According to data from Africa: The Big Deal, startups in Africa have raised more funding in 2022 than in any previous year.

Despite this impressive achievement, there is a sense of disappointment as the numbers fell short of initial predictions. At the start of the year, many industry experts forecasted that the ecosystem would hit $6 billion in 2022, with some even predicting as much as $10 billion.

However, Q1 of 2022 delivered $1.9 billion in funding, the strongest quarter on record. Despite a dip in funding during Q2 with $1.3 billion, H1 of 2022 still marked the most successful H1 on record, surpassing the previous H1 record set in 2021 by a factor of 2.4x.

Chart by Africa: The Big Deal

Unfortunately, the ecosystem began to experience a slowdown in the latter half of the year. By the end of Q3, the difference in funding raised between 2022 and 2021 had decreased to $900 million. This trend continued in Q4, with $750 million in funding. By the end of the year, the difference in funding raised between 2022 and 2021 had decreased to just over $220 million.

Despite the slowdown, the overall funding for 2022 still exceeded $4.8 billion, with a strong chance of eventually exceeding $5 billion once all deals are accounted for. Furthermore, the data shows that there were over 1,000 deals of $100k or more announced in 2022 and more than 1,000 unique investors participated in at least one deal on the continent.

While the numbers may have fallen short of initial predictions, it is important to note that the African startup ecosystem is still thriving and continues to attract significant investment. However, with talks of slowdown and uncertainty in the latter half of the year, it remains to be seen how the ecosystem will perform in 2023.