From Funding to Tech Talent to Emerging Tech; Africa’s Tech Space Will Unleash more Tech Waves in 2022

From Funding to Tech Talent to Emerging Tech; Africa’s Tech Space Will Unleash more Tech Waves in 2022

The advancement of technology in Africa has piqued the interest of the rest of the world. Despite been labeled an “emerging market” for a long time, it has grown dramatically over the last decades. Africa’s tech ecosystem had snowballed into one of the world’s fastest-growing tech ecosystems, with a 45% compound annual growth rate and a 92% year-over-year increase in the number of deals. The adage “tech is the new oil” is attracting a slew of new talent, investors, and ideas to the space. The interruption of the Covid-19 in 2020 created a disruption of the old ways. The termed pandemic encouraged the African market to resort to digital solutions.

Africa’s tech space is progressing quickly; startups are challenged to offer more. The region’s space has been through series of changes and disruptions. These have led to spike in demand for tech effective approach in rendering services.

Africa’s Tech Space

In 1998, there were less than four million mobile phones in Africa. In 2002, roughly one in ten people owned a mobile phone in Tanzania, Uganda, Kenya and Ghana. Today, mobile phones became the first point of access for Africans to use the internet. Moreover, access to the internet is no longer seen as a luxury on the continent.

Internet savvy Africans gave rise to the adoption of tech processes. So much that in 2016, Jumia became Africa’s first unicorn. Fintech investment began to grow exponentially as well as other tech sectors. By 2021, tech start-ups across the continent received $4.77B in funding. This record funding was also sweetened by the emergence of at least 5 new tech-unicorns.

2022 has been great for Africa’s tech ecosystem thus far. More funds are being raised and more tech processes are being adopted. We discuss some trends to be seen in Africa’s tech space this year.

More Funding Raises, Mega-deals in Africa’s Tech Space

The year 2021 was a tremendous one for start-ups in Africa. Total venture capital funding on the continent exceeded two and a half times what it was in 2020. This amount came to a whopping $4.77B. This equates to $1 million raised every two hours on average. In terms of funding, 30 African countries raised at least $100k throughout the course of the year.

In first 4 months of 2022, the ecosystem is showing no sign of slowing down. As at now, Africa’s tech space has secure over $1.8B in funding. Nigeria, South Africa, Egypt, and Kenya, collectively known as the “Big Four, have received a greater share of the investments. Expectedly, Egypt has had the most startups securing funding.

While international investors provided majority of the cash, domestic investors are increasingly funding African innovation. This increase in local venture capital participation is helping African startups grow and expand.

Unearthing Africa’s Untapped Tech Talents in Africa’s Tech Space

In 2019, Parag Agrawal (currently the CEO of Twitter) paid a visit to Nigeria. He was astounded by the availability of tech talents in the country.

Africa's tech space
Tech hubs in Africa

A joint report by Google and the International Finance Corporation (IFC) in 2020 disclosed that there are only 700,000 professional developers in Africa. Half of this number is concentrated in the Big 4 countries – Nigeria, Kenya, Egypt and South Africa. It’s no surprise as these countries also account for a huge chunk of the startup funding that comes into Africa.

Going-forward, Africa’s tech space will bridge the tech talent gap in the country. This will ensure that there’s enough human resources needed to utilize impressive rounds of funds that are raised.

Adopting the Emerging Techs

Africans and people in emerging economies have always had to play catch-up, but this is no longer the case with technological advancements. The rapid adoption of technological procedures has presented Africans as tech-savvy individuals. Africans have been shown to play significant roles in the creation of developing technology.

Africans’ involvement in cryptocurrency is important and has become a building block of web3 startups. Africa is one of the world’s fastest-growing cryptocurrency marketplaces. Kenya, Nigeria, Togo, South Africa, Ghana, and Tanzania are among the top 20 nations in the Global Crypto Adoption Index for 2021.

Web3 proponents believe that open, distributed, and permissionless ledgers will reshape the global economy. Africans will come to have greater believe in this emerging techs in months to come. These techs will be viewed as the preserve of accessing services. Africa will become the pull needed for the acceleration of emerging tech trends.