Why Africa had no unicorns last year despite record fundraising haul • TechCrunch

Africa, bucking international tendencies, raised extra VC {dollars} in 2022 than 2021. However its unicorn record stayed stagnant

The African tech scene was met with fanfare in 2021: Enterprise capital investments within the area totaled between $4 billion and $5 billion and produced 5 unicorns. In my piece detailing this progress, I predicted there can be extra unicorns in 2022. These predictions proved to be approach off the mark by 12 months’s finish.

Information from market insights trackers Briter Bridges and The Large Deal reveal that funding raised by African startups exceeded $5 billion (together with undisclosed offers) in 2022 — a slight share improve from the figures reported in 2021 regardless of a worldwide pullback in VC funding. And but, no unicorns popped up all year long, in comparison with 5 in 2021.

That reality might seem insignificant as a result of, on the finish of the day, non-public valuations don’t move an precise take a look at until startups go public. Nonetheless, producing no unicorns regardless of elevating extra enterprise capital suggests it’s maybe too early to imagine African markets are mature sufficient to constantly come out non-public billion-dollar firms like their World South counterparts: India, Southeast Asia and Latin America.

That mentioned, 2022 was peculiar. The worldwide financial downturn and enterprise capital crunch ensured that each area produced fewer billion-dollar firms than the earlier 12 months. Globally, 216 unicorns had been minted in 2022, per Tracxn, in comparison with 541 within the earlier 12 months. In India, 22 firms grew to become unicorns final 12 months, in comparison with 46 in 2021. Whereas 18 firms in Latin America acquired their horns in 2021, that determine fell to simply eight final 12 months.

In contrast to Africa, these areas raised approach much less enterprise capital in 2022 than in 2021, so it is smart that their unicorn numbers dropped. For instance, in India, the variety of unicorns dropped by greater than half as VC exercise dropped by 33%. Latin America and Southeast Asia additionally witnessed a double-digit decline in VC funding final 12 months in comparison with 2021, although the drop in unicorns signifies extra injury.

So what occurred in Africa in 2022 that made it so … bizarre?