More than half the 633 funded African tech ventures in 2022 had at some point in their lifespan taken part in an accelerator or incubator programme.
This is according to the eighth edition of the annual African Tech Startups Funding Report released by startup news and research portal Disrupt Africa, which is available free to all as part of an open-sourcing initiative in partnership with Flat6Labs, MarketForce, 4Di Capital, Mercy Corps Ventures, Newtown Partners, and InsiderPR.
The report tells the story of an impressive 2022 in which more startups raised more funding than ever before, in spite of a global downturn in investments. In all, 633 startups raised a combined US$3,333,071,000 in 2022. This represented incredible growth. The number of funded startups increased by 12.2 per cent on 564 in 2021, while the total secured funding jumped 55.1 per cent on US$2,148,517,500 in 2021.
Acceleration appears increasingly key to fundraising success. A total of 330 (52.1 per cent) of the funded African tech startups from 2022 took part in some form of accelerator or incubation programme either prior to raising, or as part of their raise.
This marks a sizeable increase from 2021, when only 213 (37.8%) of the funded ventures had done so. Growing interest in African startups from international accelerators such as Y Combinator and Techstars accounts for a large part of this percentage increase.
The significant role played by accelerators, which are usually active at an earlier stage of a startup’s journey, helped establish pre-seed and seed as the primary funding stages on the continent. Of the rounds raised by the 633 African tech startups funded in 2022, in 310 of them the stage of funding was disclosed. Of those 310 rounds, the majority – more than 70 per cent – were at the seed and pre-seed stage.
Only 33 (5.1%) of the funded startups tracked for this publication reported any element of debt as part of any of their rounds, though this was up 4.6 per cent from 26 (4.6%) in 2021. Though later-stage startups, especially those in the energy sector, are increasingly able to take on debt funding, the perceived risk of African tech startup investments means companies remain much more likely to raise equity capital.