Africa’s startup funding gap—and investor opportunity—is right after the seed stage

2021 was a record for mega rounds in Africa but there remains a mushy middle of underinvested startups.

The major African tech breakthrough of 2021 was that it is becoming easier for startups to close $100 million funding rounds, as Wave, MFS Africa, TradeDepot, and about eight others did. The trend has continued this year with InstaDeep, PalmPay, Flutterwave, Moove, and Wasoko (formerly called Sokowatch.)

Amid talk of a global slowdown in venture capital activity, African startups have raised more in each of the first five months this year than in the same months in the past four years (thanks to mega rounds by Wasoko and others). The US, and Asia saw declines in the first quarter this year versus last.

But a new report suggests that despite the funding boom for fast-growing startups, investors with an eye for Africa should aim to close a gap between seed and later stages.

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