A juicy June sees startups cross $3bn VC funding mark this year

In June, African startups from 14 different countries secured a total of $439 million in venture capital investments across 66 fully disclosed deals, per data from Africa: The Big Deal, a newsletter that tracks venture capital investments in Africa. 

This marks a meager 0.45% increase from the previous month when $437.1 million was raised while the number of deals rose by 26% from 49 transactions recorded in May.

However, on a year-on-year basis, Africa saw a +169% increase in the value of VC funding last month, compared to the $163 million received in June 2021. By deal count, there was a +27% increase, from 52 in June 2021 to 66 deals last month.

Over $3 billion raised so far in 2022

On a year-to-date basis, African startups raised $3.141 billion across 468 deals within the first six months of 2022, an impressive +139% increase when compared to H1 2021 investments estimated at $1.314 billion through 344 deals in H1 2021 (+36%).

In addition, Africa recorded a 123% YoY growth in venture funding in Q2 2022 having raised $1.3 billion from April to June, compared to $582m in Q2 2021.

MNT-Halan’s $150 million debt round was the largest mega-deal (>$100m) recorded and also the largest disclosed funding deal in June, just ahead of the $100 million Series C round bagged by MFS Africa and way above Ghana-based Fido’s $30 million raise. 

The top three rounds accounted for 64% of total funding raised in June and are followed by South African energytech Yellow Africa’s $23 million raise and Moove Africa’s $20 million debt funding from British International Investment (BII).

Major takeaway – H2 2022 Outlook 

The minimal increase in venture capital poured into Africa when comparing May and June suggests the ongoing global VC slowdown may be spreading to the continent. 

Africa was the only region to maintain 3-digit year-on-year growth in the first quarter of this year: investments in African startups grew +150% YoY in Q1 2022, the fourth consecutive quarter of 3-digit growth. Whereas both the US and Asia saw negative YoY growth and figures in Europe and Latin America were up over 30%.

“June 2022 was the ecosystem’s strongest June ever in terms of fundraising. Q2 2022 was the ecosystem’s strongest Q2 ever. H1 2022 was the ecosystem’s strongest H1 ever,” The Big Deal says in its report.

Attention now turns to the third quarter of the year. Amid the bear markets, founders say it’s become harder to raise capital as valuation conversations get tougher. But there’s a sense Africa’s venture funding landscape could chart its own course, different from the global trend.

If this rate of funding activity is maintained, the continent’s tech ecosystem could end the year with around $7 billion, or more, in venture capital raised.

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