Startups in Africa’s fintech sector have raised over $2.7 billion in venture capital funding in the past two years, according to a recently published report.
The biennial report by Disrupt Africa, titled “Finnovating for Africa,” reveals a 17.7% growth in the number of fintech startups across the region, which now totals 678. The increase in funding has been even more significant. In 2021, 277 startups had collectively secured $875 million in venture capital. Over the last two years, the number of funded startups has nearly doubled, with the amount raised more than tripling to $2.7 billion.
Since 2015, total funding for fintech companies has reached $3.6 billion, nearly three times that of any other sector in Africa. However, the report also anticipates that 2023 may mark the first decline in fintech funding in some time due to the global capital shortage.
Regionally, Nigeria, Egypt, Kenya, and South Africa dominate the market, accounting for 91.2% of the funding. Notably, Nigeria leads the pack, attracting more than $1.5 billion since 2015.
In terms of fintech sectors, payments/remittances and lending/financing are the front runners, making up 81.2% of total funding between 2021 and 2023. This represents an increase from the 77% share observed from 2019 to 2021, with lending now accounting for 38% of VC funding compared to 15% previously.
“It is clear that African fintech is in its prime, driving forward financial inclusion and powering the commercial revolution occurring on the continent. And investors agree,” stated Gabriella Mulligan, co-founder of Disrupt Africa.