital currency trading in Africa, as well as the need for secure storage solutions.

Given the frequent fragmentation and underdevelopment of the African financial environment, fintech has become an important industry in the region’s economy. Some notable firms operating in this category include Kucoin, Mara, VALR, Thalex, OVEX, Kollider and Bitnob.

Blockchain-based fintech

The blockchain-based fintech category received 24% – $115,315,000 – of the funds in 2022. Thanks to the huge potential of the fintech space that produces solutions that offer cheaper, faster and more accessible financial services to individuals and businesses.

CV VC noted that the growth in funding for this sector in 2022 demonstrates the realization of blockchain’s capacity to address, and potentially solve, the difficulties facing the African financial industry. Examples of such companies are Syarpa, Kotani Pay, MFS Africa, Ejara and Maplerad.

Infrastructure and development

This category attracted 15% – $67,785,000 – of the funds raised across the industry, with three companies within the sector receiving a combined share of 14.3% of all African blockchain funding. The infrastructure and development category refers to the creation of the underlying technology and infrastructure that supports blockchain networks and applications. Scroll, Jambo and UTU Technologies.

This involves the establishment of blockchain protocols, decentralized networks, smart contract platforms and other technological infrastructure that enable the distribution of blockchain-based decentralized applications and services.

Others

Several areas of development are gaining traction in the African blockchain investment scene, in addition to the more established ones. DeFi (Decentralized Finance), which offers decentralized lending, borrowing and other financial services, is a disruptive force in the traditional banking sector. Energy is a new industry that aims to use blockchain technology to increase energy access and assist the transition to renewable energy sources.

NFTs, Gaming and Metaverse (which received $32,200,000) are developing industries that have gained traction in recent years, offering the unique potential for digital ownership, gaming and immersive experiences.

The DeFi sector attracted $3,970,000, while the field of Data Management, Verification and Analytics (and received $2,250,000) is concerned with using blockchain technology for better data management, verification and analytics. With the growing relevance of data in decision-making, this sector of the African blockchain ecosystem has enormous development potential. The report also revealed that the Energy actor was paid $3,400,000.

Another new area that often uses blockchain technology to improve real estate transactions, land registries and other elements of property management is Proptech. According to CV VC, $500,000 was raised in 2022 for the Proptech industry. As blockchain technology develops and gains traction in the area, these industries are projected to play an increasing role in determining the future of blockchain in Africa.