The year 2022 saw a significant leap in the value of funds raised in Africa. According to a blockchain report by CV VC (Crypto Valley Venture Capital), Africa got $3.14b from 570 deals in 2022. This is higher than in 2021 by 34% and is placed at an all-time high for the continent.
While this proves to be positive news for Africa, the report showed Africa received only 0.76% of global venture funding in 2022 – $415 billion – up from 0.37% in 2021. This represents a huge gap in terms of what Africa can attract from the global economy.
Kenya leads the funding pack
Kenya received the most funds in Africa, totaling $895 million, followed by Nigeria, which raised $563 million, South Africa, at $456 million, and Egypt, which raised $436 million, according to CV VC. Africa added one unicorn in the second quarter of 2022, bringing the total number of unicorns to five. This accounts for 0.4% of all unicorns on the planet. Africa welcomed another unicorn in the first quarter of 2023, increasing the total to six.
The report showed the fourth quarter of 2022 saw 3 major transactions in Africa, which together accounted for $473 million in financing, or 48% of all venture capital invested in the continent during the period. Compared to Q4 2021, quarterly African venture financing has climbed by 46% YoY, but transactions have declined by 19%. This is a $990 million investment spread among 130 projects.
VC funding falls in US and Asia
For the fourth consecutive quarter, venture investment fell in the US and Asia, with the majority of capital raised in the US. While Europe hit a 5-year high, Canada saw its share of global venture capital rise by 241%.
CV VC noted that in comparison to 2021, there was a 4% decrease in the number of agreements completed globally. A total of 36,177 were in 2022. The report revealed that with 13,610 and 12,141, respectively, Asia and the US are in first place internationally. Europe came in second, 44.4% behind the US. The average deal size decreased by 32% to $16.8m in 2022, according to the research, although it nevertheless remained 6% higher than the average for 2020.
In 2022, the proportion of deals sealed in the early, mid, and late stages as well as other stages all grew. As the early-stage deal share went up by 3%, the median transaction size fell by 13% while the average deal size dropped by 32% to $16.8 million. CV VC also added that in 2022, the average annual value of transactions decreased across all regions, with the exception of Africa.
With the exception of 2021, which was an outstanding record-breaking year in VC funding across the board, crucial measures of VC investment are higher than the five prior years on record, suggesting an improved year overall.