Report: Fintech Firms Received 62% of the $4.9 Billion Raised by African Tech Companies in 2021 – Fintech Bitcoin News

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The dominance by fintechs in 2021 eventually culminated into a period with “the highest number of single, non-M&A deals above $100 million.” fintechs capitalraise

Fintech groups also dominate in terms of funding that exceeds $50 million, with a 40% share of the total number of tech firms.Out of the $4.9 billion in funding that was raised by African technology companies in 2021, almost two-thirds of this went to fintech companies, data from a new report has shown. In terms of deals wherein the capital raised exceeded $40 million, fintechs accounted for 40% of such deals.

Meanwhile, the report suggested that the Covid-19 pandemic could well be the main explanation for the surge not only in the funding of fintechs, but non-fintech firms as well. “Logistics and energy follow by volume of funding but the most recent wave of digitization — perhaps boosted by Covid-19 — is propelling sectors such as e-commerce, agriculture and healthcare,” concluded the study report.However, the same report does concede that most of the funds raised in 2021 were concentrated in a few projects. The report explains:

Although highly concentrated in a few cases, [which] only represents less than 3% of total disclosed deals but captures over 55% of total disclosed funding, this investment size carries significant weight and acts as a pull factor for several investors. Besides equity financing, the Africa Investment Report data shows that debt financing is increasingly becoming a viable funding route. To support this assertion, the report points to the fact that 6% of total disclosed funding in 2021 was debt financing.In terms of the origins of the late-stage investors, the data shows that the United States is by far the biggest source of capital for Africa tech companies with a 62.5% share.

 

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