African tech startups defy volatile markets and double debt funding in 2022 - report

play article
Subscribers can listen to this article

African tech startups managed to double their debt funding raised in 2022, one of the few areas of venture capital managing to post growth in a market roiled by energy shocks and volatility in the wake of Russia's invasion of Ukraine, according to a report by funding platform Partech Partners.

While venture capital funding fell 35% globally in 2022, funding for the African sector grew 8% to $6.5 billion (R112 billion), through 764 rounds, with debt funding doubling more than doubling to $1.5 billion (R26 billion) in 71 rounds, compensating for a slight decline in the contribution from equity funding, Partech's 2022 Africa Tech Venture Capital Reads.

Nigeria, South Africa, Egypt and Kenya are still the hotspots for African venture investment, but in 2022, their contribution to the total volume was relatively flat at 72%. 

South Africa took second place behind Nigeria in equity funding and number four in deal count, with $830 million (R14.2 billion). While the amount of money raised was flat year on year, the number of deals fell 22%. SA accounted for 17% of the funding raised and 14% of the total deal count.

Venture capital
Partech Partners 2022 Africa Tech Venture Capital Report

The African continent remains a red-hot market for fintech investment, benefitting from favourable demographic trends as well as rapidly growing smartphone usage, but Partech said the market had not been unscathed.

"We can see the slowdown began to seep into the African market in the first quarter of the year, with a 14% drop in activity compared to the last three months of 2021. Despite this, African startups still closed record funding in the first half of the year. In the third quarter, the slowdown really kicked in, with a year-on-year decrease in the number of deals and funding raised," it said.

Partech, which was established in San Fransisco but is now headquartered in Paris, says it is one the most active tech investors in the world, bringing together capital, operational experience, and strategic support for entrepreneurs at seed, venture and growth stages.

The company manages more than €2.5 billion (R46.8 billion) and its current portfolio includes 210 companies in 40 countries in Africa, Asia, Europe and the US.

"It’s too early to tell how this strong overall growth in the African tech ecosystem will hold as the downturn is still unfolding, but the sector’s strong fundamentals are likely to maintain the progress made in recent years," Partech said.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders