Venture funding for African crypto startups grew 11x in 2022: Report

While Africa has not yet seen a “blockchain mega-deal,” the report noted that crypto unicorns might emerge from the region in 2-3 years.

As the African region continues to adopt crypto and blockchain, more venture funding flowed into the continent in 2022’s first quarter compared to the first quarter of 2021, according to a new report by blockchain-investment firm Crypto Valley Venture Capital (CV VC) and Standard Bank. 

The report, titled “The African Blockchain Report 2021,” shows that blockchain startups were able to raise $91 million within 2022’s first quarter. Compared to the first quarter of 2021, this year showed a 1,668% year-on-year (YoY) increase in cash inflow compared to 2021’s YoY of 149% which is an increase of more than 11 times according to CV VC.

In addition, the report also highlighted that while Africa has not yet seen a “blockchain mega-deal,” it predicts that within 2-3 years, unicorns may emerge from the region’s crypto and blockchain scene as more venture capitals show interest in the region.

CV VC Managing Director for Africa, Gideon Greaves, told Cointelegraph that blockchain funding in Africa surpassed the other forms of startup funding. Working in a venture capital that focuses on investing on blockchain projects, the executive noted that that the region has an opportunity to enter markets faster through blockchain. Greaves said that:

“We see this development as a key enabler for African enterprises, giving them rapid entry to markets by using blockchain as the catalyst to build new businesses.”

Additionally, Greaves said that the lack of legacy infrastructure within the region gives blockchain startups an advantage because of the opportunity to fill in the void with fast and innovative technologies.

According to the CV VC executive, Africa is equipped with the right tools, the motivation, and the population to create large companies to serve millions of people. Greaves expects the continent of Africa to become the leading region for “capitalizing on business using blockchain” within the next five years.

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Meanwhile, venture capital firms recently invested $23 million to launch a crypto exchange platform called MARA. The exchange will initially commence its operations within Kenya and Nigeria to provide a simple way to trade crypto.

Last month, a report also showed that the lack of financial services infrastructure in Nigeria boosted crypto ownership in the country. The study also highlighted that citizens of the country began to use crypto as their alternative for storing and transferring assets.