African blockchain startups raised USD 474 Million in 2022, according to a report by CV VC, a YoY increase of 429%.
African blockchain startups saw a significant increase in funding in 2022, reaching USD 474 million, a YoY increase of 429%, according to a new report by CV VC. According to the African Blockchain Report 2022, Africa had its first blockchain unicorns, KuCoin and Scroll, and an almost five-fold increase in funding for the continent’s blockchain sector compared to the previous year.
African blockchain unicorns
The report highlights that Seychelles-based crypto exchange, KuCoin, received 33.8% of crypto and blockchain venture capital funding to Africa in 2022, making it the first of two blockchain unicorns that year. Scroll.io, an Ethereum L2 solution also registered in Seychelles, raised USD 30 million and was the other fresh unicorn. The report, published in collaboration with South Africa’s Standard Bank, shows Seychelles and South Africa as the top African countries attracting blockchain venture funding, accounting for 81% of the total funding.
Custody, exchanges and fintech
The report also revealed that African venture funding grew by 34% to USD 3.14 billion as global funding fell 35% to USD 415 billion, indicating Africa’s growing potential for investors. Custody and exchanges were the highest-funded category in Africa with a 52% share, followed by fintech (24%) and infrastructure and development (14%).
Funding categories and top funding destinations
The report shows that in 2021, USD 49.5 million (55.3%) of total funding went into seed rounds, while this category declined to USD 44.4 million in 2022, representing just 9.4% of all the money raised. In 2022, 90% (USD 426.65 million) of the funds raised went into later rounds, experiencing an over10 fold increase from USD 38.3 million in 2021. Custody and exchanges are the most attractive sector for investors, with over 52% of funding, followed by fintech at 24.3%. Other categories of investment include NFTs, gaming and metaverse, DeFi, energy, data management, verification, and analytics, and proptech.
The future of Africa and its infrastructure
Gideon Greaves, Managing Director CV VC Africa, believes that the future of Africa and its infrastructure looks increasingly promising as cryptocurrencies and blockchain technology continue to address many of the continent’s fundamental challenges. He said that “Africa is not only the ultimate crypto continent but also one of the world’s fastest blockchain technology-adopting and developing regions.”
The report can be viewed here.
Nigerian VC firm EchoVC recently launched a blockchain-focused fund that seeks to invest in African startups using the technology.