Startups in Nigeria and other African countries raised $5.4 billion, according to a new report from Briter Bridges.

The report, which analyzes disclosed and undisclosed deals, revealed that funding in the African start-up space has been on the rise over the past 10 years.

He explained that the 2021 funding surge in the ecosystem continued well into 2022 and began to taper off towards mid-2022.

Nigeria, Kenya, South Africa and Egypt continue to dominate fundraising on the continent.

The firm said: “The distribution of investments in Africa is far from even. Historically, Nigeria, Kenya, South Africa and Egypt have captured the most funds.

“In 2022, three out of four deals were for companies active in one of these four countries, with the rest of the 50 countries sharing the remaining portion.”

He noted that in recent years, Ghana, Uganda, Tanzania, the Ivory Coast and Tunisia have started to take steps forward. Fintechs continue to dominate the funding market on the continent and have averaged between 40 and 60 percent of transactions over the past five years.”

In addition, he stated that payments and solar continued to be the products attracting the highest amount of funding value, followed by supply chain management and B2B commerce.

“Recent years have also witnessed an increase in the adoption of lending products, especially in relation to the rise of buy now, pay later solutions, as well as crypto exchanges and crypto wallets and transfer applications,” he added.

While African startups have been on the rise on the funding front, they attracted just 0.7-1% of global venture investment in 2021, and just over 1% in 2022.

It said: “Companies in the big four countries (Nigeria, Kenya, Egypt, South Africa) captured about 75 percent of all investment value and deal numbers. They are followed by Ghana, Morocco, Uganda, Senegal and Rwanda.

Commenting on what could happen to funding if the global market slows down, the firm said: “All ecosystems have their winners and outliers and in principle there is no problem with the presence of non-African investors.

“However, the excessive reliance on a few foreign funders can alter the perception of the availability of capital within the continent and, when or if these foreign investors decide to pause or slow down their investment activity in times of crisis, such as during COVID-19 or the bursting of the bubble in mid-2022: late-stage companies that had grown during a period of abundant capital may find it difficult to find available funds.

Africa The Big Deal recently announced that the total funding for the African tech ecosystem was $4.85 billion.

According to the firm, the financing could top $5 billion after investors announce undisclosed deals.

The data analytics firm that tracks transactions above $100,000 revealed that there were more than 1,000 transactions of $100,000 or more announced in 2022.

Nigeria raised $1.2 billion.

It read: “The Nigerian giant itself ($1.2 billion) weighs as much as an entire region.”

Startups in Africa raised record amounts in 2022, but it could have been more.

The data insights firm concluded: “So, yes, 2022 was definitely a good year, but with talk of slowdowns and uncertainty dominating the second half of the year, the mood isn’t always so festive.

“Not to mention that if the H2 trend were to continue, 2023 could be the first year of decline in absolute numbers for the ecosystem. But with plenty of capital ready to go, let’s hope that when the clouds finally part, the ecosystem will take advantage of this to show us once again that it has more than one trick up its sleeve.”