Fintechs receive 62% of the $4.9 billion raised by African tech companies in 2021


Fintech accounted for nearly two-thirds of the $4.9 billion raised by African tech companies in the past year. Fintech groups also dominate with over $50 million in funding, accounting for 40% of the total number of tech companies.

Covid-19 factor

Nearly two-thirds of the $4.9 billion in funding raised by African tech companies in 2021 goes to fintechs, data from a new report shows. Fintechs accounted for 40% of deals that raised more than $40 million.

Report: Fintechs to capture 62% of $4.9 billion raised by African tech companies in 2021
Source: Africa Investment Report 2021.

as the picture shows Newest 2021 Fintech dominance finally reaches ‘highest number of single non-M&A period’, Africa Investment Report [mergers and acquisitions] Recorded transactions to date exceed $100 million. The report also revealed that Nigeria has the largest share of fintech companies that have raised more than $100 million.

Meanwhile, the report suggests that the Covid-19 pandemic is likely to be the main reason behind the surge in funding for both fintech and non-fintech firms.

“Logistics and energy are closely followed by funding volumes, but the recent wave of digitalisation – likely driven by Covid-19 – is boosting sectors such as e-commerce, agriculture and healthcare,” the study concluded.

High concentration of funds

However, the same report does admit that most of the money raised in 2021 is focused on a handful of projects. The report explains:

Although highly concentrated in a few cases, [which] Representing less than 3% of total disclosed deals but more than 55% of total disclosed funding, the size of this investment is significant and a pull factor for some investors.

In addition to equity financing, Investing in Africa data shows that debt financing is increasingly becoming a viable source of financing. To back up this claim, the report states that 6% of the total funding disclosed in 2021 will be debt financing.

Report: Fintechs to capture 62% of $4.9 billion raised by African tech companies in 2021
Source: Africa Investment Report 2021.

From the source of late-stage investors, the data shows that the United States is by far the largest source of funding for African technology companies, accounting for 62.5%. It is followed by the UK with 7.5%, followed by South Africa with 6% and Canada with 4%.

What’s your take on this story? Let us know what you think in the comments section below.

Terence Chimwala

Terence Zimwara is an award-winning journalist, author and author from Zimbabwe. He has written extensively about the economic woes of some African countries and how digital currencies can provide an escape route for Africans.














Image Source: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for reference only. It is not a direct offer or invitation to offer, nor is it a recommendation or endorsement of any product, service or company. Bitcoin Network Does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned herein.





Source link