About one billion dollars was raised by Kenyan entrepreneurs, including tech startups, in the first half of 2022, an increase over the previous year.
According to the data collected, Kenya has shown the most impressive growth in the funding gained this year out of the big four in Africa – the quartet that includes Egypt and South Africa. Nigeria, South Africa, and Botswana are the other three members of the quartet.
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According to the Big Deal database, the East African nation raised $820 million through 76 additional agreements in the first half of this year. This is almost double the amount of capital the nation’s startups had received in the previous year. Compared to the same period during the last year, when Kenyan entrepreneurs raised a total of $157 million, the current amount reflects a growth in funding of 422% for Kenya.
According to the statistics provided by Partech, Kenya raised $571 million during the previous year. However, The Big Deal’s 2021 report estimated that the country raised only $411 million. In both categories, Kenya ranked fourth among the nations of Africa in terms of the amount of funding it received.
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However, according to the most recent Big Deal data, which only considers deals made public, the country is currently ranked second after Nigeria. Nigeria is now in the first place, having signed 160 contracts and attracting $864 million in venture capital funding. This represents a 128% increase compared to the previous year’s first six months. Nigeria, which ranked as the top destination for venture capital investments in Africa in 2017, brought in about $1.8 billion, three times as much as Kenya.
So far this year, Egypt and South Africa have emerged as the third and fourth countries in finance. Egypt has obtained $538 million through 71 deals, while South Africa has won $392 million through 53 deals. Nevertheless, Egypt made the second most progress, earning the second largest gain after achieving an increase of 244% throughout the period under consideration. The amount of cash raised in South Africa, the continent’s second most popular destination for venture capital investments in the previous year, increased by only a minuscule 2%. The four companies account for 87 per cent of the money raised by African startups.
Kenyan Contracts with Huge Value
Kenya’s growth in venture capital investing has been attributed to an increase in agreements and mega-rounds, which are transactions exceeding $100 million.
The series D funding of $260 million that was received by Sun King and the series B funding of $125 million that Wasoko acquired are two necessary mega rounds that took place in Kenya before June came to an end. Wasoko is an e-commerce and retail platform for businesses to do business with each other. Sun King, on the other hand, sells solar energy in Africa and Asia.
It is remarkable that Kenya’s growth is skyrocketing at a time when venture capital financing is continuing to drop all across the world.
On the other hand, the growing amount of venture capital investing in Africa may be seen in Kenya’s increased deal flow. According to the data provided by The Big Deal, Africa had raised a total of $3 billion by the end of June, double the amount it had increased during the previous year. Even though this amount is small compared to what has been raised in other parts of the world, it is a good sign.
According to Max Cuvellier of The Big Deal, who wrote a piece regarding funding in Africa, “If we look at the year-on-year (YoY) evolution of quarterly funding (comparing Q2 2022 to Q2 2021), Africa is simply the only region that remained to expand YoY.”
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The majority of funding on the continent is still going toward financial technology companies, and all African countries have to step up their game in this aspect. According to the results of a recent study by McKinsey, payments and banking in Africa are growing at the second-fastest rate in the world, right behind Latin America.
