$474 million boosts blockchain funding in Africa by 429% – Businessamlive

By Alexander Chiejina

Africa saw an increase in funding for blockchain-related projects in 2022, although the share of global capital remains small, according to research by CV VC and Standard Bank.

The African Blockchain Report 2022, released by blockchain venture capital firm CV VC in partnership with Standard Bank, revealed that African blockchain firms raised $474 million in 2022, a 429 percent increase from the previous year.

Deals in infrastructure, individual identity, record keeping and access to financial independence contributed to a 12 percent increase in deals across the continent. With blockchain accounting for 15 percent of all venture funds in Africa, the continent saw a 34 percent increase in venture capital to $3.14 billion.

Combining the sharp increase in blockchain funding with the fact that Africa saw the smallest increase in blockchain deals globally, while showing increases in all deal sizes, suggests that investors are becoming more confident and African blockchain startups are raising more funds. This is despite the fact that Africa has by a large margin received more worldwide investment than any other region, according to the report’s authors.

According to the research, Africa’s first blockchain unicorns – privately held start-ups with a current valuation of $1 billion or more – have emerged in recent months. Kucoin, a cryptocurrency exchange based in Seychelles, achieved its value in the third quarter of 2022. As a scalability solution for the Ethereum blockchain, Scroll.io describes itself as having recorded its valuation in the first quarter of this year.

Yet, despite the industry’s rapid expansion, Africa’s contribution to global blockchain finance remains small, rising from 0.3 percent in 2021 to 1.8 percent in 2022.

Geographically, deal value was also concentrated, with South Africa (37.3%) and Seychelles (43.9%) accounting for 81 percent of funding for African blockchain projects. Nigeria had the most transactions (13), but the total value was only $24.7 million, compared to Seychelles ($208 million), which had six transactions, and South Africa ($176.6 million), which had six transactions . With two deals, Liberia came in second in terms of value, largely due to a $37.5 million fundraising round from software development company Jambo, while Kenyan companies raised $25.8 million through four deals.

Gideon Greaves, CEO of CV VC Africa, calls for increased business education on the benefits of blockchain technology in his introduction to the research.

“Despite the rapid development and progress, there is still a significant knowledge gap that needs to be filled. I have had the chance to interact with legacy businesses across the continent and it is very clear that the majority of C-level employees have no have no idea what blockchain is or why they should care. The opportunity for further development and progress is hampered by this lack of information and understanding. It is important that we close this knowledge gap and inform influential people about the potential of blockchain technology,” said Greaves.