According to statistics from a recent analysis, nearly two-thirds of the $4.9 billion in capital secured by African technology businesses in 2021 went to fintech startups. Fintechs accounted for 40% of deals with a capital round of more than $40 million.
Fintechs received roughly two-thirds of the $4.9 billion acquired by African technology companies in the previous year.
Fintech firms also have a 40 percent share of the overall number of tech companies in terms of funding over $50 million.
In 2021, fintech superiority peaked in a time with “the biggest number of single, non-mergers and acquisitions (M&A) deals above $100 million” ever recorded.
Nigeria has the highest percentage of fintech companies that have funded more than $100 million, according to the survey.
However, the research speculated that the Covid-19 pandemic could be to blame for the increase in capital for both fintech and non-fintech businesses.
Logistics and energy are the sectors with the highest funding, according to the research, but the most latest spate of digitization, maybe aided by Covid-19, is boosting sectors like e-commerce, agriculture, and healthcare.
The same report did admit, however, that the majority of the monies received in 2021 were focused on a few initiatives.
In addition to equity financing, the Africa Investment Report data demonstrates that debt financing is becoming a more feasible funding option.
The research cites the fact that debt financing accounted for 6% of total declared funding in 2021 to back up this claim.
In terms of delayed investor sources, the data shows that the United States is by far the most important source of funding for African tech businesses, accounting for 62.5 percent of the total.
The United Kingdom came in second with 7.5 percent of the vote, followed by South Africa with 6% and Canada with 4%.
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