Fintech in Africa – and the Global Figures for VC in 2022

Anyone looking to launch an African startup in 2023 must be sorely tempted to do so in the fintech space (provided they have the relevant background and expertise). After all, fintech has been on the roll on the continent. Most of the continent’s unicorns (startups valued at over US$1bn) are fintech companies. It is also the technology sector that has attracted the most VC funding over the past couple of years. In the first half of 2022 alone, there were more than 123 deals, an increase of 84% on the same period in 2021 when it was already the dominant sector in terms of funding. The proliferation of fintechs in Africa does not, however, mean that there is not still opportunity in the sector. An article published in Forbes Africa earlier this year points out, “fintech has not scratched the surface of challenges in the continent still characterised by less developed financial infrastructure and an unbanked population.” The trick for any entrepreneurs is figuring out which problems they are best suited and skilled to provide solutions for.

Meanwhile, the full-year 2022 numbers are in: global venture funding fell by 35% year-over-year. While startups raised a record-high $638.4bn in 2021, they only managed $415.1bn in 2022. Despite the downturn, Gartner estimates that global IT spending will reach $4.6tn in 2023, a year-over-year increase of 5.1%.