In one of the strongest half-year of private capital activity ever recorded, private capital investment in Africa in the first half of 2022 saw a total deal volume of 338 deals with a cumulative deal value of US$4.7 billion.
According to a report by the African Private Equity and Venture Capital Association (AVCA), there are three main factors that contributed to strong deal activity: the substantial amount of fresh capital raised by fund managers in 2021 as investors made deployments across various strategies and sectors, an increasing interest in Africa’s venture ecosystem by international investors and domestic venture capital firms.
The report predicts that the total value of VC deals will reach US$7.0 billion by the close of 2022 – a 35% YoY increase from the US$5.2 billion raised in 2021 if this pattern continues. Africa is the only market to register more than single-digit growth for the period, unlike global trends this year.
Africa’s financial services industry attracted the biggest funding with FinTech companies, in particular, comprising 89% of the total number of deals within Financials.
From a regional perspective, West Africa continues to dominate private capital deals by volume (34%). Senegal now holds third place, overtaking Côte d’Ivoire, to follow Nigeria and Ghana as having the largest shares of deal volume in the region.
East Africa experienced the strongest growth in its share of deal volume compared to the corresponding period last year. Kenya’s role in this was key, with early-stage venture deals in Financials and Consumer Discretionary – mainly online retailing – contributing significantly to this remarkable growth.
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