Africa: Blockchain startups sees 429% surge in funding in 2022

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A new report has revealed that Africa recorded a 429% surge in blockchain funding last year, the highest year-on-year growth globally, with KuCoin and Scroll.io hitting the coveted unicorn status.

African blockchain startups raised $474 million in 2022, a rapid jump from the $90 million raised the year prior. Asia and Europe recorded a 50% and 35% increase to hit $4.74 billion and $4.88 billion, respectively, while North America remained unchanged at $15.2 billion.

The data was compiled by Africa’s biggest lender, Standard Bank (NASDAQ: SBGOF), and CV VC, an early-stage venture capital investor focused on blockchain startups. It delved into last year’s investment trends and how Africa has measured up against other regions in blockchain and beyond.

African blockchain ventures recorded 29 funding deals across 2022, a 12% year-on-year rise from 2021. Nigeria led in the number of deals, followed by South Africa, Seychelles, and Kenya. Venture deals dominated the funding at 91%, with custody and exchanges accounting for 52%. Fintech and infrastructure trailed at 24% and 15%.

2022 also saw Africa record its first blockchain unicorns. KuCoin, the global exchange headquartered in Seychelles, raised $150 million last May at a $10 billion valuation. Scroll, also based in Seychelles, hit the unicorn level this year after raising $50 million at a $1.8 billion valuation. The company develops a Layer 2 scaling solution that speeds up transactions and reduces gas fees on the Ethereum network.

Seychelles, alongside Mauritius, has become a favored destination for global blockchain firms in Africa and was the biggest player in blockchain funding last year. Together with South Africa, they accounted for 81% of global blockchain funding.

Globally, blockchain companies raised $27 billion across 1,822 deals in 2022, a new all-time high. This was despite a market downturn caused by the collapse of some of the industry’s biggest projects, from Terra and Celsius Network to Core Scientific (NASDAQ: CORZQ) and FTX. A total of 22 new blockchain unicorns were born last year, taking the total number to 79.

While blockchain funding in Africa hit record highs in 2022, the year also saw several leading startups collapse or be forced into a quick sale due to a lack of funding. The most recent casualty was Lazerpay, a Nigerian stablecoin payments company that announced a week ago that it was shutting down.

Fluidcoins, another Nigerian digital asset payments startup, was forced into a quick sale to UAE-based Blockfinex after failing to raise funding.

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