Africa, bucking global trends, raised more VC dollars in 2022 than 2021. But its unicorn list stayed stagnant
2021 was a big year for the African tech scene, with venture capital investments totaling between $4 billion and $5 billion yielding five unicorns. I predicted more would arrive in 2022, but that proved to be overly optimistic.
African startups raised more than $5 billion (including undisclosed deals) in 2022, a slight increase from the previous year. Despite this growth, there were no unicorns — compared to five in 2021 — despite a global decline in venture capital funding.
Private valuations proving false until startups go public suggest African markets may not yet be mature enough to produce unicorns, despite raising more venture capital than their Global South counterparts (India, Southeast Asia and Latin America).
2022 was an unusual year. Global economic woes and a venture capital drought caused the number of billion-dollar companies to plummet worldwide – 216 unicorns, per Tracxn, were created in 2022 compared to 541 the prior year. India saw 22 new unicorns last year versus 46 in 2021; Latin America experienced a sharp drop from 18 new unicorns in 2021 to just 8 last year.
VC activity dropped significantly in India, Latin America, and Southeast Asia in 2022 compared to 2021. This led to a decrease of more than half the number of unicorns in India and double-digit declines for the other two regions. The drop indicates greater damage was done than merely VC funding levels would suggest.
What made 2022 in Africa so strange?