African blockchain investment surpasses 2021 total of $127 million
During the first quarter of 2022, $91 million worth of capital entered the African blockchain ecosystem, followed by another $213 million during the second quarter, for a total of $304 million.
VC investment continues to flow into Africa
In May, Seychelles-based cryptocurrency trading platform KuCoin raised US$150 million as part of its pre-series B funding round, bringing the company’s total valuation to US$10 billion. Then, Mara, a pan-African crypto exchange, raised $23 million, while Congolese and Nigerian startups Jambo and Afriex raised $30 and $10 million, respectively.
The African Blockchain Report 2021, published as a joint project by Crypto Valley Venture Capital and Standard Bank, shows that between Q1 2021 and 2022 funding grew by 1,668% – from $5.1 million to $91 million.
Cryptocentric payments have also grown, increasing by 1,200 percent between July 2020 and June 2021. Despite these striking numbers, Africa accounts for a paltry 0.5% of the world’s total blockchain finance.
Inflow dominated by just four countries
Nigeria, Kenya and South Africa, three of the “big four” startup ecosystems in Africa, along with the island nation of Seychelles, accounted for $122 million of the total VC inflow. Nigerian crypto firms raised $49.6 million followed by Seychelles at $33.8 million. Kenya and S. African crypto companies were able to accumulate $20 million and $18.8 million respectively. The report added:
“The lack of common legacy financial systems and a huge, primarily unbanked population all contribute to the popularity and growth of cryptocurrencies on the continent.”
Finally, countries such as Cameroon, Burkina Faso, Egypt and Ghana were able to attract investments worth $4.1 million, $300k, $200k and $125k respectively.
P2P payments are on the rise
Peer-to-peer (P2P) payments among small businesses and crypto investors are on the rise, indicating that the African masses are embracing blockchain technology en masse. Ian Putter, Standard Bank’s Regional Director of the Blockchain Research Institute Africa pointed out:
“Countries such as South Africa, Kenya, Nigeria and Ghana have seen a rapid uptake of crypto-assets to access more efficient payment channels provided by blockchain networks and generate income returns with assets such as Bitcoin or stablecoins pegged to the value of the US dollar,”
Another report by Boston Consulting Group (BCG), Bitget and Foresight Ventures suggests that Africa’s crypto adoption will witness a lot of short-term growth, mainly due to the increase in crypto derivatives trading.
