Fintechs get 62% of total investment on the continent
By Jeph Ajobaju, Chief Copy Editor
Fintechs received $2.88 billion (62 per cent) out of the total $4.65 billion African startups raised in 2021, health and biotech came second with $372 million (8 per cent), and logistics firms third with $325 million (7 per cent).
Africa Investment report by Briter Bridges, which compiled the figures, said there were more than 740 announced deals in 2021, which was 2.5 times more than deals in 2019. At least 6 per cent of funding was in form of debt financing.
Nigerian startups accounted for most deals, followed by South Africa and Kenya.
The report corroborates the Dealsbook report by Nairametrics which shows that Nigerian startups raised over $1.6 billion in 2021, with OPay, Chipper Cash, and Andela in the top three of announced deals.
Briter Bridges also listed OPay, Chipper Cash, ZEPZ, Trade Depot, Zipline, Andela, Tala among startups that raised over $100 million in single rounds last year.
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Mergers and Acquisitions
African startup Mergers & Acquisitions (M&As) market – though almost twice as active as 17 deals in 2020 with 33 acquisitions in 2021 – accounted for a smaller proportion of total capital inflows compared with 2020.
Almost 50 per cent of investments comprised acquisitions in 2020, including WorldRemit’s deal with Wave, acquisition of Paystack by Stipe, and Nigerian Mainone by Euinix.
Acquisitions accounted for about half of total known deals in 2020 but in 2021 they amounted to less than 1 per cent. But they could be as high as 4 per cent if several undisclosed and high-profile transactions are counted.
Origin of investors
The top 20 deals in 2021 captured 65 per cent in Africa as investors are increasing interest in startups on the continent, according to Nairametrics.
Most investors behind the deals in 2021 were from the United States and the United Kingdom. South Africa and Mauritius are the top two African headquarters of the investors.
A growing number of Asian players, especially corporates, such as Softbank, Tencent, and Toyota are also taking part in large rounds involving African startups.
