JUNE 02, 2022
3 min Read
Deeptech surprises as fintech dominates VC funding in May
Last year, the African tech ecosystem attracted huge investments from global players, leading to the continent’s best year ever in venture capital secured. Based on varying sources, it is estimated between $4 – 6 billion went into African tech startups in 2021.
That momentum continued well into this year with African startups having raised up to $2.2 billion as of April, according to data from Africa: The Big Deal, a newsletter that tracks VC investments in Africa. At that rate, the continent’s tech ecosystem could end the year with around $7 billion, or more, in funding raised.
In May, a total of $437.1 million was raised across 49 fully disclosed deals, per TechCabal’s funding tracker and Africa: The Big Deal, marking a 5.3% increase from the previous month.

It is no surprise that fintech dominated last month’s total funding, accounting for 45% or $195,900,000 of the funding that went to African startups. It’s apparent the fintech dominance won’t wane anytime soon in Africa.
On the flip side, a surprise entry in the top three sectors by funding raised in May is AI/deeptech, with startups playing in this space raising $47 million (11%) led by Instabug’s Series B raise. The mobility/logistics sector comes closely behind at $45.7 million (or 10%) raised.

Jointly led by LeapFrog investments and Tiana Africa Capital, the $110 million raised by pan-African and Nigeria-based fintech Interswitch saw West Africa top the regional funding chart for May, accounting for 38% of the total amount raised.
North Africa comes second with a 28% share, or $122.7 million, and then East Africa at $64.4 million or 15% with South Africa taking up a meager 9% of VC funding in Africa in May.
Interswitch’s raise was the only mega-deal (>$100m) recorded and also the largest disclosed funding deal in May, significantly ahead of Egypt-based Paymob’s and Instabug’s respective Series B raises of $50 million and $46 million.

Crypto-focused Jambo and MARA round up the top five with their $30 million and $23 million funding deals, respectively.
Q2 2022 Outlook
There’s enough evidence to be bullish on Africa’s venture funding prospects going forward despite the ongoing global VC slowdown.
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 according to The Big Deal. Whereas both the US and Asia saw negative YoY growth and figures in Europe and Latin America were up over 30%.
Still, there are fears it’s only a matter of time before slowing VC activity spreads to Africa and Q2 2022 YoY growth could be lower than in previous quarters, per Max Cuvellier.
But as it stands, the African ecosystem has recorded a 48% YoY growth in venture funding in Q2 2022 having raised $861m in April and May, as of May 30th, compared to $582m in the whole of Q2 2021.
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