KUBATANA MAGAZINE | OCTOBER 2022
AFR I LABS
$5 BILLION THERE WAS NOTHING SPECIAL ABOUT RAISING BY ABRAHAM AUGUSTINE An unabridged version was first published on techcabal.com
dollars. If you go by data from “Africa: The Big Deal”, one of the most cited deal trackers in Africa, it’s even lower. For comparison, investors poured $14 billion into startups in Lat- in America, and tech compa- nies in Southeast Asia raised a record $25.7 billion in funding. Five billion dollars was indeed better than what was, but it’s still worth noting that Africa’s breakout year was little more than a rounding error in the world of global venture. It is sobering, and I believe more sobriety is not a bad idea for all stakeholders in Africa’s technology space. In general, data on fundraising globally lags, but in Africa, that lag is more pronounced. For some, it was already clear by June at least, that fewer deals were being completed com-
pared to last year. While it took a while for the money numbers to show up in venture fund- ing trackers, other signs of the growing pains were there. The silent down rounds and an increase in merger and ac- quisition activity were one sign. Layoffs were another sign. Without the PR garb of new venture funding rounds to provide cover, internal gov- ernance issues began to show up in the media and flawed business models (Kune, any- one?) began to break under the strain. But the venture pain is only starting. Multiple macro cri- ses are rapidly catching up with African innovation. Switching off the harvest hor- mone means burrowing deep- er to find true depth for your seedlings.
DATA ON FUNDRAISING GLOBALLY LAGS, BUT IN AFRICA, THAT LAG IS MORE PRONOUNCED.
Raising $5 billion in 2021 did not change the game enough for Afri- can startups. Global venture funding in 2021 shattered all records. According to Crunchbase, total dollars invest- ed in tech and tech adjacent start- ups by venture capitalists reached
$643 billion in 2021, compared to $335 billion for 2020—a stunning 92% growth year over year. If you take Partech’s data, which is one of the most liberal interpre- tations of startup funding in Africa, African startups raised $5.2 billion in 2021. That is 0.8% of all venture
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