- Analysts have termed Central Africa as a sleeping Giant, yet to awaken as the region recorded the least funding for startups in 2022.
- In 2022, Central Africa was by far the region where start-ups raised the least funding through deals worth $100,000 and over with a total of $51 million according to the latest report by The Big Deal.
- While the region represented only 1.1 percent of the funding raised on the continent, Year on Year growth was commendable, as start-ups raised more than double the amount that had been raised in 2021 ($24 million).
Analysts have termed Central Africa a sleeping giant, yet to awaken as the region recorded the least funding for startups in 2022.
Max Cuvellier from The Big Deal says there is a huge potential in the region despite the depressed numbers.
“This is not to say that there isn’t talent or potential in the DRC, Cameroon, and beyond. Behind these low numbers are missed/future opportunities for investors,” Cuvellier said.
In 2022, Central Africa was by far the region where start-ups raised the least funding through deals worth $100, 000 and over with a total of $51 million raised according to the latest report by The Big Deal.
While the region represented only 1.1 percent of the funding raised on the continent, Year on Year growth was commendable, as start-ups raised more than double the amount that had been raised in 2021 ($24million).
“The number of $100k+ deals also grew year on year – from 12 in 2021 to 14 in 2022 – and represented 1.4 percent of the continent’s total,” the report states.
However, according to The Big Deal report, only two of the eight countries that make up Central Africa have seen at least one $100,000+ deal last year: the DRC and Cameroon.
The DRC recorded 5 $100,000 + deals in 2022 (vs. 4 in 2021) and the total amount raised more than tripled, from $12 million in 2021 to $39 million last year.
However, this impressive growth is almost fully attributable to Jambo, which raised a $7.5mllion Seed round in February, followed three months later by a $30m Series A round in May. The startup is building Africa’s web3 user acquisition portal through “learn, play, earn” and democratizing access to crypto-based income-generation opportunities.
As such, the start-up was responsible to a large extent for the region’s year-on-year growth in funding raised as these two deals alone represent 74 percent of all the funding raised in Central Africa last year.
Funding raised in Cameroon was flat year-on-year ($12million) while one more $100,000+ deal was recorded compared to 2021 (9 vs. 8).
The largest transaction by far was Ejara’s $8m Series A, a fintech offering an investment app that allows users to buy crypto and save through decentralized wallets. It means that outside of Jambo and Ejara – both in the ‘crypto space’ -, start-ups in the region raised a mere $5 million in 2021.
“Central Africa is punching much below its weight as its share of total funding raised in Africa (1.1 percent) is significantly lower than its share of the continent’s GDP (~5%), and even more so than its share of Africa’s population (12 percent). About $0.30 of start-up funding was raised per capita in 2022 in the region, barely a tenth of the continental average ($3.4 percent ),” the report concludes.
Western Africa, despite a small decrease in funding in the period under review, remained firmly in the lead in the continent. The region’s startups received funding worth $1.8 billion in 2022 from $2 billion in 2021.
Northern Africa had the highest increase in the period under review receiving $1.1 billion startup funding, crossing the $1bn mark for the first time. This represents a 62 percent increase from the previous year where startups got $700 million funding in 2021.
Eastern Africa startups raised $1.2 billion in 2022 a 115 percent increase compared to 2021 where startups raised $600 million.