According to reports, Venture Capital flows into crypto ventures in the first half of this year has surpassed the total for all of last year. In the first quarter of this year, US$91 million was raised. The second quarter of this year has seen four fundraising rounds deliver another US$213 million.
In May, KuCoin from Seychelles raised a record US$150 million in a pre-Series B funding round, pushing its valuation to US$10 billion giving it unicorn status. Mara, a non pan-African crypto exchange platform raised US$23 million, Jambo from Congo raised US$30 million and Afriex from Nigeria raised US$10 million.
So far, about US$304 million has been raised which is more than double the US$127 million raised in the whole of 2021.
According to data from Chainalysis, the value of crypto payment in Africa has surged by 1200% to US$105.6 billion in June last year from July 2020.
Last year, the “Big Four” startup ecosystems in Africa: Nigeria, South Africa, Kenya and Egypt took most of the dollar inflow in the crypto space, together with Seychelles. Nigeria topped the list with US$49.6 million followed by Seychelles with US$33.8 million, Kenya with US$20 million and South Africa with US$18.8 million.
Other countries that fared well were Cameroon at US$4.1 million and Burkina Faso at US$ 300,000.
The factors attributing to this increase in the interest in funding in Africa include the increased interest in regulated digital currencies from central banks as well as the need to financially include Africa’s unbanked population.
“The lack of common legacy financial systems and an enormous population, primarily unbanked, all contribute to the popularity and growth of cryptocurrencies on the continent,” said the authors of the report.
The report further shows that Africans are openly embracing blockchain. “Countries like South Africa, Kenya, Nigeria and Ghana have seen a rapid uptake of crypto assets to access more efficient payment trails provided by blockchain networks and yield returns on income with assets like Bitcoin or stablecoins pegged to the value of the US Dollar,” said Ian Putter who is the Regional Director of the Standard Bank Blockchain Research Institute Africa.
There is likely to be an increase in the number of unicorns in Africa in the coming years, as the prospect of even bigger deals is almost tangible. “We expect to see these begin to emerge within the next two or three years.” the report said.
However, despite the increase in funding, Africa accounted for only 0.5% of the total global blockchain funding.
According to the African Blockchain Report of 2021, “Although Africa’s blockchain and cryptocurrency funding numbers are still small compared to other regions, they are certainly growing.”