WASHINGTON (Reuters) – Venture capital investments in Africa dipped slightly to $6.5 billion (E117 billion) last year but avoided the sharp drop seen in most other global regions, data released by an industry group showed on Thursday.
The investments spread over 853 deals, represent a 1% decline from 2021 – a record year in Africa – according to the African Private Equity and Venture Capital Association (AVCA), which promotes private investment on the continent.
That compares to a 32% contraction in global venture capital.
“When evaluated against any year other than the stratospheric 2021, industry activity in Africa’s venture capital ecosystem was very strong,” AVCA wrote in a report accompanying the data.
Venture capital investments hit a record in the first half of 2022 and would go on to make up two-thirds of deals by value for the year, offsetting an anaemic second half.
While African startups still attracted just a small fraction of the $445 billion invested globally, the continent has seen steady growth, propelled largely by investments in financial sector companies.
The sector accounted for 31% of deal volume and 42% of deal value in 2022, the data showed.
Overall, the median deal size across all investment stages was $2 million, though 15 large deals in companies attracted a combined $2.2 billion.
Sun King, a provider of off-grid solar energy products in Africa and Asia, raised $260 million in a series D funding round. Africa-focused fintech firm Flutterwave raised $250 million. And d.light, a Kenya-based off-grid solar company, brought in $238 million in venture debt.
West Africa remained the most active region for venture capital investments, propelled by Nigerian startups.