VC flows into blockchain across the African continent

No less than 18 Nigerian companies raised funding for blockchain ventures in 2021, pulling in a total investment of  $49.6-million. 

According to the inaugural African Blockchain Report, published by Crypto Valley Venture Capital (CV VC) in collaboration with Standard Bank, South Africa ranked a distant fourth in fundraising for new blockchain ventures in Africa, with $18.89-million raised to fund five blockchain and cryptocurrency companies. The country was behind Seychelles ($33.8-million for 4 companies) and Kenya ($20-million for one enterprise).

CV VC, an initiator of Crypto Valley, a mature blockchain hub hosting 14 blockchain Unicorns, published the report as part of the Blockchain Hub Conference taking place in Davos, Switzerland. The report provides a compelling structural overview of the emerging blockchain sector and insights regarding funding in Africa.

Standard Bank’s head of blockchain and centre of excellence, Ian Putter says: “As the largest bank in Africa, Standard Bank has embarked on a journey to evolve beyond the bank to become a digitally-enabled platform business. South Africa has the most sophisticated financial sector on the African continent. Although some may believe the country is in a state of regulatory uncertainty, this is by no means the case and we are integrating cryptocurrencies into our economy and society by building regulatory frameworks, developing CBDCs, and actively participating in the blockchain community.

“Although initially cautious in their approach, South African regulators have been working hard to embrace new-age technologies and create a transparent regulatory environment that will further encourage its fast-paced blockchain and cryptocurrency adoption. For Standard Bank, the blockchain offers a powerful platform on which to deliver innovative services more efficiently to help our client’s greatest problem.”

The report shows in detail how Africa has self-accelerated blockchain as a transformative force for society and the economy and how pioneers continue to reinforce the need for more unified action on regulation and infrastructure.

It also shows how funding far outpaced all other sectors, eleven times. The findings demonstrate how nations and stakeholder capitalists are beginning to step in and embrace Africa’s self-determining participation in the fourth industrial revolution.

The CV VC report looks beyond crypto to the underlying blockchain movement, set to enable Africa to transact and interact for the well-being of its people and economies. It found:

• Companies raised $91 million in Q1 of 2022, a 1,668% YoY increase from Q1 of the previous year.
• When comparing Q1 2021 vs. Q1 2022, venture funding for African blockchain startups far outpaces the growth seen in general African venture funding – 1,668% vs. 149% –  showing 11 times the level of growth on a YoY basis. 
• Africa is the fastest adopting crypto continent globally, yet it has only a 0.5% share of total global blockchain venture funding, which stands at $25.2-billion.
• African blockchain funding of $127-million in all of 2021 is similar in size to a single blockchain ‘mega-deal’, of which there were 59 globally.
• The regulatory quagmire is clearing as 6 nations have regulated, and others are making headway.
• Blockchain in Africa is unique as it is driven from the bottom up, where essential industries are propelling forward with blockchain tech; agriculture, mining, remittances, inclusion, identity, and property.

Co-founder of Crypto Valley Venture Capital Mathias Ruch says:  “While actively participating in Africa, we are amazed and humbled by the determination of the brilliant founders who are changing the future not just for their industries and nation but for the world. In Africa, there is a mindset that complements Switzerland’s determination and a will to create well-being for its citizens and the future of humanity. 

“As the world enters the decade of the fourth industrial revolution, building on blockchain as a transformative tech, it is worth recanting the main theme of this year’s WEF, ‘Working Together and Restoring Trust’. This is what CV VC intends to do with other drivers in Africa,”