According to figures issued by an industry association on Thursday, venture capital investments in Africa decreased marginally to $6.5 billion last year but avoided the severe decline witnessed in the majority of other worldwide areas.
The African Private Equity and Venture Capital Association (AVCA), which encourages private investment on the continent, disclosed that the investments, distributed over 853 projects, reflect a 1% decrease from 2021, a record year in Africa. This figure is in stark contrast to a 32% contraction in global venture capital, as seen in the American news publication, Reuters.
"When evaluated against any year other than the stratospheric 2021, industry activity in Africa's venture capital ecosystem was very strong," AVCA wrote in a report accompanying the data.
The first half of 2022 saw record venture capital investments, which would go on to account for two-thirds of deals by value for the year, countering a weak second half.
While just a small portion of the $445 billion invested globally went to African entrepreneurs, the continent has experienced continuous development, mostly due to investments in businesses in the financial sector.
According to the statistics, the industry was responsible for 42% of transaction value and 31% of deal volume in 2022. Although 15 significant investments in firms drew a total of $2.2 billion, the median deal size across all investment phases was $2 million.
In a series D fundraising round, Sun King, a supplier of off-grid solar energy solutions in Africa and Asia, raised $260 million. Flutterwave, a financial company focused on Africa, raised $250 million. Additionally, the off-grid solar startup d.light, located in Kenya, secured $238 million in venture loans.
With the help of Nigerian companies, West Africa continued to be the most active area for venture capital investments.
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