A report on sector development in Africa shows a multifold increase in funding for blockchain startups in 2022.
Investment firm Crypto Valley Venture Capital (CV VC) and South African financial group Standard Bank have released a new report showing African blockchain startup funding in Q1 2022 exceeded the total increase in African venture capital funding by 11 times compared to the same period last year.
African Blockchain Report says that blockchain companies in Africa raised $218 million in funding between the beginning of 2021 and the end of Q1 2022. Most of the venture capital came from Nigeria (39%), Kenya (16%), South Africa (15%) and the Seychelles (27%), which received $122 million in total.
Distributed ledger technology (DLT) startups raised $91 million in Q1 2022 alone. Thus, DLT-based startups saw a 1,668% rise in fund inflows compared to the same period in 2021.
Due to the rapid growth of venture capitalists’ interest in the African region, CV VC analysts predict the appearance of the first crypto companies in Africa within 2-3 years, whose market valuation will exceed $1 billion (the so-called “unicorns”). According to Gideon Greaves, Managing Director at CV VC Africa, this is possible thanks to the popularization of “using blockchain as the catalyst to build new businesses.” In his view, the African continent stands a good chance of becoming the leading region for “capitalizing on business using blockchain” over the next five years.
Recall that the South African Reserve Bank recently discussed favorable conditions for integrating distributed ledger technology into the country’s financial markets.
Ian Putter, Founder and Regional Director of the Blockchain Research Institute Africa, argues that the globalization of African markets has led to the need for more efficient and inexpensive cross-border payments to facilitate trade outside the region. Consequently, there is an increased demand for crypto-assets in many African countries, allowing blockchain startups to raise more venture capital for funding.
Earlier, CoinsPaid Media wrote about how cryptocurrencies can help boost Africa’s economy.
