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Venture Capital funding to Nigeria & Africa expected to hit record levels in 2021
Writer and Advisor on African Tech, Jake Bright says Venture Capital funding for Nigeria and Africa are likely to hit record levels this year. African tech companies Flutterwave and Chipper Cash both reached unicorn status this year following their respective fundraises. Jake Bright joins CNBC Africa for more.
Thu, 03 Jun 2021 14:14:35 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Record levels of VC funding expected in Nigeria and Africa this year
- Increasing interest from US investors and corporate venture arms driving investment in African tech startups
- Rapid growth in the payments sector fueled by digital transformation and regulatory advancements
Venture capital funding in Nigeria and Africa is expected to reach record levels in 2021, as predicted by African Tech writer and advisor, Jake Bright. The year has seen African tech companies like Flutterwave and Chipper Cash achieve unicorn status following successful fundraises. Bright shared his insights on the future of VC funding in an interview with CNBC Africa. Looking ahead to the second half of the year, Bright anticipates a surge in VC investments, particularly in Nigeria. He pointed out that 2020 witnessed a slight decline in VC funding for Africa after several years of consistent growth. However, the trend has been positive since 2014, with annual increases ranging from 20% to over 50%. Bright cited major events such as the acquisition of Paystack by Stripe and the recent unicorn status achieved by Flutterwave and Chipper Cash as indicators of potential pent-up funding rounds in the market. He expects significant inflow of capital in the coming months, driven by both investors and corporate venture arms from the United States. Bright highlighted the increasing interest of American companies, including tech giants, banks, and consulting firms, in the African tech market. Notable investments from players like Jeff Bezos, Accenture, Goldman Sachs, and Visa signal a growing confidence in Africa's tech ecosystem. The focal point of this investment trend is Nigeria, which is emerging as a key hub for fintech ventures. The influx of funding from various sources reflects a new era of global interest in African startups, particularly in the fintech sector. Over the past decade, VC funding for African tech has witnessed a remarkable increase. In 2014-2015, the total funding was around a quarter of a billion dollars, but in recent years, it has surged to approximately one to two billion dollars annually. This exponential growth is transforming the African tech landscape, with startups like Opay attracting substantial funding from multiple regions. Opay's success exemplifies the competitive dynamics within Nigeria's tech space, where companies are vying for market share and innovation. The payments sector, especially in the context of the African Continental Free Trade Agreement, is undergoing significant evolution. Africa presents a vast opportunity for payment solutions due to its large unbanked and underbanked population. The rise of fintech companies in Africa aligns with increased smartphone adoption, expanded internet connectivity, and the surge in VC funding. A notable development is Nigeria's progress in regulating mobile and digital payments, positioning the country to lead the digital payment adoption in Africa. The collaboration between East Africa, Southern Africa, and West Africa in digital payment adoption is shaping a new era of financial inclusion and innovation across the continent. As the VC funding landscape continues to evolve, all eyes are on Africa as a promising investment destination for tech ventures.
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