Around 50% of $2bn African tech fund raised in 2021 went to fintech startups
Africa’s fintech sector is a funding magnet, absorbing nearly half of the continent’s more than $2 billion raised by tech startups.
According to the seventh edition of our African Tech Startups Funding Report, which is available free to all as part of an open-sourcing initiative in partnership with Novastar Ventures, MFS Africa, Quona Capital, 4Di Capital, MEST Africa and Future Africa, 564 African tech startups raised a combined US$2,148,517,500 in 2021.
Fintech is the most popular investment sector now more than ever.
An extraordinary year saw the creation of new unicorns, the breaking of round size records, and fintech startups breaking the US$1 billion funding barrier, which the African tech space as a whole will only achieve for the first time in 2021.
Fintech firms raised $1,038,456,500, a 547.7 percent increase over the previous year’s total of $1,038,319,065 (US$160,319,065 in 2020). This increased fintech’s share of total funding to just under 50%, a significant increase from 2020, when it accounted for less than a quarter.
These impressive figures were primarily driven by Nigeria, which saw major rounds for companies such as Flutterwave (US$170 million), Kuda (US$25 million and US$55 million), Moove (US$63.2 million), and FairMoney (US$42 million), accounting for more than half of all fintech investment. MNT-Halan of Egypt (US$120 million) and Yoco of South Africa (US$83 million) also made significant contributions.
However, the relentless growth of Africa’s fintech sector should not overshadow positive developments elsewhere. Non-fintech startups raised more than $1 billion in total in 2021, with many sectors more than doubling their funding from the previous year.
Total funding for e-commerce and retail-tech increased by 271.5% to US$326,156,000, while transportation investment increased by 102.44% to US$105,445,000, logistics funding increased by 134% to US$86,751,000, and ed-tech funding increased by 516.3% to US$81,030,000. So, while fintech shone the brightest, the year as a whole was impressive.
