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Africa-based investors are more active in deals with startups headquartered in one of the big four markets (Egypt, South Africa, Nigeria, and Kenya) compared to those headquartered elsewhere.
This is according to a report by ‘Africa: The Big Deal and African Private Equity and Venture Capital Association.
According to the report, More than half of $1m+ deals in Africa since 2019 have had at least one Africa-based investor as one of the main investors. And this percentage has grown quite a bit since 2019 (36% then vs. 58% this year so far).
In 2019, African investors accounted for 36 per cent of investments in tech startups. Their participation rose to 52 per cent and 59 per cent in 2020 and 2021, BusinessDay reported.
Startup funding in Africa hits $4bn in nine months
The report, which monitors deals over $100,000, disclosed startup funding in Africa hit $4bn as of the third quarter of 2022 and may rise to $7bn by the end of 2022.
It added that over 800 investors had invested in Africa since the beginning of the year, a 33 per cent increase from 2021, with about 250 of them closing more than one investment. 60 had been involved in five deals and more.
As reported by PunchNG, the firms said, “Now, as expected, following a more quiet July and August months, Q3 numbers are slightly disappointing, at least relatively speaking. In absolute numbers, start-ups in Africa have raised more than $850m through 150+ deals over $100,000 (excluding grants).
“Back in 2019 or 2020, it would have been a stellar performance, but given what the ecosystem had delivered in the past year, it feels below par. In fact, it ends a streak of four quarters of the ecosystem raising over $1bn quarterly (Q3, 2021 to Q2, 2022) and of six quarters of positive YoY quarterly growth (and not any growth, triple-digit growth).
“All in all, Q3 registered a fall of -53 per cent YoY in the amount raised and -25 per cent YoY in the number of deals ($100,000+, excluding grants).”
It added, “As things currently stand, the ecosystem is on track to match or exceed the total amount of funding raised in 2021 ($4.5bn), which in itself is quite an achievement given global trends.”
The report concluded that 100 start-ups in Africa had raised their first $1m+ round so far in 2022. This is a strong indication of increased investor confidence in the continent, with only 40 start-ups raising $1m+ in the corresponding period of 2019; 55 in 2020; and 72 in 2021.

This story was recently updated.
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