The importance of blockchain for Africa
There is little doubt about the transformational impact of blockchain in Africa, its influence on the welfare of nations, and how it affects the continent’s technology status, according to the second African Blockchain Report 2022 from CV VC and Standard Bank.
Africa is the only global region that has experienced increased venture funding and an explosion in blockchain-specific funding, cementing the fact that the technology is impacting African lives, well-being and the continent’s resilience.
Blockchain venture funding, as a percentage of all venture funding, is on the rise globally (6.5%). In Africa, blockchain funding achieved a record 15% share of all sector-agnostic venture funds raised by the continent, more than double the global average, highlighting the continent’s continued emergence as a key blockchain investment destination for startups.
Africa’s Blockchain Drivers – Brilliant Mindset, Necessity and Impact
The number of African blockchain deals grew by 12%, reflecting that Africa’s sharp minds are driving valuable developments, particularly in the areas of infrastructure, personal identification, record keeping and access to financial independence. The report illustrates that the brilliant thinking, energy and technological prowess of the founders, who are leading the African blockchain revolution, are exemplary for the rest of the world.
In addition to the deep capability, a significant reason for the buoyant growth of the African blockchain sector is sheer necessity. Many Africans cannot trust large, centralized, regulated infrastructure systems. As a result, innovation has a clean slate to paint on, and progressive advances seem to follow. These advances sometimes improve existing systems, but more often than not, they skip over older systems entirely.
Africa – notable increases by company and country
African blockchain companies with notable increases include Kucoin, MFS Africa, Scroll, VALR and Carry1st. Seychelles and South Africa accounted for 81% of African blockchain funding. Nigeria is the leading country in terms of the number of blockchain startups funded, followed by South Africa, Seychelles and Kenya. The custody and exchange category was the highest funded in Africa with a share of 52%, followed by Fintech (24%) and Infrastructure and Development (15%).
Gideon Greaves, MD of CV VC Africa, notes: “With the potential to create entirely new business models, the African blockchain industry is understandably experiencing rapid growth, with investors readily embracing it. Africa exhibits a magnetic collaborative environment between developers and organizations in the space. This supportive ecosystem drives the industry. Our report indicates that the transformative potential of this technology for business operations is undeniable. As investors continue to express confidence in the blockchain industry’s sustainability and prospects, we expect further growth and investment in Africa in the coming years.”
Africa – Blockchain Tools in Real Life
The report shows that blockchain technology continues to impact Africa to a degree unmatched anywhere else in the world. It demonstrates real utility such as in social impact, proptech, tokenization and NFTs, energy, government and education. The 70-page report presents an all-encompassing view of the region’s blockchain landscape, including in-depth funding data, regulatory facts, industry advancements, an investor watchlist and engaging perspectives from pioneers and leaders in the emerging industry sectors.
Africa – the most viable blockchain region globally – with 429% the highest global growth
CV VC’s African Blockchain Report 2022 presents an analysis of the African industry in the context of global metrics as well as continent-specific dynamics. Despite economic and socio-political challenges, the global blockchain industry broke records once again in 2022, with a total of 1,828 deals representing an increase of almost 30% from the previous year.
Among global regions, Africa emerged as the most energetic, with blockchain companies achieving the highest funding growth of the report’s globally assessed regions. In 2022, African blockchain startups raised an impressive $474 million, marking a staggering 429% year-on-year increase in funding. Combining the sharp increase in blockchain funding with the fact that Africa had the smallest global increase in the number of blockchain deals, but the only region globally to show increases in all deal sizes, indicates that African blockchain startups are raising bigger checks and investors are gaining confidence. This is against the background that Africa’s share of all global financing has increased more than any other region by a significant margin.
Africa – leading its own development and social impact
The report also shows that blockchain applications for socio-economic impact give Africa the opportunity to lead its own development and serve as a good example for other nations on how to harness the technology.
“The report shows that the rise in the use of blockchain technology shows no sign of slowing down,” said Ian Putter, Head, Blockchain CoE&CA Training Office at Standard Bank. “We at Standard Bank embrace the technology to bring about transformation in a regulated and inclusive way. Blockchain is fundamental to the next iteration of the Internet – Web3.
“We are convinced that Web3 will be the economy of the future and appreciate the role that blockchain technology plays in getting everyone there,” he says.
