Kenyan startups raised nearly one billion dollars in the first half of 2022, surpassing what the country secured last year. Data shows that, of the big four in Africa — the quartet that includes Nigeria, Egypt and South Africa, and which receives most VC funding in the continent — Kenya has so far showed the greatest growth in funding gained this year.
This is after the East African country, through 76 deals, raised $820 million in the first half of this year, according to the Big Deal database, almost double the funding secured by the country’s startups last year. For Kenya, this represents a 422% growth in funding raised, when compared to a similar period last year — when the country’s startups raised $157 million.
The Big Deal’s 2021 report, placed the funding secured by Kenya for the whole of last year at $411 million while Partech’s data says the country raised $571 million. On both accounts, Kenya held the fourth position in Africa in terms of funding received.
However, the latest Big Deal data, which only takes into account deals that have been made public, shows that the country is currently second after Nigeria, which has so far signed 160 deals, attracting $864 million in VC funding — which is a 128% increase when compared to the first six months of last year. As the top VC investment destination in Africa last year, Nigeria raised nearly $1.8 billion, which is triple the funding Kenya secured.
Egypt and South Africa have emerged third and fourth in terms of funding so far this year, having secured $538 million (71 deals) and $392 million (53 deals), respectively. However, Egypt earned the second-highest gain after recording a 244% growth in the period under review. South Africa, which was the continent’s second VC investment destination last year, attained a marginal 2% growth in funding raised.
The quartet accounts for 87% of the funding raised by startups in Africa.
Mega Deals in Kenya
Kenya’s growth in VC funding was buoyed by an increase in the number of deals and mega-rounds — which are deals that are equal to or exceed $100 million. Two notable mega-rounds that happened by the close of June in Kenya are Sun King’s $260 million series D funding and Wasoko’s $125 million series B funding. Sun King is a solar provider with operations across Africa and Asia, while Wasoko is a B2B retail and e-commerce platform.
Kenya’s growth is noteworthy given that it is soaring at a time when venture capital funding continues to slow down across the globe.
On the other hand, Kenya’s increased deal flow is indicative of the growing VC funding in Africa. The Big Deal’s data shows that Africa had by the end of June raised $3 billion, doubling what it had raised in the same period last year — despite this being a drop in the ocean when compared to other regions across the globe.
“If we look at the year-on-year (YoY) evolution of quarterly funding (comparing Q2 2022 to Q2 2021), Africa is simply the only region that continued growing YoY,” said Max Cuvellier, of The Big Deal in a post about funding in Africa.
Fintechs continue to attract the most funding on the continent. Africa is regarded as the world’s second-fastest growing payments and banking market after Latin America, according to this McKinsey study.