Ghana was ranked the third largest investment destination in the West African region last year, after receiving start-up funding to the tune of USD$14.9 million, per reported funding announcements compiled by TechCabal Insights.
TechCabal stated that West Africa has always been a major destination when it comes to venture funding in Africa and as usual, 2021 was a positive year, both in terms of funding and number of deals closed.
In total, startups based in the region raised more than USD$1.5 billion across 116 funding rounds last year. However, Ghana’s share of the total funding represented only 1% of total investment funding to the region.
Unsurprisingly, Nigerian startups received a majority of the funding raised in the West African region last year with more than 85% or USD1.3 billion, followed by Senegal, which had a breakout year thanks to Wave’s record $200 million Series A funding in September, 2021.
Apart from the mobile money operator’s unicorn-propelling raise, startup funding pretty much remained muted in the francophone African country as just one other Senegalese startup, Yobante Express, raised over $1 million throughout the year. Total start-up investment funding to Senegal last year was $201.2 million.
Other funding destinations
Another major investment destination was Côte d’Ivoire with a total funding of $4.5 million, accounting for 0.3% of total investment to the region. Though Cameroon is a central African country, the report placed it under the Western zone with a total funding of $6.5 million, or 0.4% of the total funding to the region.
“In 2021, West Africa also saw an increased number of later-stage, larger-size deals, perhaps an indication of a maturing ecosystem. Startups that raised the most in single-round funding deals include OPay ($400 million), Wave ($200 million), Andela ($200 million), Flutterwave ($170 million), and TradeDepot ($110 million)”.
TechCabal
With their significantly large funding rounds, the first 4 startups joined Africa’s unicorn club last year. The region also witnessed a plethora of pre-seed and seed stage funding rounds which are signs of a growing generation of startups.
TechCabal’s Year-End report stated that Fintech deals in West Africa continue to attract most investor attention, accounting for 66% of all funding rounds across the region in 2021. Talent outsourcing (13%), due to Andela’s $200 million raise, e-commerce (8%), clean-tech (3%), and health-tech (2%) were the other top funded sectors, the report highlighted.
African startups secured an all-time high in investment funding
In 2021, African startups reached an all-time high in investments secured, after raising an estimated $4.7 billion in venture funding. Equally interesting, the ecosystem witnessed a fresh spring of tech innovations across the continent, from Web3-enabled products to edutech, healtech, agritech and even informal retail digitization.
The amount raised last year was twice the funding secured in 2020. There was also a 25% increase in the number of deals last year compared to the number of deals that were announced in 2020.
As expected, the Big Four African tech hubs (Nigeria, South Africa, Kenya, and Egypt) took the lead across all metrics. Quite a number of startups launched in these markets over the course of year.
In Nigeria, Kippa launched with a $3.4 million pre-seed while Craydel rolled out its edutech service in Kenya with a $1 million pre-seed. NFTfi raised $5 million to help South Africans use their NFTs as collateral for loans, and in Egypt, Bypa-ss secured $1 million to digitize exchange of medical information.
Beninese-founded MFS Africa closed $100 million and Wave, a Senegalese mobile money company, pulled a stunner when it raised $200 million, putting francophone Africa on the unicorn map. West Africa accounted for the lion’s share of mega rounds pulled by African startups last year.
The fintech sector, unsurprisingly, accounted for around 62% of the total funds secured by African startups followed by, with a yawning gap, health and biotech (8%). Logistics (7%), education (5%), cleantech (5%), agriculture (4%), e-commerce (3%), mobility (3%), and data (2%) were some of the other sectors that pulled investments into the continent’s startup ecosystem.
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