Grace Ashiru
Regarding funding, African fintech startups have always gotten the highest investment in African tech ecosystem. But CB Insights data shows that investments in the sector have dropped significantly in the third quarter of 2022.
In the second quarter of 2022, startups’ investments began to fall globally, but African businesses looked to be resistant to this worldwide slowdown. However, as the year progressed, data revealed that investment in African startups had plummeted.
Around the world, investment in startups started to drop in the second quarter of 2022, but African businesses seemed to be immune to this slowdown. But as the year went on, data showed that investment in African startups had dropped dramatically.
African startups raised $161 million in Q3 2022, according to the CB Insights State of Fintech Q3 2022 report. This was significantly less than the $383 million raised in Q2 2022 and the $369 million raised in Q1 2022.
Even though things are slowing down, one thing hasn’t changed in any of the quarters. 90% of deals announced so far have been with early-stage fintech startups, which is 2% more than in 2021. Also, there have yet to be any mega-deals, which are deals worth more than $100 million.
The largest deal in the region thus far is TeamApt’s $50 million fundraising, which accounts for 30% of all fintech funding. Unsurprisingly, the number of mergers and acquisitions has climbed, with 18 M&As completed thus far, according to the report.
Fintech funding fell 38% quarter-over-quarter (QoQ) to $12.9B, the same amount as Q4 2020.
