What’s behind Africa’s fundraising growth?
We’ve all seen the numbers. $4.9 billion. $1 million raised every two hours. 250% growth. Africa’s venture ecosystem is accelerating faster than the global market — but is the boom just hype? What’s behind this ‘sudden’ increase in startup funding on the continent?
The inflection point
Like all overnight successes, momentum has been building for years. And, much like startups themselves, ecosystem growth tends to be exponential. Looking at global startup ecosystem trajectories, there is good reason to believe that 2021’s numbers are not an isolated performance.
India had eight unicorns in 2018, nine in 2019, and 11 in 2020. Last year, the country celebrated 42. Similarly, it took China five years to reach five unicorns between 2010 and 2015, but then saw 21 unicorns in 2016 — and 91 unicorns in 2019. Latin America has followed a similar trajectory, raising $14.8 billion in 2021 — more than it had raised between 2014–2020 combined — and minting nine of the region’s 17 unicorns.
The pattern is clear: raising unicorns is not a linear process. After a critical mass of scaled startups, there is an inflection point that marks the beginning of exponential startup ecosystem growth and success.
