According to a new report from the Africa Private Equity and Venture Capital Association, Nigeria will receive the most venture capital investments in 2022, as captioned by the Entrepreneurng report.
The continental body’s “2022 AVCA Venture Capital in Africa Report” stated that Nigeria surpassed other nations to account for 22% of the total.
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As regard the survey, West Africa kept its top rank for the second year in a row, with Nigeria being the most active nation on the continent and in the region. Nigeria, the most active nation in terms of volume at 22%, attracted the greatest amount of venture capital deal volume in Africa (West Africa), attracted the largest percentage (30%).
The financials sector, which accounted for 42% of transaction value and 31% of deal volume on the continent, was where most deals were made.
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Additionally, overseas investors made up 77% of active investors in Africa’s venture scene in 2022, while African investors made up 23%. Africa raised $5.2 billion in venture capital in 786 deals in 2022, accounting for 3% of the overall volume and 1.2% of the total value of venture funding globally.
Venture inflows to Africa last year increased to $6.5 billion funded across 853 projects when venture debt was taken into account.
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The survey also revealed that firms with gender-diverse founding teams raised a cumulative total of over US$950 million and that startups raising their first round of venture financing only accounted for 37% of VC transaction volume in 2022.
While startup investment significantly decreased globally and to varied degrees regionally, Africa’s venture ecosystem was largely stable and only saw a funding decrease of less than US$50 million in 2021.
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Comparatively, Latin America experienced the largest year-over-year drops in startup investment, falling by 59%, followed by Asia, which experienced a drop of 35%. As a result, the funding gap between Africa and Latin America, its closest socioeconomic comparison, shrunk by almost five times, from US$14.8 billion in 2021 to US$3.1 billion in 2022.
Conclusion
According to the research, even while venture capital in Africa is still relatively modest in terms of both volume and value when compared to other continents like North America and Asia, it has been expanding significantly in recent years and has room to develop much more in the future.
Source: Punch
