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January 17, 2022
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Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021 – Fintech Bitcoin News

Fintechs account for practically two-thirds of the $4.9 billion that was raised by African expertise corporations throughout the previous 12 months. Fintech teams additionally dominate in phrases of funding that exceeds $50 million, with a 40% share of the complete quantity of tech corporations.

The Covid-19 Factor

Out of the $4.9 billion in funding that was raised by African expertise corporations in 2021, virtually two-thirds of this went to fintech corporations, knowledge from a brand new report has proven. In phrases of offers whereby the capital raised exceeded $40 million, fintechs accounted for 40% of such offers.

Report: Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021
Source: Africa Investment Report 2021.

As proven in the latest Africa Investment Report, the fintech dominance in 2021 finally culminated right into a interval with “the highest number of single, non-M&A [mergers and acquisitions] deals above $100 million” on document to this point. The report additionally exhibits that Nigeria has the greatest share of fintech corporations that raised greater than $100 million.

Meanwhile, the report advised that the Covid-19 pandemic might properly be the most important clarification for the surge not solely in the funding of fintechs, however non-fintech corporations as properly.

“Logistics and energy follow by volume of funding but the most recent wave of digitization — perhaps boosted by Covid-19 — is propelling sectors such as e-commerce, agriculture and healthcare,” concluded the examine report.

Funding Highly Concentrated

However, the identical report does concede that almost all of the funds raised in 2021 had been concentrated in a couple of tasks. The report explains:

Although extremely concentrated in a couple of instances, [which] solely represents lower than 3% of complete disclosed offers however captures over 55% of complete disclosed funding, this funding dimension carries vital weight and acts as a pull issue for a number of traders.

Besides fairness financing, the Africa Investment Report knowledge exhibits that debt financing is more and more turning into a viable funding route. To help this assertion, the report factors to the indisputable fact that 6% of complete disclosed funding in 2021 was debt financing.

Report: Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021
Source: Africa Investment Report 2021.

In phrases of the origins of the late-stage traders, the knowledge exhibits that the United States is by far the greatest supply of capital for Africa tech corporations with a 62.5% share. In a distant second place was the United Kingdom, which had a share of 7.5%, adopted by South Africa 6%, and Canada which accounts for 4%.

What are your ideas on this story? Tell us what you assume in the feedback part under.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, writer and author. He has written extensively about the financial troubles of some African nations in addition to how digital currencies can present Africans with an escape route.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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