Africa experiences a staggering 429% surge in blockchain funding.
According to the African Blockchain Report 2022, published by CV VC in association with Standard Bank, African blockchain startups experienced an astounding 429% increase in funding in 2022, raising a total of $474 million. The continent also witnessed a 12% growth in the overall number of deals, with a focus on sectors such as infrastructure, personal identification, record-keeping, and access to financial independence. African venture funding as a whole grew by 34%, reaching $3.14 billion, and blockchain accounted for 15% of all venture funds in Africa.
The report’s authors highlight the combination of the significant rise in blockchain funding and Africa’s smallest global increase in the number of blockchain deals. This indicates that African blockchain startups are attracting larger investments, and investor confidence is growing. Notably, Africa’s share of all global funding has risen considerably more than any other region.
Additionally, the report reveals the emergence of Africa’s first blockchain “unicorns” – privately held startup companies with valuations of $1 billion or more. Kucoin, a crypto exchange based in Seychelles, achieved unicorn status in the third quarter of 2022. Similarly, Scroll.io, a scaling solution for the Ethereum blockchain, reached unicorn valuation in the first quarter of the current year.
These developments highlight the rapid growth and maturation of Africa’s blockchain ecosystem, positioning the continent as a hub for innovative blockchain solutions and attracting significant investment.
Despite the rapid growth witnessed in Africa’s blockchain industry, the continent’s share of global blockchain funding remains relatively modest. It increased from 0.3% in 2021 to 1.8% in 2022, indicating progress but still reflecting room for further expansion.
Geographically, the concentration of deal value is evident, with Seychelles leading the way at 43.9% and South Africa following closely at 37.3%. These two countries together accounted for a significant 81% of blockchain funding in Africa. Nigeria led in terms of the number of deals, with 13 transactions, but the total value amounted to $24.7 million, significantly lower than Seychelles, which secured $208 million across six deals, and South Africa, which garnered $176.6 million across six deals. Liberia secured a noteworthy position in terms of value with two deals, primarily attributed to a $37.5 million fundraising round by Jambo, a software development house. Meanwhile, Kenyan firms raised $25.8 million across four deals.
The concentration of funding in specific regions highlights the need for further diversification and broader distribution of blockchain investment across the African continent.
More education needed
In the report’s introduction, Gideon Greaves, the managing director of CV VC Africa, emphasizes the importance of enhancing corporate education regarding the benefits of blockchain technology. Despite the rapid growth and significant progress observed in the industry, there remains a substantial knowledge gap that needs to be addressed. Greaves notes that in his interactions with legacy companies across the continent, it becomes apparent that many C-level executives lack a comprehensive understanding of what blockchain technology entails and why they should pay attention to it. This lack of knowledge and understanding poses a hindrance to further growth and progress in the field. To unlock the full potential of blockchain technology, it becomes imperative to bridge this gap and provide education to those in positions of power and influence, enlightening them about the immense possibilities that blockchain presents.