Finance

VC financing/Africa: Fintech remains the priority but investors’ interest is waning

VC financing/Africa: Fintech remains the priority but investors’ interest is waning
Wednesday, 16 November 2022 02:51

With two months to go before the end of 2022, the volume of financing raised by African fintech startups is down by more than 15% compared to 2021. The dynamic may point to a shift in investors’ perception.  

As we move towards the end of 2022, data and analysis published by Africa the Big Deal suggest that fintech startups accounted for 32% of the venture capital financing secured in Africa. The segment has continued to be the main destination for investments targeting African startups but transaction volumes seem to demonstrate that investors’ interest is waning.

According to Ecofin Pro’s African Private Placement Log, despite a US$250 million deal for Nigerian fintech Flutterwave in February 2022, the sector attracted US$1.6 billion in VC financing this year.

In 2021, a US$400 million deal for Nigerian fintech Opay, and a US$200 million deal for Senegal-based Wave Mobile pulled funding for fintechs in the region to nearly US$2.5 billion. The decline in the volume of VC financing attracted by fintech companies may be cyclical.

But an analysis of sectoral dynamics shows that the companies that have benefited the most from the funding are those that offer payment solutions and compete directly with telecom operators’ mobile money services.  According to Muriel Edjo, chief editor of We Are Tech Africa, at first, telecom operators were hit by the new entrants’ innovations but, they are now devising strategies to meet the competition from those fintechs.

Apart from telecom operators, commercial banks are also moving, not to directly compete with fintech startups, but to improve their digital services by adding new features and making them more user-friendly. In light of those developments, the investment community seems to be waiting for the next stage of growth in the African fintech segment.  

On the same topic
Funding supports AI upgrades and MENA regional growth Platform aims to reduce inefficiencies, fraud in insurance systems Egyptian insurtech...
Anka founders exit; platform retains brand and operations Deal aims to expand African creators’ global market access Ivorian e-commerce startup...
Seven UEMOA countries (excluding Benin) plan to raise $4.44 billion (CFA2,510.85 billion) from the regional debt market in Q4 2025. Côte...
FinDev Canada loans $100M to AFC for sustainable infrastructure Funds target clean energy, low-emission transport in sub-Saharan Africa Deal...

Most Read
01

BYD to install 200-300 EV chargers in South Africa by 2026 Fast-charging stations powered by grid...

China's BYD Plans 300-Station EV Charging Network for South Africa
02

Drones to aid soil health, pest control, and input efficiency High costs, skills gap challenge ac...

Kenya Plans National Drone Rollout to Modernize Farming
03

TotalEnergies, Perenco, and Assala Energy account for over 80% of Gabon’s oil production, estimate...

Gabon Seeks Foreign Partners to Revive Declining Oil Sector
04

Nokia extended its agreement with Vodafone to supply next-generation radio access network (RAN) eq...

Vodafone Extends Nokia Partnership to Accelerate 5G Across Europe and Africa
05

Diaspora sent $990M to CEMAC via mobile money in 2023 Europe led transfers; Cameroon dominat...

Mobile Money Transfers to CEMAC Near $1B in 2023
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

regie@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72


EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.