April 24, 2023
by The African Private Capital Association (AVCA) has released its 2022 Venture Capital in Africa Report, showcasing the resilience of Africa’s venture capital industry amidst global uncertainty caused by the Covid pandemic, the Russia-Ukraine war, and the tech sector slowdown. The report provides a comprehensive overview of Africa’s innovation ecosystem, including sub-regions, countries, and sectors that are driving the growth of venture capital activity on the continent. Despite a challenging year for Africa, private capital inflows continued to propel economic growth and inclusion across the region.
Compared to other regions such as North America, Asia, and Latin America, Africa’s venture capital activity remained largely unaffected, with a 21% YoY growth in deal volume, which was three times that recorded in Asia (7%). The report indicates that despite heightened risk-off investor sentiment experienced in other markets across the globe, Africa’s single percent drop in deal value from the previous year illustrates how the region was largely unaffected.
Seed-stage funding accounted for the majority of the continent’s VC deal activity, demonstrating the highest YoY growth, while the volume of early-stage investment deals grew by 25% between 2021 and 2022. Over three-quarters of Africa’s funding originated from foreign investors, indicating sustained investor confidence in the region. The report also shows how repeated investments in businesses were made, highlighting investors’ long-term commitment to companies and their onward growth.
The report details how 8% of early-stage investments were made in the same company more than once in 2022, while 409 unique companies received additional venture capital following investments in previous years. The combination of early-stage investment and 15 super-sized deals valued at $100 million or more represents a growing maturity across the African VC industry
