The African Blockchain Report 2021 by Crypto Valley Venture Capital (CV VC) and Standard Bank has revealed that crypto startups in Africa saw more venture funding in the first quarter of 2022 than in 2021.
Blockchain startups on the continent raised $91 million in 2022 Q1 compared to the same period in 2021, representing a 1,668% year-on-year (YoY) increase in cash inflow.
Crypto unicorns might emerge in 2-3 years from Africa
The report stated that the continent might see unicorns appear within two to three years from its crypto scene.
The surge of African crypto unicorns is possible with the increased interest in the region from venture capital firms primarily funding finance-related crypto companies. Per the report, most venture capital funding has gone to fintech companies and crypto exchanges.
Gideon Greaves, CV VC’s managing director for Africa, said that blockchain was the highest-funded sector in the continent.
“We see this development as a key enabler for African enterprises, giving them rapid entry to markets by using blockchain as the catalyst to build new businesses.”
The executive also pointed out that the absence of legacy infrastructure in the continent gives blockchain startups an opportunity. They can fill the gaps with innovative technologies. He believes that the continent has everything it needs to create large-scale crypto companies.
Nigerian startups account for the highest funding in 2021, with 18 companies in the country raising 39.05% of the funds raised on the continent. Seychelles comes second with 26.06%, while Kenya and South Africa have 15.75% and 14.87%, respectively.
Crypto adoption in Africa
Crypto adoption in Africa has been rising in the past few years due to inflation and limited access to financial services.
A report by crypto exchange KuCoin discovered that 35% of Nigerians between 18 and 60 years had traded crypto in the last six months. The report also highlighted that 17.36 million people have invested around half of their assets in cryptocurrencies.
While this shows high adoption in the most populated African country, looking at other countries on the continent shows high crypto adoption. Kenya leads the rest of the world in peer-to-peer crypto trades, while the Central African Republic recently made Bitcoin a legal tender.
In another report, crypto adoption on the continent grew by 1,200% between July 2020 and June 2021, making it the fastest-growing region globally.