Africa, bucking international tendencies, raised extra VC {dollars} in 2022 than 2021. However its unicorn record stayed stagnant
The African tech scene was met with fanfare in 2021: Enterprise capital investments within the area totaled between $4 billion and $5 billion and produced 5 unicorns. In my piece detailing this progress, I predicted there could be extra unicorns in 2022. These predictions proved to be method off the mark by 12 months’s finish.
Knowledge from market insights trackers Briter Bridges and The Massive Deal reveal that funding raised by African startups exceeded $5 billion (together with undisclosed offers) in 2022 — a slight proportion improve from the figures reported in 2021 regardless of a worldwide pullback in VC funding. And but, no unicorns popped up all year long, in comparison with 5 in 2021.
That truth could seem insignificant as a result of, on the finish of the day, non-public valuations don’t cross an precise take a look at until startups go public. Nonetheless, producing no unicorns regardless of elevating extra enterprise capital suggests it’s maybe too early to imagine African markets are mature sufficient to persistently come out non-public billion-dollar corporations like their World South counterparts: India, Southeast Asia and Latin America.
That stated, 2022 was peculiar. The worldwide financial downturn and enterprise capital crunch ensured that each area produced fewer billion-dollar corporations than the earlier 12 months. Globally, 216 unicorns have been minted in 2022, per Tracxn, in comparison with 541 within the earlier 12 months. In India, 22 corporations grew to become unicorns final 12 months, in comparison with 46 in 2021. Whereas 18 corporations in Latin America acquired their horns in 2021, that determine fell to simply eight final 12 months.
Not like Africa, these areas raised method much less enterprise capital in 2022 than in 2021, so it is smart that their unicorn numbers dropped. For instance, in India, the variety of unicorns dropped by greater than half as VC exercise dropped by 33%. Latin America and Southeast Asia additionally witnessed a double-digit decline in VC funding final 12 months in comparison with 2021, although the drop in unicorns signifies extra harm.
So what occurred in Africa in 2022 that made it so … bizarre?