Africa: Blockchain startups see 429% increase in funding in 2022

A new report has revealed that Africa recorded a 429% increase in blockchain funding last year, the highest year-on-year growth globally, with KuCoin and Scroll.io reaching coveted unicorn status.

African blockchain startups raised $474 million in 2022, a quick jump from the $90 million raised the previous year. Asia and Europe recorded increases of 50% and 35% to $4.74 billion and $4.88 billion, respectively, while North America remained unchanged at $15.2 billion.

The data was compiled by Africa’s largest lender, Standard Bank (NASDAQ: SBGOF ), and CV VC, an early-stage venture capital investor focused on blockchain startups. It delved into last year’s investment trends and how Africa has measured up against other regions within blockchain and beyond.

African blockchain ventures recorded 29 financing deals in 2022, an increase of 12% from 2021. Nigeria led in the number of deals, followed by South Africa, Seychelles and Kenya. Venture deals dominated funding at 91%, with custody and exchanges accounting for 52%. Fintech and infrastructure followed at 24% and 15%.

In 2022, Africa also recorded its first blockchain unicorns. KuCoin, the Seychelles-headquartered global exchange, raised $150 million last May at a valuation of $10 billion. Scroll, also based in the Seychelles, reached unicorn status this year after raising $50 million at a $1.8 billion valuation. The company is developing a Layer 2 scaling solution that increases the speed of transactions and reduces gas fees on the Ethereum network.

Seychelles, along with Mauritius, has become a favorite destination for global blockchain firms in Africa and was the largest player in blockchain finance last year. Together with South Africa, they accounted for 81% of global blockchain funding.

Globally, blockchain companies raised $27 billion across 1,822 deals in 2022, a new all-time high. This is despite a market downturn caused by the collapse of some of the industry’s biggest projects, from Terra and Celsius Network to Core Scientific (NASDAQ: CORZQ ) and FTX. A total of 22 new blockchain unicorns were born last year, bringing the total to 79.

While blockchain funding in Africa reached record highs in 2022, the year also saw several leading startups collapse or be forced into a quick sale due to a lack of funding. The latest casualty was Lazerpay, a Nigerian stablecoin payment company that announced a week ago that it was shutting down.

Fluidcoins, another Nigerian digital asset payments startup, was forced into a quick sale to UAE-based Blockfinex after failing to raise funding.

See: Domineum’s Mohammed Jega: We’re taking Bitcoin SV to Africa

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