Blockchain Funding Grows 429% to $474M — Report
The growth of blockchain and cryptocurrency technology on the continent saw African blockchain startups raise $474 million in 2022, according to The African Blockchain Report 2022.
The report, which was published by blockchain venture capital firm CV VC AG in partnership with Standard Bank, indicated that blockchain financing increased by 429 percent year-on-year, the highest growth rate of any region.
It stated that evidence of the progress of the blockchain sector was the growth of a number of funding values during 2022, with significant improvements in total funds raised, number of deals and median deal size.
It said: “On a blockchain-specific venture funding front, Africa has also continued to perform well and has shown consistent growth.
“African blockchain startups raised $474 million in 2022, a funding increase of 429 percent year-on-year, the highest funding growth of any region. When you combine the strong increase in blockchain funding with the fact that Africa had the smallest increase in blockchain deals, it has the annual median deal size increased significantly, indicating that companies are raising bigger checks and investors are gaining confidence.”
The blockchain firm noted that due to its young population, Africa was in a unique position to leverage its current circumstances to drive innovation in the blockchain space.
It expanded, “In the areas of financial infrastructure, personal identification, record-keeping and access to financial independence, the continent’s current situation has created the perfect environment for blockchain technology to flourish and tackle real-world problems – demonstrating real utility.”
The firm explained that Nigeria was the leading country in terms of the number of blockchain startups funded, followed by South Africa, Seychelles and Kenya.
It said that while Nigeria had the most deals on the continent during 2022, it only accounted for a 3.4 percent share of all African blockchain funding with an average deal size of $1.25 million.
Blockchain venture funding to Nigeria was $15.99 million. It was $208.04 million in the Seychelles; $176.65 million in South Africa; $37.50 million in Liberia; $25.79 million in Kenya; $8 million in Cameroon; and $2 million in Ghana.
Commenting on this year’s blockchain deals, the firm said: “2022 saw the closing of the first megadeals for African blockchain companies, with Kucoin raising $150 million and MFS Africa raising $100 million.
“These deals represent 33 percent of the total number of mega deals on the continent in 2022. Kucoin and Scroll broke the ice, becoming the first African blockchain companies to reach unicorn values, meeting the expectations we set out in the previous edition of this report,” it said.
The firm further stated that fintech was a critical sector of the continent’s economy and could change the financial landscape.
It added, “Fintech is a critical sector of the African economy, as the region’s economic landscape is often fragmented and underserved. Blockchain-based fintech solutions have the potential to revolutionize the financial industry, offering cheaper, faster and more accessible financial services to individuals and companies.
“The increase in funding for this sector in 2022 highlights the recognition of the potential of blockchain to address and even solve the challenges facing the African financial industry.”
